Water Alliance General AssemblyMakati Shangri-La Hotel

30 April 2019

1

The Philippine Water Supply and Sanitation Master Plan (PWSSMP)

• The Philippine Water Supply and Sanitation Master Plan(PWSSMP) is aimed towards achieving Universal Access toWater Supply and Sanitation (WSS) services.

• It involves the strategies and policy reforms, as well as thepriority programs and projects (for the short, medium andlong-term) in achieving the WSS-related targets in thePhilippine Development Plan (PDP) 2017-2022, and the UNSustainable Development Goals (SDG).

What is the PWSSMP?

Water Supply Indicators

% of Population

2015 Baseline 2022 Target 2030 Target

With Access to Safe Water 87.7% 95.9% 100%

Without Access to Safe Water 12.3% 4.1% -

Households with Level 3 systems 43.6% 58.3% 77.1%

Households with Level 2 systems 11.2% 15.0% 14.0%

Households with Level 1 systems 45.2% 20.1% 8.9%

What are our targets?

What are our targets?

SanitationIndicators

% of Population

2015 Baseline 2022 Target 2030 Target

Households with septic tanks 74% 97% 100%

Households with access to septage collection services

17% 69% 100%

LGUs declared Zero Open Defecation

96% 100% 100%

What should we do?

No. Reform Agenda Focus

1 Establishing Effective WSS Sector Institutions

Addressing the fragmented sector

2 Strengthening Regulatory Environment

Regulating and managing water resources and WSPs, including water tariff

3 Balancing Water Supply and Demand

Managing finite water resources with end-users

4 Building Climate Resiliency Adapting to climate change

The Eight Key Reform Areas

What should we do?

The Eight Key Reform Areas

No. Reform Agenda Focus

5 Creating and Ensuring Effective WSS Services

Ensuring effective and sustainable WSS services and service providers

6 Enabling Access to Funding and Financing

Improving access to funds

7 Managing Data and Information Ensuring availability and accessibility of reliable WSS data

8 Driving Research and Development

Investing on research and innovations

No. Reform Agenda Proposed Reforms

1 Establishing Effective WSS Sector Institutions

• Create and establish the WSS Apex Body

• Institutionalize a science-based river basin approach that integrates the IWRM principles

• Foster integrated and coordinated WSS efforts with LGUs, partner institutions, and stakeholders.

• Prepare provincial and municipal levels master plans to help achieve the targets

Addressing the fragmented sector

The Eight Key Reform Areas

The Eight Key Reform Areas

No. Reform Agenda Proposed Reforms

2 Strengthening the Regulatory Environment

• Support the creation and establishment of the Water Regulatory Commission (WRC)

• Review and improve the economic regulatory guidelines of LWUA, NWRB, MWSS

• Establishing a PPP arrangement suitable for WSPs

• Review, rationalize, and improve NWRB guidelines for granting of water permits

• Review existing water permits and CPCs • Enforce issued permits and the limits

Regulating and managing water resources and WSPs, including water tariff

The Eight Key Reform Areas

No. Reform Agenda Proposed Reforms

3 Balancing Water Supply and Demand

Managing finite water resources with end-users

• Increase drainage and sanitation facilities and incorporate treatment facilities for potential re-use.

• Prioritize development of surface water sources for water-critical areas and incorporate groundwater recharge system

• Adopt provincial or district bulk (surface) water supply systems and encourage multi-purpose reservoir development and optimization;

• Promote programs towards reducing NRW and increasing efficiency

The Eight Key Reform Areas

No. Reform Agenda Proposed Reforms

4 Building Climate Resiliency

Adapting to climate change

• Issue guidelines to require climate-resilient design standards of all developers;

• Build capacity of WSS service providers on climate change adaptation and designing and constructing climate resilient structures

• Incorporate septage treatment in plans for emergency and disaster response

• Promote use and storage of rainwater.

The Eight Key Reform Areas

No. Reform Agenda Proposed Reforms

5 Creating and Ensuring Effective WSS Services

Ensuring effective and sustainable WSS services and service providers

• Define the most appropriate institutional arrangement for WSS provision

• Study and develop alternative models of PPP/PSP for medium-sized WSPs where the community is the partner of government

• Develop LGU-run water utilities into financially viable and sustainable organizations

• Develop and implement capacity building program for all agencies that have a key role in the development of the WSS sector

• Strengthen sector planning and development

The Eight Key Reform Areas

No. Reform Agenda Proposed Reforms

6 Enabling Access to Funding and Financing

Improving access to funds

• Implement the UFF in the sector• Review and improve financing policies and

coverage• Build the capacity and offer technical

assistance to WSPs and LGUs in accessing financing

• Explore other options and mechanisms, such as design-build-operate and related schemes

The Eight Key Reform Areas

No. Reform Agenda Proposed Reforms

7 Managing Data and Information

Ensuring availability and accessibility of reliable WSS data

• Harmonize and integrate WSS data• Establish and operationalize the Philippine

WSS Information System (PWSSIS)• Build capacity of the apex body and

PWSSIS-trained data custodians • Compel data custodians to regularly enter

and upload WSS related data

The Eight Key Reform Areas

No. Reform Agenda Proposed Reforms

8 Driving Research and Development

Investing on research and innovations

• Establish a Research and Development Division;

• Improve accreditation of new WSS-related technologies;

• Adopt innovative technologies and cost-effective solutions; and

• Ensure availability of government financial support on local WSS -related inventions

Why do we need it?

Why do we need it?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Percent of Families with Access to Safe Water,by region and service level (2015)

Level 3 Level 2 Level 1

Current Institutional Setup for the Water Resources Sector

Why do we need it?

• Based on 2016 data, LWUA oversees 748 active WDs : 515 (69%) are operational and 233 (31%) are reported non-operational.

• The country has approximately 4,144 LGU-run utilities – only 1,421 of which operate Level III systems. The organizational typologies of these providers are CBOs, RWSAs, BWSAs, and cooperatives. Currently, DILG helps address the institutional development needs of these LGU-run utilities.

• There are existing regulations from DOH, EMB and LGUs on septage and sewerage management. However, it is reported that only 3% and 0.10% of the population outside Mega Manila are served by septage managementand sewerage systems, respectively.

Why do we need it?

• Natural Resources System

– the country will experience high water stress due to high total water withdrawal against projected renewable water resources by 2040.

• Socio-Economic System

– increasing population and economic growth increases water demand and generation of waste and wastewater.

• Administrative and Institutional System

– NWRB does not have appropriate institutional structure to complement itsmandate

What are the challenges?

• Policies, Regulation, and Management

– several economic regulatory agencies for water, which makes the sectorvery inefficient in its regulatory functions

• WSS Infrastructures and Services

– insufficient investments in WSS sector

What are the challenges?

How much will it cost us?

Investment Requirement (in Php Million)

2019-2023 2024-2030

Physical 733,657 334,529

Water Supply 278,070 233,011

Level 3 234,107 216,953

Level 2 37,559 15,315

Level 1 6,404 743

Sanitation 455,587 101,518

Improved/Basic 349,495 84,022

Septage 48,891 5,998

Sewerage 57,201 11,498

Non Physical 658 469

Reform Areas 323 -

Project Management 335 469

TOTAL 734,315 334,998

How will we fund the water supply?

Development Loans37%

Private Capital

6%

Commercial Loans43%

Grant Allocations

14%

• Development Loanso water investments from GFIs and LWUA

• Commercial Loanso private sector financing to fund water

infrastructure investments. • Private Capital

o investments from WSPs’ partnerships with private operators.

• Grant Allocationo subsidies for WSPs that cannot afford to

extend its service to outlying areas

Preliminary Estimates (subject to refinement under the UFF)

What’s the financing plan? Preliminary (subject to refinement under the UFF)

• Level 3

– Grant financing (VGF and OBA) based on criteria

– Technical assistance grants for non-operational WDs and qualified LGU-runutilities

– Financial assistance to WDs under LWUA’s revised lending policies

– GFIs and PFIs Commercial loan programs for eligible WSPs

– Private capital funds for HUCs and WSPs under joint venture agreements

• Level 2

– 100% grant allocation for Top 20 provinces with highest poverty incidence;50%-50% loan grant mix for the remaining provinces

– Blended finance, through MFIs or NGOs, to fund users’ equity

What’s the financing plan?

Preliminary (subject to refinement under the UFF)

• Level 1

– 100% grant financing to support the poor rural communities

– target-aid also extended to community-based WSPs or institutions servingthe rural areas

How will we fund for sanitation?

Development Loans53%

User's Equity

1%

Grant Allocations

45%

WSP Equity1%

Development Loans User's Equity

Grant Allocations WSP Equity

Preliminary Estimates (subject to refinement under the UFF)• Development Loans

o Water investments from GFIs and LWUA• User’s Equity

o Individual private sector funds for sanitation investments

• WSP Equityo Equity from water service providers for

sanitation investments • Grant Allocation

o Subsidies for users/WSPs that do not have sanitation funding

How do we go about it?

20

19

-20

23

Pre-Investment and Program Implementation

- Drafting and Approval of Key Reform Agenda

- Preparation of TOR

- Programming and Financial Planning

- Implementation of Identified Priority Programs

20

24

-20

30

PWSSMP Full Implementation

- Implementation of Investment Programs

- Implementation of Key Reform Agenda 2

03

0-2

04

0

PWSSMP Continuing Program

- Completion of Projects

- Implementation of Long Term Reforms

- Monitoring of Accomplishments

What are we doing now?

Department of Public Works and Highways (DPWH)• Tourism Water Supply Infrastructure (TouWa) Program• National Sewerage and Septage Management Program

Department of the Interior and Local Government (DILG)• Provision for Potable Water Supply - SALINTUBIG Program• Preparation of Concept Designs for Bulk Water Supply in Selected Provinces in the

Philippines

Metropolitan Waterworks and Sewerage System (MWSS)• Implementation of projects under the Water Security Legacy Plan, e.g. Angat Dam and

Dyke Strengthening, Kaliwa Dam Project• Other activities by the Concessionaires, e.g., NRW reduction, sewerage and septage

management coverage expansion

What are we doing now?• Transforming and strengthening the NWRB into the National Water

Management Council (NWMC)

– short-term strategy and an interim measure pending the passage of the apex body for the WSS Sector

• Creation of an apex body for the water resources sector: the "Department of Water Resources"

– addresses the weak, and fragmented institutional setup

– consolidates of water-related mandates of different agencies

• Creation of an independent regulator for the WSS sub-sector: the "Water Regulatory Commission"

– separates economic and financial regulation and operation functions of agencies vested with dual functions

– harmonize regulatory practices, processes and fees in the sub-sector

What are we doing now?

• Unified Financing Framework (UFF)

– aims to address the inequitable delivery of basic WSS infrastructure caused by inadequate financing, low technical capacities of small service providers, and institutional challenges

– provides a structure for rationally allocating available resources towards expediting the improvement and expansion of WSS services

– currently, a preliminary design for the initial operationalization program of the UFF (which will be applied to existing programs, such as the SALINTUBIG and LWUA Loan Program) is being prepared for inclusion in the 2020 general budget appropriations

What are we doing now?

Project Development and Other Related Studies (PDRS) Fund

– facility established in FY 2018 for project development and implementation of key infrastructure projects, including water resources infrastructure projects

– Some studies funded under the PDRS:

• Preparation of Non-Revenue Water Reduction/Control studies and Sanitation Concept Designs for various Water Districts (WDs) (e.g., small and medium-sized WDs, non-operational WDs, WDs not covered under the SC Mandamus)

• Preparation of Sustainable Infrastructure Development Master Plans (M/Ps) for various cities (e.g., Cagayan de Oro, Ormoc, Vigan, Butuan, Pagadian, Tuguegarao, Bacolod, etc.)

What are the possible next steps/areas for assistance?

• Preparation of the Implementing Rules and Regulations (IRR) of the Executive Order on strengthening and transforming the NWRB into the NWMC (once signed)

• Technical Assistance to NWRB / NWMC

- Upgrading of modeling tools and resource assessment studies, comprehensive data updating and collection including improvement of database management systems, and other decision support systems

- Capacity development

What are the possible next steps/areas for assistance?

• Harmonization of NWRB’s (or future NWMC’s) Existing Tariff Methodology with the UFF Methodology

- With due consideration to future implementation of the UFF and possible passage of the WRC

• Preparation of harmonized guidelines and targets for LGU and WD performance (including, among others, an audit tool) with respect to the delivery of water and sanitation services

Thank you!