THE PHILIPPINECOUNTRY REPORTPrepared by:Ms. Yolanda B. GomezPhilippine Water Partnership

WRM FINANCING STUDY IN THE PHILIPPINES

Global Water Partnership Southeast AsiaHotel Mi Casa, Yangon, Myanmar October 3, 2013

Presentation Outline

• Objective • Methodology • Limitations • Summary of Findings• Way Forward (What Needs to be Done)

Study Objectives

• To understand the financing framework/s for water resources management and development

• To generate information as to the level of public investments for WRM initiatives

• To propose potential financing schemes and mechanisms to increase level of financing

Scope/Methodology/Limitations

• Covered water supply, sanitation, irrigation, hydropower and environment

• A desktop study including a national consultation workshop, key informant interview and small group discussion; relied on reports from concerned agencies

• Flood management (urban flood management) and coastal resources management were not covered

Philippine WRM Overview

• Complex and fragmented with more than 30 agencies engaged in WRM

• Water resources under threat due to: population growth, urbanization, increasing water pollution, groundwater over extraction, water related disasters

• WRM programs and projects come in various forms and categories

• Tracking investment is not easy

Philippine WRM Overview

NATIONAL WATER RESOURCES BOARD

Functional Chart of Water Related Agencies Philippines

NAPC-WASCODOF-CDADBP DAR

DPWH MWSSLWUA-WDsPTA HUDCCDILG-PMO

PEZA LGUs

Water Supply

NIA DABSWM

Irrigation

DOE PSALMNPC PEMC

Hydro Power

BFAR

Fisheries

DOST-PCAFNRRD

ERDB

Research

PAF BSWM

Cloud Seeding

EMB DOHBRL EHS

LGUs MWSSLWUA-WDs

Water Quality & Sanitation

FMB BSWMNIA NPC

PAWB

WatershedManagement

NWRB BRSNAMRIA LWUAMGB PAGASA

MWSS NIA

DataCollection

DPWH-PMOOCD-NDCC

PAGASAMMDA

FloodManagement

LLDA RDCsBOI PEZA

RBCO

Integrated AreaDevelopment

NEDA

Policy Making

NWRB

Coordination / Regulation

DENRNEDADOFDOJDOH

NHRCExec Dir, NWRB

SUMMARY OF FINDINGS

Study Findings: General Policy Framework

• WRM is a major responsibility of the government• Financing subsumed as part of the government

expenditure program, i.e., budget sourced from the government

• Part of the general budget process and procedures

• Annual budget and medium term budget• General Appropriations Act• Presence of WRM framework at subsectors level

Study Findings: Budget Sources

3 Major categories:• Public funds – flow through the national or local

governments and are raised through general taxation, public borrowings and official development assistance

• Private funds - flow directly between government and WRM implementing agencies; involve commercial and development bank lending programs or from private/business sector

Study Findings: Budget Sources

3 Major categories:…• Semi-public/charitable funds – funds in the form

of fees and charges derived from use of water resources by foundations, donors, and NGOs

Study Findings- Budget Sources

• National government budget – allocation to WRM government agencies ( agency budget or subsidies and allocation to financial institutions for loans)

• Local Government budget – internal revenue allocations

• Official Development Assistance (ODA) from bilateral and multilateral development partners

• Public-Private Partnership (PPPs)

Study Findings- Budget Sources

• Irrigator’s fees ( for irrigation subsector)• Market based instruments such as payment for

environmental services- application of users’pay principle and polluters’ pay principles

Study Findings: Strategies and Approaches

• PPP – a tool promoted by government in forging partnership to finance WRM projects and anchored on the Philippine BOT Law

• Market –based instruments- 2 modalities: users’ pay principle in the form of fees ( abstraction fee, raw water fee); polluters fee or environmental users fee system

• Co-sharing and leveraging – use of funds sourced from pooled resources of LGUs

• Performance-based grants

Study Findings: Examples WATSAN Strategies and Approaches for LGUs

• Service contract• Management contract• Lease contract• Concession contract• Joint-venture agreement• Build –Operate-Transfer

Study Findings: WRM Financing and Investment Needs

WRM Financing Level – 2006 to 2010

Particulars Total Funding (in M US$)

Remarks

WRM Policy development and implementation

8.28

WATSAN infra development

3,374.67

Hydropower 3,059.36

Irrigation 1,357,65

Environment 1,015.43

Flood control & mitigation

1,719.07

TOTAL 10,552.45

Study Findings: WRM Financing and Investment Needs

WRM Financing Needs – 2012 to 2016

Particulars Total Funding (in M US$)

Remarks

WRM Policy development and implementation

11.5

WATSAN infra development

120.5

Hydropower 273.3

Irrigation 334.5

Environment 834.1

Total 3,365.6

Funding for proposed NWRMO• A very recent study as part of the proposed

water sector structuring to address major governance and institutional challenges

• Recommendation: reconstitute, elevate and strengthen the current NWRB into a National Water Resources Management Office (NWRMO)

• Vision: water security in support of socio-economic growth thru sustainable WRM

• Estimated total budget requirement is PhP 1 B (US$23M) and annual budget of PhP450M (US$10M)

Funding for proposed NWRMO• A very recent study as part of the proposed

water sector structuring to address major governance and institutional challenges

• Recommendation: reconstitute, elevate and strengthen the current NWRB into a National Water Resources Management Office (NWRMO)

• Vision: water security in support of socio-economic growth thru sustainable WRM

• Estimated total budget requirement is PhP 1B (US$23 M) and annual budget of PhP 450M (US$10M

Financing Issues, Gaps, and Concerns Identified• Fragmented financing for WRM programs and

project• Inadequate level of WRM financing• Lack of monitoring and tracking mechanism to

regularly capture and analyze financing for WRM• Low priority accorded to WRM compared to

other subsectors• Lack of comprehensive and common WRM

framework

Financing Issues, Gaps, and Concerns• High dependence on national government for

WRM financing• Limited use of MBIs to fund WRM programs• Absence of a lead coordinator for WRM

planning, monitoring of fund flows and investment planning

• Lack of a national account system for WRM• Practice of budget based investment planning

rather than investment planning –based budgeting

What needs to done: Way forward• Come up with a clear and comprehensive

framework for WRM financing to ensure a robust financing schemes

• Initiate efforts towards putting in place a monitoring system for WRM financing

Thank You

For the complete report, please visit: www.pwp.org.ph