A Primer on LWUA and the Water Districts
A 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
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 suffered.
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
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.
here for more details)
a lending source, what makes LWUA advantageous over other sources?
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. (Check
out LWUA's lending program)
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 assistance
what aspects of water supply development is LWUA the acknowledged
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 (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 9.2 %-10.2 % p.a.
and a 10- to 40-year repayment scheme.
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 expertise?
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 program?
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 following process:
One: LWUA conducts preliminary talks and consultations with interested
local government entities.
Two: The local government conducts public hearings to arrive at a consensus
on whether to form a water district or not. (LWUA Board Resolution
No. 147, Series of 2009, amended the Guidelines for the Formation
of Water Districts in Communities Without Existing Water System,
and states that "LWUA shall no longer require a public
hearing on water district formation as a requisite for the filing
of the same.")
Three: 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 community concerned.
Four: The Sanggunian secretary collates all nominations and forwards
the same to the appointing authority.
Five: The Mayor or Governor appoints the directors.
Six: 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.
Seven: The Mayor or Governor approves resolution, submits the same to
Eight: LWUA reviews the resolution to determine compliance with Presidential
Decree No. 198 (Provincial Water Utilities Act of 1973) and LWUA
Nine: 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 bills.
are water rates determined and implemented?
water districts water rate is determined by the following
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 by LWUA.
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 water district?
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 activities.
protection. The community is provided with a reliable fire-fighting
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,
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 bill collectors.
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 commercial activities.
jobs and better economic opportunities become available to residents.
land values. The price of real estate properties in a community
increases once a Level III (individual household connection) water
system becomes accessible.