ANNEX D

Draft WRC Bill as of 18 February 2019

Republic of the Philippines
Congress of the Philippines
Metro Manila

AN ACT RATIONALIZING THE ECONOMIC REGULATION OF WATER

UTILITIES, CREATING THE WATER REGULATORY COMMISSION AND FOR
OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:

CHAPTER 1 - GENERAL PROVISIONS

SEC. 1. Short Title. This Act shall be known as the “Water Regulatory Act of 2019”.

SEC. 2. Declaration of National Policy. – It is hereby declared the policy of the State to
recognize, protect, realize and enhance the right of all Filipinos to safe and clean drinking water
and sanitation as essential to the full enjoyment of life and all human rights.

In the pursuit of this Policy, this Act shall have the following objectives:

a) To prioritize and seek the immediate attainment of universal access to safe, adequate,
affordable and sustainable water supply and sanitation services for all Filipinos, and
adopt all necessary measures directed towards the realization of the human right to
water;

b) To accelerate the expansion, improvement and, ultimately, efficient provision of Level

III water supply systems and sanitation services for the entire country, in a manner
consistent with the protection, preservation and revival of the quality of the country’s
water resources;

c) To encourage and enable private sector participation in the continued growth and
development of water supply and septage management and sewerage facilities and
services;

d) To create a business and regulatory environment that is level, transparent and

conducive for public and private domestic and foreign investment in water supply and
sanitation services;

e) To provide incentives and/or support to encourage investments, and/or take all steps
necessary for the provision of affordable access to water supply and sanitation services
in unserved and underserved areas;

f) To ensure fair, just and reasonable tariffs, rates and charges for water supply and
sanitation services;

g) To protect the legal and other interests of consumers of water supply and sanitation
services rendered by public and private sector licensees;
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h) To establish an administrative process for economic regulation that is stable,

transparent and fair, giving due emphasis to technical, legal, environmental, economic
and financial considerations and with due regard to the observance of due process at all
times; and

i) To establish a strong and independent economic regulatory body to ensure consumer

protection, promote good business practice and competition among Service Providers
and full public accountability to achieve greater operational and economic efficiency.

SEC. 3. Definition of Terms. – As used under this Act, the following words or terms shall
have the following meaning:

a) “Bulk water suppliers” shall refer to any entity, natural or juridical, whether public or
private, supplying or intending to supply large quantities of raw or treated water to
buyers who will use it for own consumption, such as industrial companies, or for retail
distribution to consumers, such as Water Districts or subdivisions managing their own
distribution network

b) “Commission” shall mean the Water Regulatory Commission.

c) “Levels of water supply service” – consistent with the definitions provided under
NEDA Board Resolution No. 12 (Series of 1995) shall mean as follows:

Level I (point source) - a protected well or a developed spring with an outlet but
without a distribution system, generally adaptable for rural areas where the
houses are thinly scattered. A Level I facility normally serves an average of 15
households.

Level II (communal faucet system or standposts) - a system composed of a

source, a reservoir, a piped distribution network, and communal faucets.
Usually, one faucet serves 4 to 6 households. Generally suitable for rural and
urban fringe areas where houses are clustered densely to justify a simple piped
system.

Level III (waterworks system or individual house connections) - a system with a

source, a reservoir, a piped distribution network and household taps. It is
generally suited for densely populated urban areas.

c) “License” shall mean the Water Supply and/or Sanitation Services Operating License
that the Commission is authorized to grant and issue to Service Providers.

d) “Licensee” shall mean the Service Provider to whom a License is granted or issued by
the Commission.

e) “LWUA” shall mean the Local Water Utilities Administration created under
Presidential Decree No. 198, as amended.

f) “MWSS” shall mean the Metropolitan Waterworks and Sewerage System, created by
Republic Act (RA) 6234.
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g) “NWRB” shall mean the National Water Resources Board created by Presidential
Decree No. 424, as amended by Executive Order No. 124-A.

h) “PEZA” shall mean the Philippine Economic Zone Authority, created by RA 7916,
known as the “Special Economic Zone Act of 1995”.

i) “Regulatory Units” shall refer to the regulatory offices established under Section 5 of
this Act to issue Licenses authorizing the operation of Water Supply and Sanitation
Services; provide, review, determine, fix, and approve water and sewerage tariffs, rates
and charges that Licensees may impose; and exercise such other functions and powers
as may be provided hereunder.

j) “Sanitation” as used under this Act, refers only to sewerage and septage management.

k) “SBMA” shall mean the Subic Bay Metropolitan Authority, created by Section 13 of
RA 7227, known as the “Bases Conversion and Development Act of 1992”.

l) “Service Area” shall refer to the area covered by the water distribution system,
sewerage and septage management services.

k) “Service Provider” shall refer to any entity, natural or juridical, whether private or
public, providing or intending to provide levels II & III water supply, including bulk
water suppliers; sewerage; and/or septage treatment and disposal services for
domestic/residential, industrial or commercial use.

l) “Sewerage” shall refer to any system or network of pipelines, ditches, channels or

conduits including pumping stations, lift stations and force mains, service connections
including other constructions, devices or appliances appurtenant thereof, which
includes the collection, transport, pumping and treatment of water-borne human or
animal waste removed from residences, buildings, institutions, industrial and
commercial establishments to point of disposal.

m) “Septage” shall refer to sludge produced on individual onsite wastewater disposal

systems, principally septic tanks and cesspools.

n) “Septage Management” shall refer to the provision of proper collection, treatment and
disposal of septage.

o) “Tariffs” shall refer to such amounts which may be charged by Licensees of Water
Supply and/or Sanitation Services for their services based on principles, standards, and
guidelines established by the Commission.

p) “TIEZA” shall mean the Tourism Infrastructure and Enterprise Zone Authority, created
by RA 9593, known as the “Tourism Act of 2009”.

q) “Water District” shall refer to government-owned and controlled corporations

organized under Presidential Decree No. 198, as amended, created primarily to acquire,
install, operate, maintain and improve water supply and distribution systems for

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domestic, industrial and municipal uses of residents and to provide, maintain and
operate waste water collection, treatment and disposal facilities within the boundaries
of the district.

r) “Water Supply and/or Sanitation Service”- refers to any activity comprising of Levels
II and III water supply including suppliers to subdivisions and other Service Providers;
sewerage; and septage treatment and disposal services.

CHAPTER 2 - ORGANIZATION

SEC. 4. The Water Regulatory Commission. – There is hereby created and established an
independent, quasi-judicial regulatory body to be named the Water Regulatory Commission,
hereinafter referred to as the “Commission”, which shall be organized within one hundred
twenty (120) days after the effectivity of this Act.

The Commission shall be placed under the administrative supervision of the Department of
Environment and Natural Resources (DENR).

The Commission shall have a Board of Commissioners, and shall be vested with powers and
functions, as conferred and set forth hereunder.

SEC. 5. The Regulatory Units. – The Regulatory Units of the Commission shall be composed
of the Provincial Regulatory Units and the Central Regulatory Unit.

The Provincial Regulatory Units shall be established by the Commission in accordance with
such rules, regulations, guidelines and standards as the Commission shall issue, and as
provided hereunder.

Moreover, the pertinent regulatory divisions or units of MWSS, NWRB, LWUA, LLDA,
SBMA, PEZA, and TIEZA are hereby transferred to the Commission, and they shall
collectively comprise its Central Regulatory Unit for Water Supply and Sanitation Services
that: (a) provide services to more than one province; and (b) are owned, operated and/or
maintained by special economic zones and Metro Manila concessionaires.

SEC. 6. Powers and Functions of the Commission. – The overall authority and powers of
the Commission shall cover and apply to all Service Providers, whether private or public,
providing or intending to provide levels II & III water supply, including suppliers to
subdivisions and/or other Service Providers; sewerage; and/or septage treatment and disposal
services for domestic/residential, industrial or commercial use.

The Commission shall have the following powers and functions:

a) Issue and promulgate rules, regulations and guidelines as may be necessary to

implement and enforce its powers and functions under this Act;

b) Set and enforce just and reasonable technical standards, classifications and
measurements of service;

c) Appoint the central and provincial regulators;

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d) Establish rules and regulations to monitor, avoid and provide remedies for any market
power abuse or anti-competitive or discriminatory act or behavior by or against any
participant in the water supply and sanitation sector. Upon finding that a market
participant has engaged in, or fell victim to such act or behavior, the Commission shall
act to stop and/or redress the same. Such remedies may, without limitation, include the
imposition of price controls, issuance of injunctions, requirement of divestment or
disgorgement of excess profits, invalidation of contracts and imposition of fines and
penalties pursuant to this Act.

e) Adopt and require that books, records and accounts be kept and maintained in
accordance with the prescribed uniform accounting system;

f) Fix and determine proper and adequate rates of depreciation of properties and
equipment used in Water Supply and Sanitation Service/s;

g) Impose and collect annual levies determined as a percentage of gross revenue accruing
in relation to the licensed activities, and reasonable fees and surcharges as may be
necessary for achieving the purposes, powers and functions of the Commission;

h) Require the submission reports of finances and operations, verified under oaths by the
owner or president and secretary of the Licensee;

i) Determine and require the monitoring and submission of such data, statistics and other
information from the Regulatory Units and any or all licensees as may be necessary for
the effective and efficient exercise of its duties, functions, powers and responsibilities.

j) Investigate, motu propio or upon complaint in writing, any matter concerning the
operation of the service and require that service be provided in proper and suitable
manner;

k) Impose penalties and fines against any Licensee or against its owners, directors,
officers, agents or representatives for any violation of this Act or of the license, order,
rule regulation or requirement issued by the Commission;

l) Require any Licensee to pay the actual expenses incurred by the Commission in any
investigation if it shall be found that a Licensee violated any provision of this Act or of
the license, order, rule regulation or requirement issued by the Commission;

m)Advise, apprise and coordinate with other relevant agencies of the national or local
government on any matter relating to Water Supply and/or Sanitation Services;

n) Deputize agents, whether from the public or private sector, to assist in the
performance of any of the powers and functions of the Commission;

o) Upon appeal and after due hearing, appoint an interim or temporary management
committee to ensure continuity of service in cases a Licensee fails to meet conditions
of the license and the concerned Regulatory Unit fails or refuses to appoint an interim
management committee as provided in the following section.

p) Appoint, hire and maintain adequate staff and personnel, advisers, and/or consultants,
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with suitable qualifications and experience, as necessary;

q) Original and exclusive jurisdiction over all cases contesting rates, fees, fines and
penalties imposed by the Regulatory Units in the exercise of their powers, functions
and responsibilities, as set forth herein, and over all cases involving disputes between
and among participants or stakeholders in the Water Supply and/or Sanitation Services;
and

r) Such other incidental powers and functions as may be necessary to attain the
objectives of this Act.

SEC. 7. Powers and Functions of the Regulatory Units. – The Regulatory Units of the
Commission shall have the following powers and functions:

a) Issue Licenses authorizing the operation of Water Supply and/or Sanitation Services in
any specified area or areas within the Philippines.

b) Impose fines, charges and other penalties upon any Provider and/or its officers and
stockholders who shall fail or refuse to register and/or obtain a License prior to
operation or commencement of business, as provided hereunder.

c) Consistent with rules, guidelines, procedures and methodologies which the

Commission shall provide, review, determine, fix, and approve proposed water and
sewerage tariffs, rates and charges that Licensees may impose upon their
customers/consumers;

d) Appraise and value property and equipment used by Licensees in providing water
supply and sanitation service/s.

e) Enforce technical, financial and other performance standards set by the Commission
for licensees/utilities;

f) Respond to consumer complaints and ensure the adequate promotion of consumer

interests;

g) Investigate accidents directly or indirectly arising from or connected with the

maintenance or operation of the service, and make such order or recommendation as
the public interest may warrant;

h) Upon petition or motu propio where in its determination public interest so dictates,
require the review and/or approval of contracts or agreements that may impact on the
tariff and rates of service provision entered into by Service Providers;

i) Require the submission of reports, plans and other documents that set out the
performance targets of the licensees/utilities, and regular accomplishment reports;

j) Impose and collect annual levies determined as a percentage of gross revenue accruing
in relation to the licensed activities, and reasonable fees and surcharges as may be
necessary for achieving the purposes, powers and functions of the regulator;

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k) Conduct benchmarking and monitor the performance of licensees/utilities under their
jurisdiction, and publish reports detailing the results thereof, as may be necessary or
required by the Commission;

l) Amend, modify, suspend or revoke any License issued by them, after due notice and
hearing, on any of the following grounds:

i. when the facts and circumstances on the strength of which the license was issued
have been materially misrepresented or has materially changed;
ii. where the Licensee has failed to meet or comply with terms, conditions and
performance targets - including but not limited to service expansion - that may
have been set in the license;
iii. where the Licensee is found to be manifestly inefficient in the operation of or
provision of Water Supply and Sanitation services in its area; or
iv. when the holder thereof has violated or willfully refused to comply with any order,
rule or regulation of the Commission or any provision of this Act;

m)Appoint an interim management committee to ensure continuity of service in case a

licensee fails to meet conditions of the license; and

n) Submit performance plans and reports as required by the Commission.

SEC. 8. Composition. –

a) The Commission shall be a collegial body composed of five (5) full-time members
composed of a Chairperson and four (4) members, who shall all be appointed by the
President of the Philippines. All members of the Commission must be citizens and
residents of the Philippines, at least thirty five (35) years of age, and of good moral
character, recognized integrity and competence in the field of law, business,
commerce, finance, accounting or public administration, water or utility economics,
management, physical or engineering services, hydrology and other related services,
with at least three (3) years actual and distinguished experience in their respective
fields of expertise; Provided that out of the four members of the Commission, at least
one (1) shall be a member of the Philippine Bar with at least ten years of experience
in the active practice of law, and at least one (1) shall be a certified public accountant
with at least ten years of experience in active practice.

b) The term of office of each member of the Commission shall be seven (7) years;
Provided, however, that among the members first appointed, the Chairperson shall
serve for a period of seven (7) years, two (2) members shall serve for five (5) years
and the other two (2) members shall serve for three (3) years; Provided, further, that
any member whose term has expired as specified herein shall serve as such until his
successor shall have been appointed and qualified; Provided, moreover, that any
appointment to fill a vacancy in the Commission arising from death, removal,
retirement or resignation shall be made only for the unexpired term; and Provided,
finally, that in no case shall any member serve for more than seven (7) years in the
Commission.

c) The Commission shall meet as often as may be necessary on such day or days as the
Chairperson may fix. The presence of at least three (3) members of the Commission
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shall constitute a quorum, which shall be necessary for the transaction of any
business. The affirmative vote of majority of the members of the Commission where
a quorum is present shall be necessary for the adoption of any order, resolution,
decisions, or other act of the Commission in the exercise of its quasi-judicial
functions; Provided that in promulgating rules, regulations, guidelines and in the
exercise of its quasi-legislative functions, an affirmative vote of three (3) members
shall be required.

d) The Chairman of the Commission shall exercise general executive control and
supervision of the Commission and its members, staff and personnel, agents and
representatives.

Within three (3) months from the creation of the Commission and the appointment of
all Members of the Commission, the Chairman shall submit for the approval by the
President of the Philippines the new organizational structure and plantilla positions
necessary to carry out the powers and functions of the Commission, including those of
the Central and Provincial Regulatory Units.

The staff and personnel positions of the Commission shall be filled by regular
appointments in accordance with a staffing plan to be prepared by the Commission.

e) Members of the Commission shall enjoy security of tenure and shall not be suspended
or removed from office except for just cause as specified by law.

f) The Chairman and members of the Commission or any of their relatives within the
fourth civil degree of consanguinity or affinity, legitimate or common law, shall be
prohibited from holding any interest whatsoever, either as investor, stockholder,
officer or director, in any company or entity engaged in provision of water supply and
distribution, septage management and sewerage services and must, therefore, divest
through sale or legal disposition of any and all interests in the water sector upon
assumption of office.

SEC. 9. Commission Secretariat

The Commission shall establish a Secretariat which shall provide the Commission with
technical and other support including, among others:

a) Providing the necessary technical inputs and secretariat support to the Commission to
facilitate the conduct of its functions;

b) Coordinating with Regulatory Units to ensure proper implementation of the rules,

regulations and guidelines promulgated by the Commission;

c) Monitoring and assessing activities of the Regulatory Units vis-à-vis their respective
annual performance plans and targets;

d) Maintaining a database on the water supply and sanitation subsector; and

e) Coordinating with other relevant agencies of the national or local government on any
matter relating to water supply and sanitation.
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SEC. 10. Executive Director. –

The Commission shall also appoint an Executive Director who shall head the Commission
Secretariat, keep and maintain the official record and report of the proceedings of the
Commission, and have the authority to administer oaths in all matters falling within the
jurisdiction of the Commission.

The Executive Director shall be responsible for the effective implementation of the policies,
plans, programs, rules, regulations and directives of the Commission; coordinate and supervise
the activities of the different operating units under the Commission; and perform such
functions as may be assigned by the Chairperson and/or other members of the Commission.

SEC. 11. Compensation and Other Emoluments. –

The compensation of the members of the Commission and its staff shall be exempt from the
coverage of Republic Act. No. 6758, otherwise known as the “Salary Standardization Act.”
Provided, that the salaries of the Commission and its staff shall conform as closely as possible
to the principles of R.A. 6758.

For this purpose, the schedule of compensation of the Commission and its Regulatory Units
and staff shall be submitted for approval of the President of the Philippines. The
compensation schedule of the Commission and its Regulatory Units and staff shall be
implemented within six (6) months from the effectivity of this Act and maybe upgraded by
the President of the Philippines as the need arises: Provided further, that in no case shall the
compensation of the Commission and its staff be upgraded more than once a year.

Pertinent civil service laws, rules and regulations of the Philippines shall be applicable to the
Commission.

The Chairman and members of the Commission shall initially be entitled to the same salaries,
allowances and benefits as those of the Presiding Justice and Associate Justices of the Supreme
Court, respectively.

CHAPTER 3 - REGISTRATION AND LICENSING

SEC. 12. Registration and Licensing of All Water Supply and/or Sanitation Services –

All Water Supply and/or Sanitation Service Providers, including Bulk Water Suppliers and
those providing services to subdivisions and/or other Service Providers, shall register with
the Commission and, subject to such rules, guidelines, procedures and other issuances as the
Commission may issue, obtain a License to operate from the appropriate Regulatory Units.

The Commission shall also ensure that the granting and revocation of licenses are carried out
fairly, transparently, and without discrimination. Its issuances shall therefore specify, among
others, the qualifications, requirements and procedure for the granting and revocation of
Licenses, as well as the standards and performance targets that must continuously be
complied with in order to keep such licenses valid.
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Unless otherwise provided herein or by the Commission, no public Water Supply and/or
Sanitation Service provider shall commence or conduct the business of providing water supply
and sanitation services without first obtaining a license.

Concession agreements and other contracts for water supply provision currently existing shall
remain valid and in force, unless otherwise invalidated by the Commission where public
interest so dictates, after due notice and hearing.

SEC 13. Conditions of License. –

The Commission and/or the concerned Regulatory Unit, may impose such conditions in the
issued License, as it may deem necessary, such as but not limited to:

a) Tariffs, rates and charges that may be imposed from its customers/consumers.
b) Term fixing the duration of the privilege.
c) Grounds for modification, suspension or cancellation of the License.
d) Minimum technical performance and service level standards.
e) Expansion targets and service level improvements over time.
f) Restrictions or conditions for transferability of the business or controlling interest in
the business.
g) Reportorial requirements and obligations of the grantee.
h) Submission to annual performance audit by the Commission or its duly authorized
representative(s).

The Commission shall specify the requirements and procedure for existing holders of
Certificate of Public Convenience/Certificates of Public Convenience and Necessity issued
by NWRB, and/or Conformance issued by LWUA, to convert their existing certificates into
Licenses issued by the Commission.

All existing providers of Water Supply and/or Sanitation Services without a legal and valid
Certificate of Public Convenience/Certificate of Public Convenience and Necessity or
Certificate of Conformance shall register with the Commission and apply for a License
within six (6) months from the effectivity of this Act.

SEC. 14. Rights and Duties of Licensees. –

a) Any person granted a License under this Act shall have the obligation to ensure that its
licensed activities are conducted so as to further the public interest and, in particular,
that they:

i. foster the maintenance and development of efficient, coordinated, and viable

operation of their licensed activities;

ii. ensure that their Water Supply and/or Sanitation Services are provided in a
diligent, conscientious and workmanlike manner, in accordance with
applicable laws and the standards and practices set by the Commission and
generally accepted in the water supply and sanitation industry;

iii. comply with drinking water quality requirements and other requirements and
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standards that may be set by the Commission; and

iv. not abandon its service without notice to and approval by the Commission.

b) Any person granted a License under this Act shall, to the extent allowed by law and
specified in the License, have the right to acquire or lease land and lay or repair water
or sanitation mains and other relevant facilities in public ways, when required to fulfill
their obligations.

c) Subject to any condition or limitation laid down in the License, a Licensee may
disconnect the supply of Water Supply and/or Sanitation services to a customer if
such customer defaults in the payment of amount(s) due to that Licensee in respect of
water supplied or sanitation services provided, or for acts of pilferage pursuant to
Sections 8, 9, 10, and 11 of Republic Act No. 8041, otherwise known as the "Water
Crisis Act of 1995."

d) Any License issued under this Act shall contain provisions designed to ensure that
Licensees:

i. Publish the Tariff and other charges approved by the Commission, and other
terms and conditions imposed by the Commission for the provision of Water
Supply and/or Sanitation Services.

ii. Prepare, within three (3) months from the issuance of a License, in
consultation with its customers, a customer service code specifying the
manner and procedure for: (a) metering, billing, and collection of the
Licensee’s approved tariff and other charges, (b) disconnection or suspension
of service in case of non-payment of tariffs and/or other charges, or acts of
pilferage, and (c) recommendation and recovery of arrears in tariffs and other
charges; and

iii. Maintain financial accounts in accordance with the manner and procedure
specified in the License and as may be required by the Commission.

iv. Maintain and upon request by anyone during regular office hours, promptly
make available for scrutiny and inspection such data, statistics and other
information, as may be required by the Commission.

SEC. 15. Setting Tariffs, Rates and Other Charges. –

Regulatory Units shall establish tariffs, rates and other charges which are fair and reasonable
and which provide for the economic viability of the service and a fair return on their
investments considering the prevailing cost of capital in the domestic and international markets.

Such tariffs, rates and charges shall be based on and consistent with a rate-setting methodology
that the Commission shall, after due consultation, define and publish, taking into account the
following, among others:

a) reasonable and prudent capital and recurrent costs of providing the service including a
reasonable rate of return on capital;
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b) efficiency of the service;
c) incentives for enhancement of efficiency;
d) willingness to pay of the customers/consumers;
e) equity considerations; and
f) administrative simplicity.

Tariffs, rates and charges set by the Regulatory Units shall be presumed valid and reasonable
unless a protest or contest is filed with the Commission.

SEC. 16. Promotion of Innovative Schemes to Improve Efficiency and Management of

Systems. –

The Commission shall promote innovative schemes, including but not limited to the
consolidation and/or integration of Water Supply and/or Sanitation Services and/or Providers
in the same Service Area, where it will result in improved efficiency, services expansion
and/or lowering of costs.

To this end, the Commission shall establish and issue such rules and guidelines as may be
necessary to (a) create incentives to encourage efficiency and service expansion; (b) establish
the standards and targets that service providers are required to meet; and (c) set the fines and
penalties that would be imposed for failure to meet such standards and targets.

CHAPTER 4 - QUASI-JUDICIAL FUNCTIONS OF THE COMMISSION

SEC. 17. Proceedings Before the Commission. –

For the purpose of any investigation, inquiry or proceeding, the Commission shall have the
requisite power to:

a) Issue subpoena duces tecum and subpoena ad testificandum;

b) Appoint hearing officers to hear and receive evidence on behalf of the Commission;
c) Cite any person or party for contempt for refusal to appear, testify or comply with an
order of the Commission on any matter that is the subject of investigation, inquiry or
proceeding before the Commission.

SEC. 18. Orders and Decisions of the Commission. –

The orders, resolutions and decisions of the Commission, which must be reached as promptly
and expeditiously as reasonably and fairly possible, shall be in writing and shall state clearly
and distinctly the facts and law on which it is based.

The Commission shall publish and make available for public inspection all decisions and
final orders in the adjudication of contested cases or applications.

SEC. 19. Appeals Procedure and Prohibition Against Injunction. –

a) The orders, rulings, and decisions of the Commission are final and executory unless
appealed to the Court of Appeals within fifteen (15) days from receipt of notice of such
order, ruling or decision; Provided that orders, rulings, and decisions of the
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Commission approving tariffs shall be immediately executory and may be suspended
only upon appeal and filing of a bond, in an amount to be fixed by the Commission,
to answer for damages occasioned by the suspension or stay of execution of such
orders, rulings, and decisions.

b) No injunction may be issued by any court or administrative agency to restrain any

proceeding before, or the implementation or execution of any order, ruling, or
decision of the Commission, except on the basis of a question of law brought before
the Supreme Court on certiorari.

c) Subject to Sec. 7, paragraph 3 of this Act, an act or decision of the Commission shall
not be invalid merely because of a defect or irregularity in, or in connection with, the
appointment or vacancy in the Office of the Chairperson or any other member of the
Commission.

CHAPTER 5 - TRANSITORY PROVISIONS

SEC. 20. Interface with Other Sector Regulators. –

a) The DENR shall continue to have the primary authority and responsibility for
protecting the environment and the quality water sources from waste and pollution and
shall promulgate rules, regulations, and standards in this regard.

b) The Department of Health (DOH) shall have primary authority and responsibility for
determining and enforcing drinking water quality and sanitation standards. The
Commission shall coordinate with the DOH in this regard, and shall ensure the
consistency of the standards and targets that it will set for compliance by licensees with
the DOH’s mandated standards.

c) The Commission shall coordinate with the NWRB for water allocation and data
collection, the local government units for development projects relating to water supply
and sanitation, and the Department of Public Works and Highways for flood control
and the harnessing and impounding of water.

SEC. 21. Transfer of Rights and Obligations. –

The Commission shall, by virtue of this Act, be subrogated to all the rights, and assume all the
obligations, of the Water Utilities Division of the NWRB, the Regulatory Offices of MWSS
and LWUA, the Regulatory Units of all special economic zones, and all other government
agencies and units whose powers and functions have been transferred to the Commission.

The transfer of powers and functions in the Department and agencies attached thereto, as herein
provided for, shall take effect within six (6) months after the effectivity of this Act. The
foregoing transfer of powers and functions shall include all applicable funds, personnel,
records, property and equipment, as may be necessary. The same shall apply to agencies which
have been attached to the Department by virtue of this Act.

As such, all offices under the Department and all attached agencies affected by the provisions
of this Act shall continue to function under their present mandates until transition is effected
as provided for under this Act.
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The heads of the agencies shall continue to serve until replaced as provided for under this Act.
All rights and obligations of the said government agencies are hereby transferred to and
assumed by the Commission and shall be acted upon in accordance with the rules and
regulations of the Commission on Audit and other pertinent laws, rules, and regulations.

SEC. 22. Separation form Service. –

Employees separated from government service as a result of this Act shall be entitled to the
benefits which they may receive under existing laws, rules and regulations.

SEC. 23. Funding. –

The sum of Three Hundred Million (P 300,000,000.00) pesos shall be set aside from any
available funds of the National Treasury, and is hereby appropriated and authorized to be
released, for the organization of the Commission and its initial operations.

Thereafter, funds sufficient to fully carry out the objectives, powers, and functions of the
Commission and its Regulatory Units shall be appropriated every fiscal year in the General
Appropriations Act, in an amount that shall not be less than the amount appropriated for it the
previous year.

The Commission shall submit its annual budget, which shall include, among others, detailed
information on the compensation and benefits received by their employees, to the DENR for
approval.

Moreover, subject to existing rules and regulations of the Department of Budget and
Management (DBM), all funds and monies collected by the Commission from fees, charges,
surcharges and penalties, which the Commission may impose and collect under this Act, shall
accrue directly and automatically to the Commission and shall be utilized solely for its
operations. The guidelines for the collection and disbursement of these proceeds shall be
defined in the implementing rules and regulations of this Act.

A proportion of the abovementioned amounts shall be used for training and capacity building
purposes, including the upgrade and procurement of equipment and software as may be
necessary for the efficient and effective exercise of its powers. Such upgrades and
procurements shall comply with the requirements of existing laws on procurement, accounting
and auditing rules and regulations.

The amount of funds and monies collected, and the costs and purposes for which such were
expended shall be made publicly available upon request, as well as on an official website that
the Commission shall establish.

SEC. 24. Separability Clause. –

In the event that any provision of this Act is declared unconstitutional, invalid, or illegal, the
constitutionality, validity, or legality of the remainder of the provisions of this Act shall not be
affected thereby.

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SEC. 25. Repealing Clause. -

The provision with respect to fixing of water rates and sanitation service fees of Section 3 (h)
and Section 12, and regulation of waterworks and deep wells of Section 3 (n), regulation of
waterworks and sanitation systems in privately owned subdivisions of Section 3 (p) of
Republic Act 6234, as amended, is hereby repealed or modified accordingly.

Section 62 on regulation and Section 63 on rate review of Presidential Decree 198, as

amended by LOI 700 (1978), LOI 744 (1978), EO 124 (1987), EO 123 (2002), is hereby
repealed or modified accordingly.

The provisions of the Local Government Code and its Implementing Rules and Regulations
of Republic Act No. 7160 which allow local government units to fix the rates of water
utilities owned, operated and maintained by them within their jurisdiction is hereby repealed
or modified accordingly.

Section 13 (b) on regulation of enterprises in ECOZONE of Republic Act No. 7916 as

amended, also known as the Special Economic Zone Act of 1995, is hereby repealed or
modified accordingly.

“Provisions under Section 69 of Republic Act No. 9593 or the Tourism Act of 2009 and its
Implementing Rules and Regulations which mandates the Tourism Infrastructure and
Enterprise Zone Authority to grant franchises, supervise the operation of public utilities, and
register, monitor and regulate enterprises within Tourism Enterprise Zones, are hereby repealed
or modified accordingly.”

Commonwealth Act No. 146, as amended, otherwise known as the “Public Service Act,”
and all laws, decrees, rules and regulations, or portion thereof, inconsistent with this Act are
hereby repealed or modified accordingly.

All other laws, decrees, rules and regulations and executive orders that are contrary to or
inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 26. Effectivity Clause. –

This Act shall take effect fifteen (15) days following the completion of its publication in a
national newspaper of general circulation.

Approved,…

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