Water supply in the Philippines

Water supply is the process of providing water in a systematic way through installed pumps and pipe lines. Before water is provided to a specific area, it undegoes a process called sanitation to ensure that the quality of water received is safe for human consumption. The Philippines’ water supply system dates back to 1946 after the country achieved its independence. Government agencies, local institutions, non-government organizations, and other corporations are primarily in charge in the operation and administration of water supply and sanitation in the country.

Water Resources
The Philippines’ main sources of water are rivers, lakes, river basins, and groundwater reservoirs. The longest and largest river, Cagayan River, discharges approximately 53, 943 million cubic meters of water annually. Its groundwater reserves are 47, 895 million cubic meters replenished by rainfall and seepage from rivers and lakes. The lakes are utilized mainly for fish cultivation. The four major groundwater reservoirs are in Cagayan, Central Luzon, Agusan, and Cotabato. There are 438 major dams and 423 smaller dams. Dams and reservoirs are mainly used for: water storage, water supply, irrigation, regulation of flood, and hydropower.

The Manila metropolitan area water is mostly supplied by the Angat Dam, Ipo Dam, and La Mesa Dam (also known as Angat-Ipo-La Mesa water system). Some of the well known and larger dams in rural areas are: Ambuklao Dam, developed for flood control, irrigation, and hydroelectric power source of Baguio and some places in Luzon; and Magat Dam, a major source of irrigation water and hydroelectric power in Isabela.

Water Use
28.52 billion m³ of water was withdrawn from various sources in the Philippines in 2000: 74% (21.10 billion m³) was used for agricultural purposes, 9% (2.57 billion m³) for industrial processes, and 17% (4.85 billion m³) for domestic consumption.

Agricultural water management in the Philippines primarily focuses on the subject of irrigation. The country has 3.126 million hectares of irrigable land, 50% (1.567 million hectares) of which already has irrigation facilities. 50% of irrigated areas are developed and operated by the government through the National Irrigation System (NIS). 36% is developed by the government and operated by irrigators’ associations through the Communal Irrigation System, while the remaining 14% is developed and operated by individual or small groups of farmers through a Private Irrigation System (PIS).

The use of water for industrial purposes include the “utilization of water in factories, industrial plants and mines, and the use of water as an ingredient of a finished product.” Industries that are found to be water-intensive are involved in the manufacturing of food and dairy, pulp and chemical products, and textile materials. These industries are usually found in the National Capital Region, CALABARZON, and Region III. In a study by the United Nations Industrial Development Organization (UNIDO) in 1999, the intensive use of water in industry is critical in terms of the production of hazardous wastes. Thousands of tons solvent wastes, heavy metals, lubricants, and intractable wastes are improperly disposed of annually in Metro Manila.

According to a study by David and Inocencio, the medium of water provision is dependent on the income class of a certain household. Higher income brackets usually rely on private waterworks as a source of water, while lower income brackets usually consume less by depending on vended water (sold by those who have access to private waterworks). Lower income households pay much higher water prices than higher income households because of their lack of access to water service providers.

Service provision
In 2000, the average water production was 175 liters per day per capita (l/d/c). According to the National Water Resources Board (NWRB), the average consumption of water was 118 l/d/c in 2004. The highest consumption was recorded in the East Zone of Metro Manila with 232 l/d/c.

Levels of water systems
According to a 2005 World Bank study, approximately 5,000 service providers exist in the Philippines. Most of them only provide water, while sanitation is still expected to be a private responsibility. The water infrastructure provided is classified into three levels.

Levels of water systems in the Philippines
Level I Stand-alone water points (e.g. handpumps, shallow wells, rainwater collectors) serving an average of 15 households within a 250-meter distance
Level II Piped water with a communal water point (e.g. borewell, spring system) serving an average of 4-6 households within a 25-meter distance
Level III Piped water supply with a private water point (e.g. house connection) based on a daily water demand of more than 100 liters per person

Local Government Units
Most households in the Philippines are provided water by their Local Government Units (LGUs), either directly through a city or municipal engineering department or through community-based organizations (CBOs). CBOs involved in water supply include 200 cooperatives, 3,100 Barangay Water and Sanitation Associations (BWSAs) and 500 Rural Water Supply Associations (RWSAs). CBOs usually operate Level I or Level II water supply systems with support from the national government or non-governmental organizations (NGOs). In many cases, the CBOs later convert Level I and II facilities into Level III supply systems.Typically, all LGU-operated arrangements do not recover their full costs and rely heavily on local government subsidies.

Water Districts
A water district is a utility that is legally and financially separate from the municipality. In urban areas outside of Metro Manila, water districts served around 15.3 million people from 861 municipalities in 2011. To form a water district, the local government needs confirmation from the Local Waterworks and Utilities Administration (LWUA), a specialized lending institution for provincial waterworks, from which it will receive technical assistance and financial support. The local government appoints the board members of the water districts. This system typically has better performance and higher cost recovery than water systems that are run directly by municipalities. The Philippine Association of Water Districts (PAWD), fosters the exchange of experiences between water districts and provides training to its members. In 2010, USAID and the ADB agreed to support PAWD in establishing a national Water Operators Partnerships (WOPs) program that promotes twinning partnerships among Water Districts.

Large-scale Private Operators
In Metro Manila, water service has been carried out by two private concessionaires since 1997: The Manila Water Company in the East Zone, and Maynilad Water Services, Inc. in the West Zone. Although national government has supported private service providers since the 1990s, there are few arrangements outside of Metro Manila. Joint ventures exist in Tagbilaran City and in Subic Bay. These private water service providers provide Level III services together with water districts.

Small-scale independent providers
A significant share of the population in urban areas receive services from small-scale independent providers. It was estimated that before privatization in the late 1990s, 30% of the population of Metro Manila depended on them, majority buying water in bulk from water providers to sell it on to individual users. There are also some cases of cooperation by concessionaires and independent providers. In August 2007, 250 small-scale providers formed the National Water and Sanitation Association of the Philippines (NAWASA) as a gathering avenue for small-scale water service providers.

Benchmarking of water utility models
Local Government Units (LGU) Water Districts Private Operators
Quality of supply Level I, II, and III Level III Level III
Availability (hours per day) 19 23 22
Consumption (liters per capita per day) 112 120 144
Staff (per 100 connections) 8 7 6
Tariff (Philippine peso per cubic meter) 7.60 17.82 15.37
Economic Regulation National Water and Resources Board (NWRB) National Water and Resources Board (NWRB) According to contract
Financing Public, NGOs, Tariffs Local Waterworks and Utilities Administration (LWUA), Tariffs Tariffs

Water supply
In 2015, 92% of the total population had access to “at least basic water”, or 94% in urban areas and 90% in rural areas. In 2015, there were still 8 million people without access to “at least basic water”. The term “at least basic water” is a new term since 2016, and is related to the previously used “improved water source”.

In earlier years, according to the Joint Monitoring Program (JMP) report on March 2012, 43% of the Philippines had access to Level III private water service providers in 2010. Access to an improved water source increased from 84% in 1990 to 92% in 2012. However, there is a wide inconsistency between the access to water of urban areas (61%) and rural areas (25%). Although overall spending remained low, the national government has begun increasing investments in sectors outside Metro Manila.

Sewage and Sanitation
In 2015, 74% of the total population had access to “improved” sanitation, or 78% in urban areas and 71% in rural areas. In 2015, there were still 27 million without access to “improved” sanitation.

In 2005 the situation was as follows: Only 5% of the total population was connected to a sewer network.The vast majority used flush toilets connected to septic tanks. Since sludge treatment and disposal facilities were rare, most effluents were discharged without treatment. Within the entire country, septic tanks are the most common method of sewage treatment. In Metro Manila alone, about 75 local companies provide tank-desludging services.

The first Philippine constructed wetland, serving about 700 households, was completed in 2006 in a peri-urban area of Bayawan City which has been used to resettle families that lived along the coast in informal settlements and had no access to safe water supply and sanitation facilities. In March 2008, Manila Water announced that a wastewater treatment plant was to be constructed in Taguig.

Economic Aspects

Water Bill Information

Current Charges Before Tax
Basic charge: This covers the cost of operating, maintaining, improving and expanding the distribution network, as well as the facilities responsible for bringing potable water to the end user. The Basic Charge is based on the latest approved tariff schedule.

Foreign Currency Different Adjustment (FCDA): This is a percentage of the Basic Charge which accounts for fluctuations of the Philippine Peso against other countries’ currencies subject to periodic review and adjustment. The FCDA for the second quarter of 2015 is 0.18% of the Basic Charge.

Environmental Charge: This is for the mitigation of environmental impacts in the course of water and wastewater operation. It is 20% of the Basic Charge applicable to all customers.

Sewer Charge: 0% of the Basic Charge is added for Residential and Semi-Business customers with a sewer line connection. 30% of Basic Charge, on the other hand, is charged for Commercial and Industrial customers.

Maintenance Service Charge: This covers the maintenance of the water meter. The charge changes depending on the size of the water meter. The minimum charge is 1.50 Philippine pesos for a 13mm-sized meter.

Value Added Tax
The value added tax (VAT) is charged by the government and accounts to 12% of the sum of the items included in current charges before tax.

Other charges
These are special miscellaneous charges such as connection fees, unscheduled desludging of septic tank service fees, etc.

Previous Unpaid Amount
This pertains to charges billed prior to the billing period. This should be settled immediately together with the current charges to avoid disconnection of water service.

The fragmented sector led to different tariff structures and levels according to the respective management model. The connection fees, which are charged in most of the cases, often impede new connections for poverty-stricken areas.

LGU-operated systems In LGUs, tariff levels and structures vary widely. Since most connections are not metered, it is difficult to charge tariffs depending on consumption. Where LGUs provide Level I or II services, they usually charge no or very low tariffs, although connection fees are common. The costs of providing the service are usually met by local governments. The NWRB in its benchmarking project had about half of the average tariff of private operators and water districts.The cost of tariff in LGU-operated systems is, on average, lower than other management models. In order to introduce cost recovery tariffs and effective regulation, the NWRB issued a primer on tariff setting and regulation in March 2005. The document provides the basic guidelines of tariff setting. The manual helps to determine future revenue requirements and to set annual base tariffs based on estimated consumption levels.The process of tariff approval as well as the guidelines to prepare the required annual report are described in detail. Furthermore, the document gives advices on tariff structures and water rate adjustments.

Water Districts. In water districts, tariffs increased notably since 1996. The tariff structure is similar to the model used in Metro Manila, with an average tariff for the first 10m³ and increasing tariffs for additional consumption. At the end of 2006, the national average tariff for 30 m³ was US$0.36 per m³, which is more than double of 1996. The NWRB found an average tariff of US$0.41 within a sample of 18 water districts in 2004, which is the highest average tariff of all management models. The average connection fee was US$55, somewhat lower than among private operators.

Metro Manila In the capital region, an initial tariff is to be paid for the first 10 m³ consumed, with increasing blocks for additional consumption. Furthermore, consumers connected to sewerage pay an additional charge of 50% and all users must pay a 10% environmental surcharge. For new consumers, a connection fee is charged, which was US$134 in April 2007 in the East Zone According to the MWSS Regulatory Office, just before privatization, the average tariff per m³ in Metro Manila was US$0.26. After the concession contracts came into force in 1997, tariffs dropped to US$0.05 (East Zone) and US$0.12 (West Zone). In 2006, the average tariff rose to US$0.31 in the East Zone and US$0.43 in the West Zone (all figures converted into real 2006 prices). While the tariff was highest among private operators, the connection fee was higher within water districts.

Others.Users who rely on other sources such as private small-scale operators mostly pay more for water. In the capital region, it is a common practice to buy water from MWSS and resell. In this case, small-scale operators pay a higher tariff than the residential one and pass the higher cost on to the end-user.

The operation ratio (O) of a certain water service provider reflects its cost-recovery situation. It is computed by the following formula:


where O is the operation cost, C is the total annual cost, and R is the annual revenue. An operation ratio under 1 means that revenues cover the costs of operation and maintenance. In a study last 2004, only 5 out of 45 had an operation ratio of more than 1, reflecting a poor operation ratio among majority of the participating utilities. All the loss-making providers were operated directly by LGUs, and were mostly characterized by a high share of non-revenue water, poor service continuity, low tariffs, and low coverage within their respective service area. The five best-performing service providers consisted of four water districts and one private operator.

According to the World Bank, investment in water supply and sanitation from 1983 to 2003 has been far below the required levels to maintain assets, to expand access and to improve service quality. Total investment has fluctuated at around ₱3-4 billion a year, while the cost of implementing the Clean Water Act of 2004 has been estimated at up to P35 billion a year.

Drinking water quality
Water quality usually does not meet the standards set by the national government, especially in urban areas. As a result, waterborne diseases remain to be a severe public health concern in the country. About 4,200 people die each year due to contaminated drinking water.

Non-revenue water
Non-revenue water (NRW) is defined as the difference between the amount of water put into the distribution system and the amount of water billed to consumers. It is usually used as an indicator for water utility performance. High levels of non-revenue water usually indicate low quality water utility. It has three components: physical losses, which consist of leakage from the system caused by poor operations and maintenance, the lack of active leakage control, and poor quality of underground assets; commercial losses caused by under-registration of water meters, errors in data handling, and theft, and unbilled authorized consumption which includes water used by a specific utility for operational purposes (e.g. firefighting and specific consumer groups).

Non-revenue water decreased in the East Zone of Metro Manila since privatization. In 1996, Manila had an NRW of 61%, while capital cities from other Asian countries ranged from having 35–38%. In 2002, NRW dropped to 53% in the East Zone. On the other hand, non-revenue water in the West Zone increased as the primary waterwork utility encountered severe financial problems. According to Manila Water, one of the private concessionaires, the share of NRW continued to fall until the end of 2010 where it reached 11%.

According to the National Water Resources Board (NWRB), the average share of NRW among participating service providers was 27.5% in 2004. The particularly high NRW of Manila’s West Zone was confirmed to have a record with 68%. Generally, the smaller utilities performed better concerning NRW than the larger ones. However, many NRW data are based on estimates, given the fact that only 15 of the 45 service providers had 100% production and consumption metering coverage.

Labor Productivity
The number of staff was reduced at the Metropolitan Waterworks and Sewerage System (MWSS) after privatization. On average, 10 employees were responsible for 1,000 connections in 1996. Fast forward to 2002, only about 4 employees were left, reflecting a decreases of around 58%. According to LWUA, only about 7 employees per 1,000 connections worked in water districts in 2002. In contrast to water districts, LGUs have an average of 21 employees per 1,000 connections in 2002. However, small LGUs still suffer from their low number of total connections.

The NWRB Philippines Towns Water Utilities 2004 Data Book found, on average, 7 employees per 1,000 connections in 2004. Private utilities, on average, performed best and systems which were directly managed by LGUs performed worst. Not surprisingly, providers with more than 10,000 connections need significantly fewer employees per connection than those with fewer than 10,000 connections.

Other challenges
The NWRB Philippines Towns Water Utilities 2004 Data Book found, on average, 7 employees per 1,000 connections in 2004. Private utilities on average performed best and systems which were directly managed by LGUs performed worst. Not surprisingly, providers with more than 10,000 connections need significantly fewer employees per connection than those with fewer than 10,000 connections.

Population and Pollution
One third of Philippine river systems are considered suitable for public water supply. It is estimated that in 2025, water availability will be marginal in most major cities and in 8 of the 19 major river basins. Besides severe health concerns, water pollution also leads to problems in the Fishing and Tourism industries. The national government recognized the problem and since 2004, has sought to introduce sustainable water resources development management.

With rapid increase in population, urbanization, and industrialization, the quality of Philippine waters is reduced especially in densely populated areas and regions of industrial and agricultural activities. According to data from the DENR and PEM, domestic wastewater discharges, agricultural wastewater, and industrial wastewater are the three main sources of water pollution. These are also known as “point sources” that emanate toxic substances into “non-point sources” or certain bodies of water. Domestic wastewater consists of sewage containing organic waste, solids, and coliforms produced by domestic activities such as laundry, bathing, cooking, and other kitchen activities. Agricultural wastewater, the major source of pollution in rural areas, contain pollutants resulting from agricultural and livestock activities like the maintenance of piggeries which usually do not have proper wastewater treatment facilities. Different industries also contribute largely to the water pollution. Industrial activities such as manufacturing of food, textile, paper, and slaughterhouses emit large amounts of organic waste.

El Niño and Global Warming
El Niño, a weather phenomenon occurring about every two to seven years when warm water in the western tropical Pacific Ocean shifts Eastward, causing ocean temperatures to be warm, last developed in the country in late 2014. For the past several decades, it has been observed that its occurrence has increased due to climate change as a result of global warming. Its negative impacts may either be heavy rainfall or drought. El Niño greatly impacts the power supply, water supply, and agricultural sectors of the country. The reduced rainfall leading to drought causes shortage in water supply leading to the rationing of water in some situations, shortage in hydropower supply, and food supply.

Denudation of Forest Cover
The supply of water from most freshwater bodies usually come from watersheds — patches of forest cover that absorb rainwater and channel it into streams, rivers, and eventually dams where many human communities (especially Metro Manila) source their freshwater. Despite the role of the forest in the replenishment and maintenance of both ground and surface water, the Philippines is considered to be one of the most severely deforested countries in the tropics as it lost more than 97% of its original forest cover in the last 50 years.

Saltwater Intrusion
One of the areas in most risk of saltwater intrusion is Metro Manila. Since the late 1960s, saline water intrusion has been evident along the coastal areas of Metro Manila, stretching from Las Pinas to Malabon. The shallow water table aquifer is in direct contact with the sea in these coastal areas. The over-pumping of groundwater results to cones of depression which increase the risk of saltwater intrusion. According to a joint study by MWSS and JICA in 1991, most groundwater samples from Metro Manila’s coastal areas were salinized. However, compared to the early 1980s, saline intrusion was found to have improved conditions because of the conversion of water source from groundwater to surface water upon the completion of the Manila Water Supply Project II in 1987. Aside from excessive withdrawal of groundwater, seepage of brackish water along the Pasig River is another cause of saltwater intrusion because of seawater movement during tides.

Source from Wikipedia