Institutional reforms in the water sector
(Water Series: Paper No. 1)
Alberto C. Agra and Mari Jennifer M. Bruce
Forensic Solutions
ABSTRACT
Despite the Philippines’ abundant water resources, the country is experiencing water supply shortage. This is because water resources are unevenly distributed geographically and seasonally. With the growing demands of an increasing population and the adverse effects of climate change, the disparity between water resource and water supply is expected to worsen in the coming years.
To abate further water supply shortage, measures must be taken short of an overhaul of the current water regulatory system. The National Water Resources Board, as the apex regulatory body, must be strengthened to perform its mandate of managing water resources. Coordination among agencies involved in water regulation must be emphasized, and the functions of each streamlined.
Introduction
The Philippines has abundant freshwater resources – rainfall, surface water and groundwater. Dependable surface water is at 125.8 billion cubic meters and groundwater potential is at 20.2 billion cubic meters. On the other hand, the mean annual rainfall of the Philippines varies from 965 to 4,064 millimetres. These numbers show that the Philippines has an abundant water supply. Yet, the country still experiences water shortages.
Water supply in the Philippines is affected by geographic and seasonal variations, and aggravated by deteriorating water quality resulting from over-abstraction, poor environmental management and pollution. Water resources are unevenly distributed throughout the country, often resulting in water shortages in highly populated areas, especially during the dry season. Metropolitan Manila, and its neighbouring provinces, primarily rely on surface water and are thus very vulnerable to changes in the weather. In the dry months, when surface water level is low, people rely on rainfall to supplement scarce water supplies. In certain areas in the metropolis, groundwater is not a reliable source anymore as over-extraction throughout the years has already resulted in salt water intrusion and subsidence. About 67% of river systems are not suitable public water supply sources, and up to 58% of groundwater is contaminated.
Water scarcity is only expected to worsen at the current state of water use, and moreso with anticipated increase in urban population. There will be greater water demand increased domestic, industrial and commercial use, with nine major urban areas expected to experience serious water constraints by 2025.
To abate the worsening water supply shortage not only in the urban areas but nationwide, the Philippines needs to strengthen the water resources management and development, and water supply and sanitation infrastructure to achieve an integrated and holistic water use and allocation policy. In a country where water resource management and regulation is fragmented, the regulatory framework must be amended to address the water shortage problem in an integrated manner, that is, with a determined water policy, effective interagency coordination and a strong apex body capable of implementing policy.
The National Water Resources Board
The Water Code of the Philippines designates the National Water Resources Board (NWRB) as the main agency tasked with water resource regulation and control over the utilization, exploitation, development, conservation and protection of water resources. The NWRB is authorized to, among others, (1) issue water permits for the use and appropriation water, and to revoke or amend a permit already granted; (2) determine the most beneficial use of water; (3) resolve water disputes among competing water rights; (4) review and approve rules and regulations prescribed by any government agency that pertain to the utilization, exploitation, development, control, conservation or protection of the country’s water resources; (5) impose and collect reasonable fees or charges from water appropriators and public utility operators which shall be used for the purposes deemed by the NWRB to be necessary for achieving its purposes and objectives; and (5) advise and appraise the National Economic Development Authority (NEDA) on matters pertaining to water resources development plans, programs and projects.
The NWRB is also designated as the economic regulator of waterworks systems. The NWRB regulates and supervises water utilities outside the jurisdiction of Local Water Utilities Administration (LWUA), MWSS-RO, SBMA-RO. In 2002, the approval of tariffs for water districts was transferred to the NWRB from the LWUA, but, due to NWRB’s limited staff requirements, LWUA continues to review and approve water adjustments of water districts where it has financial exposure.
More than thirty years after its creation, NWRB, the primary regulatory agency tasked to perform water resource and economic regulation nationwide, has fallen short of its mandate. What was originally intended as the apex body for water sector is unable to perform even its basic functions due to resource limitations within NWRB, and poor interagency coordination. NWRB reports that only thirty-five percent (35%) of users who should have water permits actually have them. Even the President became directly involved in tariff decisions of the NWRB even if the agency was ostensibly autonomous. The NWRB also suffers from underfunding from the national government, which limits its ability to hire experts, obtain complete data for planning and management, and to regularly monitor water resources and water sector activities at the national and local levels.
Different agencies, different mandates
Another factor that hinders the NWRB from performing its mandate is the overlapping functions and uncoordinated efforts in administering regulatory policies and site-specific issues in water resources management. In the Philippines, there are numerous departments, bureaus and government owned and controlled corporations involved in water regulation, as show in the figure below.
Functional chart of water-related agencies in the Philippines
Source: NEDA. 2009. Philippine Water Supply Sector Roadmap.
These agencies deal with water supply, irrigation, hydropower, flood control, water management, and other water-related concerns in accordance with their respective mandates.
A summary of the roles of other key agencies is given below.
Local Water Utilities Administration. The LWUA governs local water districts in municipalities and cities, and review rates or charges established by local water utilities. LWUA was established in 1973 in response to problems then experienced by provincial water supply such as financing, institution weakness and technological inadequacies.
National Economic Development Authority. The NEDA formulates and approves social and economic policies on water resources. It advises the President and the NEDA Board of matters including infrastructure development, flood control and drainage water supply.
Department of Public Works and Highways. The Department of Public Works and Highways is responsible for flood control, drainage and water pipelines.
Department of Agriculture. The Department of Agriculture is charged with the assessment, development and conservation of existing and potential soil and water sources for agriculture, undertakes cloud seeding activities, and regulates the country’s fisheries and aquatic resources.
National Irrigation Administration. The National Irrigation Administration (NIA) undertakes program-oriented and comprehensive water resources projects for irrigation purposes, as well as concomitant activities such as flood control, drainage, land reclamation, hydropower development, watershed management. It is a government-owned and controlled corporation (GOCC) primarily responsible for irrigation development in the Philippines. The role NIA in the water sector is magnified by the fact that Water use is dominated by agricultural sector, with irrigation accounting for 82% of the country’s total water supply for irrigation.
Department of Environment and Natural Resources. The Department of Environment and Natural Resources is mandated to (1) undertake geological surveys of the whole country including its territorial waters and groundwater resources; (2) promulgate rules and regulations for the control of water, air and land pollution; and (3) promulgate ambient and effluent standards for water and air quality; (4) approves environmental impact statements and issues Environmental Compliance Certificates for water projects; (5) protect, develop, manage and conserve forest lands and watersheds; and (6) protect and conserve natural wetlands.
Laguna Lake Development Authority. The Laguna Lake Development Authority is responsible for regional water resources development and management in the Laguna Lake catchment area and exercises environmental protection and jurisdiction over the lake basin’s surface water.
National Power Corporation. The National Power Corporation is responsible for the operation of government’s remaining electric power generation facilities including hydroelectric plants, dams, reservoirs, diversion facilities, and plants and watershed management. The role of NPC is especially significant because fifty-six percent (56%) of water use is dedicated for power purposes.
Department of National Defense. The Department of National Defense is tasked with monitoring the safety of dams and other water resources projects.
Department of Health. The Department of Health is responsible for overseeing the implementation and enforcement of the Code on Sanitation of the Philippines, including drinking water standards premises with sanitation installations.
Department of Interior and Local Government. The Department of Interior and Local Government supports the provision of water supply and sanitation by local government units (LGUs) by providing technical assistance and capacity building to LGUs. Provincial governments promote the development of infrastructure, including irrigation and water supply, while municipal and barangay governments promote water supply and sanitation at the municipal and barangay level, watershed protection and other programs. LGUs are also authorized to implement communal irrigation systems and local flood control projects.
Department of Transportation and Communication. The Department of Transportation and Communication plans, develops, operates and maintains ports and port facilities.
When responsive regulation does not work
Over the years, numerous challenges have beset the water sector directly or indirectly, and the government has invariably responded to those challenges through laws and issuances creating regulatory bodies or granting additional powers to already existing agencies. This menagerie of laws led to the current fragmented institutional and regulatory framework in the water resources sector and the absence of an integrated water resources management system that adopts a holistic approach to water sector demands.
The enactment of separate laws results in a weak and fragmented institutional and regulatory framework. With regulatory functions controlled by different agencies, enforcement becomes difficult, especially when mandates and accountabilities overlap. The lack of centralized sector information also impedes effective regulation, as when different agencies are tasked with data collection and monitoring of different segments of the water sector. These result in weak and inconsistent enforcement of water-related laws, rules and regulations.
While those laws and issuances were originally responsive to the needs of the water sector at the time they were enacted, they now pose another problem: weak enforcement and planning, and the current fragmented management hinder water regulators from responding to rapidly increasing demands for water supply.
Attempts at integration
Two bills were filed before the Fourteenth Congress (2007-2010) that attempt to integrate water regulatory functions, providing for a stronger economic regulatory framework. Senate Bill No. 799 even went as far as creating a regulatory body possessing, not only the current functions of the NWRB, but such other functions as the formulation of a national framework for integrated water resources management plan and collection of water resource related data.
A summary of the bills are shown below:
Forensic Law and Policy Strategies, Inc. or Forensic Solutions is a think tank offering services in the fields of policy, law reform, advocacy and governance. The group provides forensicstudy and viable legal options, giving our clients a crucial advantage in navigating executive, administrative, legislative and judicial inquiries.
Alberto C. Agra was the immediate past Secretary of Justice, Solicitor General and Government Corporate Counsel. As counsel of government institutions, he represented administrative agencies and government corporations on water, as well as water districts. He was a former Trustee of the Metropolitan Waterworks and Sewerage System and OIC Chief Regulator of its Regulatory Office. He teaches Law on Local Governments and Public Corporations.
Mari Jennifer M. Bruce is a consultant of the Asian Development Bank, former Associate of Puyat Jacinto and Santos Law Office, and former Director at the Office of the Chief Presidential Legal Counsel, and former Court Attorney in the Supreme Court. Her areas of expertise are water, energy and infrastructure.
1. E.g., streams, rivers, lakes, reservoirs.
2. DENR, GTE. 2010. Climate Change Adaptation Strategy for the Water Sector. DENR and GTE. Available online at http://portal.philwatsan.org.ph/public/publications/show/28.
3. http://kidlat.pagasa.dost.gov.ph/cab/climate.htm
4. Greenpeace. 2007. The state of water resources in the Philippines. Greenpeace: Quezon City.
5. Ibid.
6. Lontoc, Jo. Florendo B.. 2010. Water, Water, Everywhere? Ensuring the Country’s Water Security. The University of the Philippines Forum. May-June 201: Vol. 11, No. 3. Available online at http://www.up.edu.ph/upforum.php?i=323&. Subsidience is the gradual sinking of land due to over-extraction of groundwater.
7. Bridges, Geoff. 2007. Asia Pacific Water Forum: Country Chapter – Philippines: Asian Water Development Outlook 2007. ADB: Manila.
8. Lontoc, Jo. Florendo B. 2010. Water, Water, Everywhere? Ensuring the Country’s Water Security. The University of the Philippines Forum. May-June 201: Vol. 11, No. 3. Available online at http://www.up.edu.ph/upforum.php?i=323&.
9. Metropolitan Manila, Metropolitan Cebu, Davao City, Baguio City, Angeles City, Bacolod City, Iloilo City, Cagayan de Oro City and Zamboanga City.
10. ADB. 2004. Country Paper 2004 Philippines: National Water Resources Board. ADB: Manila.
11. Presidential Decree No. 1067 (1976). Other sources of the NWRB’s authority are: Presidential Decree 424 (1974), creating the Water Resources Council (NWRC); the Constitution of the Philippines (1987); Executive Order No. 124-A (1987) which converted NWRC to NWRB; PD 1206 (1977) which assigned the residual functions of the Board of Waterworks and the defunct Public Service Commission to NWRB.
12. Presidential Decree No. 1206 (1977).
13. Executive Order 123 (2002).
14. Jamora, Lorenzo H. Undated. Development and Regulation of Water Utilities:
The Philippine LWUA Experience. LWUA: Quezon City.
15. Bird, Jeremy, Wouter Lincklaen andArriens, Dennis Von Custodio. 2009. Water Rights and Water Allocation Issues and Challenges for Asia. Water for All Series 17. ADB: Manila.
16. Earhardt, David, Eric Groom, Jonathan Halpern, and Seini O’Connor. 2007. Economic Regulation of Urban Water and Sanitation Services: Some Practical Lessons. World Bank: Washington DC.
17. Lontoc, Jo. Florendo B. 2010. Water, Water, Everywhere? Ensuring the Country’s Water Security. The University of the Philippines Forum. May-June 201: Vol. 11, No. 3. Available online at http://www.up.edu.ph/upforum.php?i=323&; Bridges, Geoff. 2007. Asia Pacific Water Forum: Country Chapter – Philippines: Asian Water Development Outlook 2007. ADB: Manila; ADB. 2004. Country Paper 2004 Philippines: National Water Resources Board. ADB: Manila.
18. ADB. 2004. Country Paper 2004 Philippines: National Water Resources Board. ADB: Manila.
19. Presidential Decree 198 (1973).
20. Section 6, Execution Order 230 (1987).
21. Republic Act 3601 (1963), Presidential Decree No. 1 (1972).
22. The percentage assumes hydropower use is non-consumptive. The industrial sector accounts for 9%, while the 7% is allocated for domestic use.
23. Rongavilla, Luis S. 2007. Philippine Country Resources Situationer (Presentation to the Water Committee of the Philippine Chamber of Commerce and Industry).
24. Republic Act No. 4850 (1966), Presidential Decree 813 (1975), Executive Order 927 (1983).
25. Rongavilla, Luis S. 2007. Philippine Country Resources Situationer (Presentation to the Water Committee of the Philippine Chamber of Commerce and Industry).
26. Presidential Decree No. 856 (1975).
27. Republic Act 7169 (1991); NWRB. 2006. The Integrated Water Resources Management (IWRM) Plan Framework. NWRB: Quezon City.
28. Bridges, Geoff. 2007. Asia Pacific Water Forum: Country Chapter – Philippines: Asian Water Development Outlook 2007. ADB: Manila; NWRB. 2006. The Integrated Water Resources Management (IWRM) Plan Framework. NWRB: Quezon City.
29. ADB. 2004. Country Paper 2004 Philippines: National Water Resources Board. ADB: Manila.
30. Bird, Jeremy, Wouter Lincklaen Arriens and Dennis Von Custodio. 2009. Water Rights and Water Allocation Issues and Challenges for Asia. Water for All Series 17. ADB: Manila.
31. ADB. 2004. Country Paper 2004 Philippines: National Water Resources Board. ADB: Manila.
