faucet in every home. A glass of clean and safe drinking
water in every dining table. A population untouched
by water-borne diseases. Visions struggled for by
the Filipino people both government and the
governed for our countrys provincial
cities and communities.
while early water supply development efforts expended
by the government were genuine, these simply did not
take off as expected. Earlier approaches were centralized,
thus, responsiveness to local conditions or developments
in the early 70s, a change in provincial water supply
development strategy was put into place. Presidential
Decree No. 198, also known as The Provincial
Water Utilities Act of 1973, was signed into
law on May 25, 1973.
law created the Local Water Utilities Administration
or LWUA in the national level and provided for the
establishment of Water Districts in provincial cities
and municipalities. Thus would be put into motion
a development partnership called the LWUA-Water
District Concept that would revolutionize water
supply provision in the countryside. In 1987, LWUAs
mission and area of responsibility was expanded to
include provision of Level II service (communal faucet
system) through the Rural Waterworks and Sanitation
Associations (RWSAs) in areas where Level III systems
(individual household connection) were not feasible.
Local Water Utilities Administration, more commonly
referred to as LWUA, is a government-owned and controlled
corporation (GOCC) with a specialized lending function
mandated by law to promote and oversee the development
of water supply systems in provincial cities and municipalities
outside of Metropolitan Manila. It is run by an Administrator,
also the Chief Executive Officer, under the guidance
of a five-man Board of Trustees where the Administrator
is an ex-officio member.
is a Water District (WD)?
water district is a local corporate entity that operates
and maintains a water supply system in one or more
provincial cities or municipalities. It is established
on a local option basis and, like LWUA, is classified
as a government-owned and controlled corporation or
GOCC. A WD is run by a five-man Board of Directors
through a General Manager.
a lending source, what makes LWUA advantageous over
is the only lending institution whether in
the public or private sector with the financial,
technical and institutional development competence
to enable a water districts water supply project
to generate return-on-investments.
LWUA treats countryside water supply development not
simply as a financial venture, nor as a mere waterworks
construction project, but as a comprehensive development
endeavor that factors in the communitys economic
and cultural nuances, among other things, to assure
residents of a water supply service that is both reliable
and lasting. LWUAs comprehensive expertise has
been responsible for turning Philippine countryside
water supply development into the working model for
Asia that it is today. Water Districts benefit from
this comprehensive expertise through LWUAs various
what aspects of water supply development is LWUA the
is the only Philippine water supply institution with
full expertise in developing Level III (individual
household connection) water supply systems. Its competence
spans the financial, technical, institutional development
and regulatory aspects of water supply development.
It is also an expert in developing Level I (communal
well) and Level II (communal faucet) systems. This
expertise is often availed of by other government
institutions involved in the development of these
water supply systems.
is LWUAs financial expertise?
LWUA since 1973 has been financing water supply projects
through funds secured from national government subscriptions,
bilateral and multilateral fund sources, and from
internally-generated funds and second generation funds.
Recently, government and private financing institutions
have been tapped as new fund sources. Traditionally,
these sources are inaccessible to water districts.
LWUA then allocates and relends these funds to water
districts at competitive terms. Some funds, meanwhile,
are extended as grants. Under recent enhancements
to its charter, LWUA is also tasked to assist water
districts graduate into creditworthy status and access
non-traditional sources of funds.
LWUA know-how also includes the determination and
implementation of socially responsive and financially
viable water rates, and tariff review to determine
its adequacy to meet WD expansion needs.
types of loans are open to Water Districts?
offers four loan windows to water districts (check
out www.lwua.gov.ph for details).
Window 1 is open to Level III (individual household
connection) and Level II (communal faucet) projects
intended for the comprehensive development, repair
or rehabilitation of new or existing water supply
systems with interest rates ranging from 8.5-15
% p.a. and a 25-year repayment scheme that includes
a 4-year grace period. Available loan is from 40-100
% of project cost.
Window 2 is open to projects intended to generate
new service connections or for watershed management,
and to special loans intended for emergency purposes.
Available loan is from 50-100 % of project cost
and interest rates are based on prevailing applicable
Window 3 is open to projects intended to enhance
water supply facilities or commercial operations.
Maximum loan available is set to 100% of project
cost while the repayment period is either the equivalent
to the life of asset acquired or repayment period
contracted with the fund source.
Window 4, also called the Project Development and
Efficiency Improvement Fund (PDEIF), is intended
for project development and for efficiency improvement
activities such as non-revenue water reduction.
The former is available to all water districts and
is offered at 6.56 % annual interest, the latter
only to semi-creditworthy and pre-creditworthy
water districts at interest rates of 8.2-8.7 % p.a.
Loan Window is the latest lending facility of LWUA.
It is intended for water district expansion projects,
well drilling and development of water sources.
Maximum loan amount is P10 million and carries a
7.5% p.a. interest rate for a 10-year loan and 9%
p.a. for a 15 to 20-year loan.
What is LWUAs technical
teams of engineers and technicians have undergone
extensive studies and trainings both here and abroad,
and have gained an unequalled competence in water
supply and sanitation development through actual experiences
in the field. Their expertise includes all phases
of planning, design, construction supervision, and
operations and maintenance supervision, including
identification and development of water sources and
systems efficiency improvement.
is LWUAs institutional development assistance
the overall success and sustainability of a water
district in mind, LWUA extends institutional development
assistance in the form of advisory and managerial
services; transfers policy-making, managerial and
technical competence to the pertinent WD personnel
through training interventions; designs and provides
water districts with commercial practices systems
for a smoother commercial operation.
is a Water District formed?
duly-organized water district is formed through the
LWUA conducts preliminary talks and consultations
with interested local government entities.
The local government conducts public hearings to
arrive at a consensus on whether to form a water
district or not.
The local legislative body (the Sangguniang Bayan/Lungsod
or Sangguniang Panlalawigan, as the case may be)
secures nominations for candidates for the water
district board of directors from business, civic,
professional, education and women sectors of the
The Sanggunian secretary collates all nominations
and forwards the same to the appointing authority.
The Mayor or Governor appoints the directors.
The local legislative body deliberates and enacts
a resolution to form a water district stating therein
the name and terms of office of the duly appointed
board of directors.
The Mayor or Governor approves resolution, submits
the same to LWUA.
LWUA reviews the resolution to determine compliance
with Presidential Decree No. 198 (Provincial Water
Utilities Act of 1973) and LWUA requirements.
If the resolution complies with requirements, LWUA
issues a Conditional Certificate of Conformance
(CCC), a water district is born and becomes eligible
to avail of LWUAs comprehensive assistance
do consumers pay for water?
is considered an economic good, and thus, has a price.
Water users pay for the services extended by the WDs
in bringing water to their respective homes, keeping
that water safe, and providing that water whenever
it is needed. Sustained water service depends on the
consistent payment by the consumers of their water
are water rates determined and implemented?
water districts water rate is determined by
the following factors:
of systems expansion
and maintenance cost
service needs of the water district
rates are implemented only after they are presented
in a public hearing and after review and approval
To ensure that the average water user in the province
can afford the water service provided by the water
district, water rates are set through a socialized
pricing scheme. Big water users such as industries
and commercial establishments are charged higher rates
which, in effect, subsidizes the smaller but more
numerous water consumers. In addition, a lifeline
rate ceiling is also set, equivalent to 5% of the
annual income of the low income group.
do water supply programs benefit very poor families?
every effort is made to ensure that water service
reaches the most number of families, there are still
those who cant afford this basic need. LWUA,
in partnership with WDs nationwide, also implements
Level I water system projects or point source development
such as shallow wells, deepwells and spring systems
as well as Level II projects or communal faucets where
the standard Level III systems are not feasible.
benefits does a community derive from an efficient
community or group of communities served by an efficient
water system benefits from the following:
health and sanitation. Water users are provided
with a first line of defense against water-borne
diseases since only disinfected and potable water
is made available to every water consumers
standard of living. A water district frees water
consumers from the time- and effort-consuming chore
of fetching water from unsafe community wells. With
more time on their hands, water users are able to
pursue productive endeavors or engage in leisurely
protection. The community is provided with a reliable
helping hand during inopportune times. Since a WD
is community-based and service-oriented, it becomes
another of the communitys reliable partners
during social activities or, more importantly, during
responsible citizens. The professional and businesslike
operation of a water district encourages the formation
and development of positive consumer values among
its clients. The culture of paying for every drop
of water consumed is reinforced and develops a sense
of conservation for a natural resource. Discipline,
too, is upheld since consumers are made to understand
that they have to pay their dues on time. Majority
of active water districts nationwide boasts of a
high collection efficiency without the need for
development projects for the community. A water
district frees the local government from the problems
of operating and maintaining the communitys
water system, and from subsidizing the operations
of a utility. This enables the concerned local government
to direct its efforts and resources to other equally
urgent projects such as roads and school buildings.
economic opportunities. An efficient water system
in a community attracts more investors and stimulates
jobs and better economic opportunities become available
land values. The price of real estate properties
in a community increases once a Level III (individual
household connection) water system becomes accessible.