How is a Water District Formed

A 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 LWUA.

Eight: LWUA reviews the resolution to determine compliance with Presidential Decree No. 198 (Provincial Water Utilities Act of 1973) and LWUA requirements.

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 LWUA’s comprehensive assistance program.

How are Water Rates Determined and Implemented

A water district’s water rate is determined by the following factors:

  • cost of systems expansion
  • operation and maintenance cost
  • number of connectors
  • debt service needs of the water district
  • ten percent reserves
  • operating efficiency

Water 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.


LWUA is the only lending institution – whether in the public or private sector — with the financial, technical and institutional development competence to enable a water district’s 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 community’s economic and cultural nuances, among other things, to assure residents of a water supply service that is both reliable and lasting. LWUA’s 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 LWUA’s various assistance programs.