Manila: The Local Water Utilities Administration (LWUA) has expressed openness to waiving certain lender rights to allow local government units (LGUs) and government banks to assist financially distressed water districts, as the Public-Private Partnership (PPP) Center is ready to review the legality of questioned joint venture agreements (JVAs) entered into by some districts with private firms.
According to Philippines News Agency, these developments came during a Senate Committee on Public Services hearing, which is conducting an inquiry into reported service disruptions, alleged onerous contracts, and transition issues involving several local water districts and private concessionaires. During the hearing, Senator Risa Hontiveros pressed LWUA and the PPP Center on available legal and financial remedies, particularly for districts seeking to terminate or restructure their JVAs.
LWUA Administrator Jose Moises Salonga stated that the agency is willing to issue waivers to facilitate alternative financing arrangements. "Yes ma'am, I'm willing to sign waivers off to Water Districts o 'yung mag-fi-finance sa kanila (or those who will finance them)," Salonga said. He explained that one recurring issue in water district financing is the absence of 'step-in rights' for lenders in case of default, since water districts are non-stock entities.
Salonga proposed that LandBank and DBP co-lend with LWUA, as LWUA's interest rate is low, which could be averaged, allowing LWUA to have the step-in rights. On the legal front, PPP Center Director Lester A±onuevo mentioned that the agency can examine whether certain JVAs are void ab initio or ultra vires. He noted, however, that oversight efforts have been hampered by incomplete disclosures from concerned parties.
Senator Hontiveros emphasized the need for clearer legal review and structured transition mechanisms, particularly where termination payments and asset valuation are involved. Senator Tulfo highlighted structural gaps in water governance and reiterated his proposal to create a Department of Water Resources (DWR) to unify oversight. "The creation of the DWR finally gives us one captain steering the ship. One master plan, one monitoring body, and a bureau focused on flood control. The plan is clear, the responsibility is clear," Tulfo said.
The panel is expected to continue its inquiry in the next hearing as lawmakers weigh possible legislative reforms in water sector regulation and oversight.
