PRESIDENT Macapagal-Arroyo recently certified the necessity of the immediate enactment of Senate Bill No. 2595, embodying among others an increase in the authorized capitalization as well as the foreign and domestic borrowing capacities of the Local Water Utilities Administration (LWUA).

President Arroyo in her letter to Senate President Manuel Villar, Jr. and Executive Secretary Eduardo Ermita in his letter to House Speaker Jose De Venecia, Jr., said that the Congress should "address a public emergency arising from the urgent need to provide potable water supply to the rapidly increasing population in the country's fast urbanizing towns and cities, consistent with the country's Millennium Development Goal (MDG).

Malacañang's certification of SB No. 2595 as urgent Administration bill is pursuant to the provisions of Article VI, Section 26 (2) of the 1987 Constitution, the same letter stated.

SB No. 2596, under Committee Report No. 248, entitled "An Act Further Amending Presidential Decree No. 198, Otherwise Known As The Provincial Water Utilities Act, As Amended, Providing Funds Thereof And For Other Purposes," proposed an increase in LWUA's authorized capital stock to P50 billion and the agency's foreign and domestic borrowing capacity to US$ 1 billion and P1 billion, respectively.

LWUA Administrator Orlando C. Hondrade welcomed the major development and thanked the President for fully supporting the provincial water sector and the agency's mandate to provide safe and potable water in the countryside.

The certified urgent measure, which was submitted jointly by the Senate Committees on Public Works, Public Services, Ways and Means and Finance, seeks to increase LWUA's capitalization which was fully subscribed as early as 1991. The agency revealed that starting 1992, it only relied on limited congressional subsidy loan from GFIs and internally generated funds to sustain its lending activities. The congressional subsidy was strictly used as counterpart funds for foreign loans availed by LWUA for various water districts.

Under SB No. 2595, LWUA's capitalization shall be subscribed by the National Government and opened to subscription by private investors or government financial institutions (GFIs) while the agency shall have the authority to borrow money from all domestic loan sources whether government or private. These are aside from the proposed privatization of water districts within five years from the passage of the measure.

SB No. 2595 is set to be approved by the Senate and ratified by both houses when they resume session in June and before the adjournment of the 13th Congress. Thereafter, the President will sign the LWUA bill into law.

c February 22 , 2007