Privatization of the Metropolitan Waterworks and Sewerage System (MWSS)

The Metropolitan Waterworks and Sewerage System (MWSS) holds the distinction of being one of the oldest and most formidable government organizations in the Philippines. Its roots were traced to the first water system laid out in old Manila in 1878 from funds donated by Spanish philanthropist Francisco Carriedo y Peredo.

The construction of a water system in 1878 delivered 16 million liters of water per day (MLD) to 300,000 people. Its main objective was to improve the people’s health and living conditions through clean drinking water.

The Carriedo System had evolved from the Manila Water Supply System in 1908 to Metropolitan Water District in 1919. Thirty-five years later, it became the National Waterworks and Sewerage Authority (NAWASA).

The government changed its nomenclature again in 1971 to Metropolitan Waterworks and Sewerage System (MWSS), by which it is known to this date. From a national agency, attending to water needs of the entire Philippines, the MWSS by virtue of its Charter was tasked to provide water to Metro Manila and environs.

The MWSS, in spite of all its efforts, through the years has hardly satisfied the needs of the consuming public. Manifestations of which was the increasing demand for better water services across the sub-sectors. This dilemma basically paved the way for the government to introduce urgent and significant measures for conservation of the water resources and improve the management of the water industry.

Many laws were promulgated for the purpose of addressing the water crisis. However, the most significant and related to the operation of the water utilities, among others, was the National Water Crisis Act of 1995 (RA #8041). This law states the need for the government to adopt urgent and effective measures to address the nationwide water crisis which adversely affects the health and well being of the population, food production and industrialization process.

These was followed by the enactment of Executive Order No. 286 which affected the reorganization of the MWSS and Local Water Utilities Administration (LWUA) to enable these agencies to become more effective, efficient and responsive to the country’s needs for potable water.

In March 1996, Executive Order No. 311 was implemented. This policy encouraged the private sector’s participation in the operation and facilities of MWSS.

As a result of these numerous adjustments, the MWSS – on its 120th years of continued service to the people- was privatized. This bold move was aimed at improving the water delivery service.

The responsibility to operate and improve waterworks system was passed on to the two private consortia in conformity to the Concession Agreement. This contractual agreement was entered into by the Republic of the Philippines through the MWSS, the Maynilad Water Services Inc. (MWSI) for the West Zone and the Manila Water Company, Inc. (MWCI) for the East Zone.

The MWSS Regulatory Office

The Metropolitan Waterworks and Sewerage System Regulatory Office (MWSS RO) was created in August 1997 by virtue of the Concession Agreements signed between the MWSS and the two Concessionaires: Manila Water Company, Inc. (Manila Water) for the East Zone and Maynilad Water Services, Inc. (Maynilad) for the West Zone. On 31 March and 18 May 2021, the Revised Concession Agreements (RCAs) with Manila Water and Maynilad were signed respectively. The RCAs extended the period of the water concession to 31 July 2037.

The MWSS RO functions as a collegial body composed of five (5) Regulators. It is headed by the Chief Regulator who has overall responsibility for the operation of the office, and four (4) Deputy Administrators for Technical Regulation, Customer Service Regulation, Financial Regulation, and Administration and Legal Affairs.

Any action or decision by the MWSS RO on substantive matters affecting the RCA requires at least a majority vote of three (3) members. The Chief Regulator chairs meetings,  has the final approval over the hiring and dismissal of all professional staff, and acts as the principal spokesperson of the MWSS RO.

The MWSS RO is mandated to monitor the performance of the Concessionaires with respect to their contractual obligations under the RCAs. Among its many functions, the MWSS RO reviews, monitors and enforces rates and service standards; arranges and reports regular independent audits of the performance of the Concessionaires; and monitors the infrastructure assets. 

The functions of the MWSS RO are further stated in Executive Order (EO) No. 149, S. 2021 (signed by President Rodrigo Roa Duterte on 27 September 2021), which transfers the administrative supervision of the  Metropolitan Waterworks and Sewerage System from the Department of Public Works and Highways to the Office of the President; and in Republic Act Nos. 11601 and 11600 (signed by President Duterte on December 10, 2021), which grant Manila Water and Maynilad 25-year franchises to establish, operate, and maintain a waterworks system and sewerage and sanitation services in the East and West Concession Areas, respectively.

The functions of the MWSS RO may change over time for the effective regulation of water and sewerage services.