MWSS Annual Report 2017 PDF

INTRODUCTION
When the new Administrator assumed office in 2017, the Metropolitan

Waterworks and Sewerage System Corporate Office set its sights on
propelling its infrastructure projects at full speed aligned with the
Build, Build, Build project of the Duterte administration. Interestingly,
this is also closely related to the sustenance program of the Water
Legacy Plan, an initiative of the previous MWSS Administrator under
the precept that MWSS should be the guardian of water security in
Metro Manila and its adjacent cities/municipalities under its service
area.
This Annual Report talks about the progress of MWSS’ long-term

water source infrastructure projects, environmental programs
for sustainable watershed management and sanitation, disaster
management, monitoring of the concessionaires’ performance,
gradual restructuring of the organization, involvement in expanding
new partnerships and development of the Information Systems Plan.
All of these MWSS involvements synthesize MWSS’ contributions in
helping achieve the objective of advancing the right of every Filipino
to continuous and safe, potable water.
The Annual Report hopes to give the reader an objective and clearer
picture of the agency’s capability for growth and how the challenges
are continuously being addressed and faced and the resilient
endeavors of the employees to provide good service to MWSS’
constituents.
ANNUAL REPORT 2017 1

2 METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM
HISTORY
On 19 June 1971, Republic Act 6234 was enacted. It dissolved
the National Waterworks and Sewerage System (NAWASA) and
created in its place the Metropolitan Waterworks and Sewerage
System (MWSS). MWSS was thus given the mandate to ensure
an uninterrupted and adequate supply and distribution of
potable water at just and equitable rates in its service area in
Metro Manila, the province of Rizal and adjoining cities and
municipalities in Cavite province. The proper operation and
maintenance of sewerage systems is likewise part of its mandate.
As a result of the National water Crisis Act of 1995 in 1997, the

operation of MWSS was privatized through public bidding after
government realized that the private sector is better equipped and
suited to continue its operations given the conditions prevailing
during that time. Manila Water Corporation, Inc. or MWCI and
Maynilad Water Services Inc., or MWSI, separately won the bid for
their respective service areas for an initial 25-year concession period
which was later extended to another 15 years.
MISSION
For Metro Manila and adjacent towns:
• Protect, secure, optimize and expand our water sources,
watersheds and infrastructure
• Provide equitable access to clean, potable and affordable water
• Aggressively increase the coverage of the sewerage disposal system
• Ensure prudence and efficiency in the implementation of all
our plans, including those we accomplish through our agent
concessionaires, and in doing so, deliver affordable water tariffs
that will support the long term water security program for Metro
Manila and all covered areas
VISION • A world-class agency admired for its water security legacy in a

technically competent infrastructure
CORE
SQuIRT
Service Excellence
VALUES
Quality
Integrity
Results-OrientationTransparency

TABLE OF CONTENTS
2 History, Mission and

Vision Statement p3
3a 3b
Message from Message
Chairman from the
Demonteverde Administrator
1 Introduction p1 p6 p7
5 New MWSS Board of Trustees 6 The MWSS Raw Water Conveyance System
4 New Administrator’s Profile p8 p10 p14

7 The Water Legacy 8 9 The MWSS Raw Water Conveyance System
a. Angat Dam and Dyke Strengthening Project (ADDSP)

b. Bulacan Bulk Water Supply Project
c. Rehabilitation of AHEPP
d. New Centennial Water Supply Project
p15 Water Security Roadmap
p16 e. Sumag River Diversion Project
p17

10 Water Distribution Efficiency
a. Angat Water Transmission Improvement
b. Rehabilitation of UATP facilities p24
11 Sewerage and Sanitation 14 Partnership Development
p49
a. Preparations for 2018 Carriedo
Cup Sportsfest
b. MWSS’ Preparation for“The Big One”
c. Launching of A Million Tree
Challenge and Tree Planting
13 Organizational Excellence Activities at Ipo Dam Watershed
d. MWSS signs MOA with General
a. Implementation of MWSS’ Nakar, Quezon for the protection
Reorganization of General Nakar Watersheds
b. Overview of the New MWSS e. MWSS took part in CSC’s Benefit
p27 Organizational Structure
c. MWSS’ Bulacan Water Project
Run 2017
gets Nomination to 2017 Global 15 Communication and

Knowledge Management
12 Water Rates and Review Rationalization Water Awards (from MWSS’
a. MWSS Coordination with the
website) Local Government for the NCWSP
d. Execution of ISSP Project b. Prelude to MWSS’ Coffee Table
e. 2017 MWSS Performance Book
c. MWSS Institutional Video’s
Targets Fully Met
groundwork p55
p31 p41 16 Financial Report p59

MESSAGE FROM
CHAIRMAN DEMONTEVERDE
Many have lived without love but not one
without water.
As the newly appointed Chairman of the
Board of Trustees for Metropolitan Waterworks and
Sewerage System, I am honored and challenged to
become part of this water institution. Water is one
of the basic necessities that humanity needs, and its
provision is a great responsibility that would need
watchful and prudent decision-making.
With this, the way to go is to deliver and think
of innovative ways to help the people of Metro Manila
in terms of taking care of our water and environment. I
know it has always been a big struggle compromising
development on the one hand, and environment and
low tariff on the other but the process has to go on
and there has got to be a decision to make in every
step of the way. We will be guided by prudence and
analytical bases meant to benefit the majority in the
long haul in our decision-making.
We are joining President Duterte’s call for
action on his Build, Build, Build program which is
dedicated to the proposition that an unwavering
resolve must be taken for a meticulous but swift
delivery of our infrastructure projects on water replete
with proper preparedness for disaster resiliency.
I am hopeful that with the cooperation of
our concessionaires Maynilad and Manila Water, we
would attain and maintain our goal of providing safe
drinking water to the whole of Metro Manila and
sustain water for our future generations.
Franklin J. Demonteverde
CHAIRMAN, MWSS

MESSAGE FROM THE ADMINISTRATOR
I am privileged to lead MWSS as it ushers in its its operations, MWSS embarked on the ISSP Project.
rebirth as a water agency. MWSS is pursuing programs MWSS has fully met its 2017 performance targets.
and policies to provide our clients with affordable and In celebration of its 140th anniversary, MWSS
safe water thus ensuring water security based on what was gifted with a new modern gymnasium and
is fair and just to all. cafeteria by Manila Water and Maynilad. Likewise,
These policies and programs are geared MWSS successfully launched the coffee table book
towards the development of new water source projects; “From Carriedo to Balara: Celebrating 140 Years of
sustainable environmental and watershed protection; MWSS and Ensuring Water Security” and organized the
transforming MWSS into a Water Eco Tourism Park and Carriedo Cup Sportsfest which we will institutionalize
a Center for Learning for Water Research, Training and as an annual activity for the agency and its partners
Development; creating a professional and energized within the MWSS compound.
workforce to serve the people; and, promoting and Collaboration with concessionaires were
enhancing the value of shared responsibility and strengthened on disaster preparedness and
commitment with our concessionaires and partners management. Manila Water and Maynilad have their
in service –Manila Water, Maynilad Water Services and respective Disaster Preparedness and Contingency
Luzon Clean Water Development Corporation. Management Plans in the event a major disaster strikes
MWSS is continuing the water legacy projects like a 7.2 earthquake.
of the preceding Administration whose completion Recognizing the importance of watersheds
will greatly impact on the consumers. These include in supporting the water supply of Metro Manila and
the Kaliwa Dam project and the Bulacan Bulk Water adjoining provinces, MWSS launched the Annual
Supply Project, among others. Million Tree Challenge, a reforestation project to
Under my leadership, we have charted a new benefit the six critical watersheds. On its maiden year,
water security roadmap that will ensure adequate safe the AMTC has surpassed its one million planted trees
and potable water not only during the incumbency target in 2017. A total of 1.2 million trees were planted
of President Rodrigo Roa Duterte but for the next 25, in various watershed areas through the collaborative
even 50 years hence. efforts of participating government agencies and
The ongoing water resources and infrastructure civic organizations.MWSS also inked a Memorandum
development projects include aside from the Kaliwa of Agreement with the local government of General
Dam Project and Bulacan Bulk Water Supply Project, the Nakar in Quezon for the protection of the General
rehabilitation of AHEPP, and the Sumag River Diversion Nakar Watershed.
Project. As we MWSS carry out our mandate of
To further improve water distribution efficiency, ensuring adequate supply and distribution of potable
MWSS is undertaking the Angat Water Transmission water for all and the proper operation and maintenance
Improvement and rehabilitating the UATP facilities. of sewerage systems in our service area, we are aware
I am happy to report that in the area of that much more needs to be done. We need the
sewerage and sanitation, MWSS concessionaires are cooperation of every one to attain the sustainable
committed to fulfill their mandates. Investments for development goal of clean water and sanitation for all.
waste water facilities and management have been
increased. Corollary to this is the need for a water rate
rebasing and review rationalization.
When I took my oath as MWSS Administrator,
one of my priorities was to transform MWSS into an
organization at par with those in the private sector.
MWSS immediately implemented a reorganization PDDG Reynaldo V. Velasco (Ret.)
to make the agency more cost efficient. To improve Administrator, MWSS

NEW ADMINISTRATOR’S PROFILE
At first glance, here is a man that exudes stiffness and
toughness perhaps brought about by his military
upbringing. But once you get introduced to the man
and get to know him better, one cannot help but
respect the character that he is.
PDDG Reynaldo V. Velasco likes to throw deadpan

jokes but when it’s time to work, he is dead serious
about what he wants done. This dedication to work
emerged when he was still at his younger age.
He graduated Valedictorian at Santa Barbara High
School in Pangasinan (1965) and graduated from the
stellar PMA class in 1971 which later gave him the
prestigious Cavalier Award in 2002 and 2016. He has
a long list of awards and citations. His experience in
tactical operations, was one reason he was sent to
war-torn Mindanao in 1973 where bravery became
his ally. He has led platoons and regional commands
in Luzon, Visayas and Mindanao and two of the
highlights of his career in the PNP were to secure
the former US President George Bush and, at another He officially assumed office in MWSS on February
time, Pope John Paul II during their respective visits to 26, 2017. As the new MWSS Administrator, he
the Philippines. During his stint as NCRPO Director, he immediately set the tone of his governance policy
was able to significantly reduce carnapping and bank and that is to work closely and harmoniously, but
robberies in Metro Manila. within the framework of the Concession Agreement,
with MWSS’ concessionaires and partner agencies in
After long years of service in law enforcement, he providing safe and affordable water, protecting the
retired in 2005 and pursued his passion in farming and environment. This early he is establishing himself as a
agriculture. However, two years later, he yielded to a champion of the working class as he is also instituting
greater calling, and that was to benefit his hometown fiscal reforms that are set to benefit not only the office
of Santa Barbara - he ran and won for mayoral position but also the employees of MWSS.
in Sta. Barbara, Pangasinan. During his three-year
term, he focused on campaigning against corruption, Administrator Velasco was born on May 21, 1949 and
providing education, establishing a multi-million is married to Ma. Fatima Carranceja of Bulacan. He has
flood control project and irrigation. After his stint as a Masteral Degree in Business Administration from
mayor, little did he know that after finishing his term the University of St. La Salle, Bacolod City (1992-1996)
and living as an ordinary citizen for 7 more years, he and later held a Doctorate of Philosophy, Peace and
was again called to government service, this time as Security Administration from Legaspi City (2003). He
the new Administrator of the MWSS. has one son, Ricardo Velasco and two grandchildren.

BOARD OF TRUSTEES
Atty. Franklin J. Demonteverde – Appointed as MWSS’
Chairman of the Board of Trustees, he graduated from University
Of Negros Occidental - Recoletos in Bacolod City where he gained
his Bachelor of Laws. Prior to this, he finished a degree in Business
Administration from the University of the East Manila, took his secondary
education from Notre Dame Cotabato and primary education from
Ateneo de Davao. He was admitted to the practice of Law in 1980 and
since then, he has assumed prestigious positions - to name a few, were
President of Philippine Judges Association (2011-2013), President of
Negros Occidental RTC Judges Association (2007-2011), President of
Integrated Bar of the Philippines Negros Occidental Chapter (2001-2003),
Grand Master of Masons (1999-2000) and Past Director for Australia and
Asia, Y’m Men International (1986-1987).
He was also given recognition jointly by the Supreme Court,
Philippine Judicial Academy, Alternative Law Groups, National Judicial
Institute and Canadian International Development Agency for his
Franklin J. Demonteverde contribution to the Justice Reform Initiatives Support as Trainer,
CHAIRMAN Facilitator and Champion of Judicial Dispute Resolution. In his early
years, he represented Cotabato province in the Mindanao Regional
Contest of the Voice of Democracy and was an entrance scholar in the
University of the Philippines in 1960.
PDDG Reynaldo Vicente Velasco (ret) – The newly selected

MWSS’Vice Chairman Board of Trustees and the appointed Administrator
by President Rodrigo Duterte finished his Doctorate degree of Peace
and Security Administration in Bicol University in 2003. He also holds
a Masteral degree in Business Administration from the University of St.
La Salle in Bacolod City (1992-1996). He got his college degree from
Philippine Military Academy, Baguio City, Class of 1971. Prior to that,
he earned two years of study in BS Chemical Engineering from Mapua
Institute of Technology Manila (1965-1967) before transferring to PMA.
He graduated as Class Valedictorian from Sta. Barbara High School in
Pangasinan.
These achievements did not stop him from attaining more, as
his long list of citations will suggest - to name a few were former Mayor
of Santa Barbara, Pangasinan; Deputy Chief PNP for Administration;
Regional Director(NCRPO), Regional Office I, Pangasinan-Ilocos Region;
Regional Director, Autonomous Region of Muslim Mindanao (ARMM);
PDDG Reynaldo V. Velasco (Ret) 1st Battalion Commander of the Philippine Constabulary Special Action
ADMINISTRATOR Force (PC-SAF). He also received the Presidential Legion of Honors
Award, Medalya ng Kagitingan, Medalya ng Pambihirang Paglilingkod
and Medalya ng Katangitanging Gawa to name a few.

Atty. Mariano Cabuncal Alegarbes – Born in
Carcar, Cebu, he finished his high school degree from
Carcar Academy in 1968, after which, he graduated
college from Glan School of Arts and Trades, Sarangani
in 1982 then obtained his Bachelor of Laws with honors
in 1990 from University of Mindanao. In 2012, he took
Master of Arts in Educational Management from Rizal
Memorial Colleges. From 1991 to present, he has been a
private law practitioner. He became Chief Investigator and
Police Prosecutor (1987-1990) in Davao METRODISCOM,
Chief (Academics Branch) PNP Training Center Davao
City (1986-1987), Associate Professor (College of Law),
University of Mindanao Davao City (1991-1999), Board
Review professor (College of Criminology) University of
Mariano C. Alegarbes Mindanao Davao City (1998-2010).
TRUSTEE
Col. Melchior Isla Acosta, Jr. (Philippine Army

Retired) – Before being appointed as one of the MWSS’
Board of Trustees, he was the Deputy Administrator
(Customer Service Regulation) of MWSS-Regulatory
Office (May-June 2017 & 2006-2011), Technical
Assistant and Consultant for Secretary and ex-governor
Hermogenes Ebdane Jr., Chief of Staff of Sen. Gregorio
Honasan II and Consultant to the Presidents of Mustang
Security Group of Companies and Toyota Alabang.
His military record started in 1967 as PMA Cadet Class
of 1971 then became 2Lt Infantry Office (1971-1973),
Intelligence Officer/1Lt to Capt (1974-1982), Chief,
Production Branch/Major (1985-1986), Deputy and
Battallion Commander /Lt Col (1986-1987) to Lt Col,
Melchior I. Acosta, Jr. Special Service Unit, HHSG,PA (1987-2000). Prior to his
TRUSTEE PMA stint, he graduated from De La Salle University, Taft
in 1967. He spent his primary years in Stella Maris College
(1956-1958) and Cubao Elementary School (1959-1961)
and took his secondary education in UST High School
(1962-1965).

Justice Rudolf Philip B. Jurado – He sits as
an Ex-oficio member of the MWSS’ Board of Trustees,
being the Government Corporate Counsel (Office of the
Government Corporate Counsel), which position carries
the rank of a Presiding Justice of the Court of Appeals.
Coming from a family of lawyers, he also pursued a law
degree from University of the East Manila while working in
the Court of Appeals. Upon admission to the Bar in 1991,
Justice Jurado became an associate lawyer under Dean
Antonio Colonel, considered to be, the best litigator of
his generation. With this, Justice Jurado’s litigation skills
were honed and he became one of the best providers
of legal services to his famed clients. Like his mentor,
he became a volunteer lawyer of VACC, handled cases
of actors Robin Padilla, Joey Marquez, Retired Supreme Rudolf Philip B. Jurado
Court Associate Justice Justo Torres Jr., spouses Antonio TRUSTEE
Lagdameo and Dawn Zulueta, legal adviser of actress
Anne Curtis and other important personalities. He also
became law professor in various schools such as University
of the East, Manuel L. Quezon University, Lyceum Manila,
and Philippine School of Business Administration where
he taught Constitutional, Political, International law and
Political Science.
Merly Cruz – She is currently taking his doctorate

degree in Philippine Studies from University of the Philippines
Diliman (2011-present). Before that, he took his Masteral
degree in Business Administration in Ateneo de Davao
(2006), Entrepreneurial Management for Business Advantage
in Asian Institute of Management (2000) and Bachelor of
Science in Chemical Engineering from Mapua Institute of
Technology (1969). Currently, she is also one of the Board of
Directors for Small Business Corporation and Northern Food
Corporation since 2014. She is also a Consultant since 2013 for
Mindanao Development Authority and an Adviser on MSME
Development for Go Negosyo since 2016. She became the
Undersecretary of Department of Trade and Industry, member
of the Board of Governors for Board of Investments (BOI) and
Merly M. Cruz Phil Senior Official to BIMP-EAGA. She also became Regional
TRUSTEE and Provincial Director for DTI-Region XI.

Justice Jose Ricafort Hernandez – He graduated
from the University of the Philippines Diliman with a
law degree in 1976. Before that he took up AB Political
Science from the same school in 1967. During his early
years as lawyer, he became an Associate for Gozon, Elma
and Berenguer Law Offices (1977-1981) then later with
Hernandez and Tay Law Offices becoming its Chief Legal
Counsel from 1982-1986. From 1986-2004, he became a
Regional Trial Court judge and a Justice in Sandiganbayan
from 2004-2016.
Jose R. Hernandez
TRUSTEE
Atty. Melanie Sia-Lambino – She obtained her

degree of B.A. Liberal Arts and Sciences from University
of Sto. Tomas then pursued Bachelor of Laws from San
Sebastian College-Recoletos de Manila. She also obtained
her Master’s degree of Business/Managerial Economics
from University of Asia and the Pacific (2011-2014). She
became a supervising attorney for the Senate of the
Philippines in year 2004-2005 then became a Senior
Lawyer for Sia-Lambino Law Offices from 2006-2017. At
the moment, aside from being one of the members of the
Board of Trustees for MWSS, she is also a member of the
Board for PLEB-QC Local government since 2015.
Melanie Sia-Lambino
TRUSTEE
Atty. Valeriano Pasquil - A lawyer by profession, Trustee

Pasquil graduated with a Bachelor of Laws degree from
Ateneo de Zamboanga. Prior to his appointment in MWSS,
he is engaged in private practice in Davao City. He was also a
member of the Board of Directors of the Integrated Bar of the
Philippines Davao City Chapter.
Valeriano F. Pasquil
TRUSTEE

THE MWSS RAW WATER CONVEYANCE SYSTEM
It all starts with the Angat Watershed that provides of the six aqueducts to provide water in the districts
raw bulk water to the Angat Dam and Reservoir. of Bulacan.
Angat Dam is the main water source of the people
of Metro Manila, which is also getting additional The Balara and La Mesa Treatment Plants process
water from the Umiray River through the Umiray- water from its raw state to clean and potable water
Angat Transbasin Tunnel. From Angat Dam, the raw through series of screening and cleansing processes.
water traverses a distance of 6.4 kilometers directly The Balara Treatment Plant has a production capacity
to Ipo Dam where there are three tunnels going to of 1,600 mld and supplies more than six million
the nearby Bicti basins. Currently, a new (4th) tunnel people in the metro. The La Mesa Treatment Plant,
is being constructed to increase the volume of raw on the other hand, produces a capacity of 2,400 mld
water coming in. which supplies more than nine million people in the
metro as well.
The basins control the water flowing from it to the
six 16-km aqueducts going to the La Mesa Dam The La Mesa Water Treatment Plant is being operated
through the La Mesa Portal. From the La Mesa portal, by Maynilad which serves the West Zone of the
60% of water goes to La Mesa Treatment Plant and Concession area and the Balara Water Treatment
40% goes to the Balara Treatment Plant. An on-going Plant is being operated by Manila Water which serves
project the BBWSP is going to be tapped from one the East Zone of the Concession Area.

THE MWSS’ WATER LEGACY
“Where there is water, there is life.” This citation carries
with it the fundamental raison d’etre of MWSS and
underscores the proposition that the path towards
adequate supply of water will be a never-ending
cycle.
In the year 2011, MWSS mapped out the Water
Security Legacy Program which aims for sustainability
of water supply for the next 25 to 50 years within
Metro Manila and other parts of Rizal, Cavite and
Bulacan provinces. This has been conceived mainly
to establish a strong framework to carry out the
mandate of MWSS amidst increasing threat from the
country’s vulnerability to natural calamities.
The changing of the Administration did not go with
it the changing of the MWSS vision and mission.
Mutually correlated with the new administration’s
directive of serving the common good and being
fair and just to all, the reiteration of protecting
our environment and the seven legacy plans will
continue to serve as the framework of MWSS’
programs in its pursuit to cope with the challenge
of being stewards of the water supply and provider
of sewerage and sanitation services in MWSS’ service
area. The Seven Legacies of MWSS:
Legacy 1: Water Resources and Infrastructure

Development
Legacy 2: Water Distribution Efficiency
Legacy 3: Sewerage and Sanitation
Legacy 4: Water Rates Review and
Rationalization
Legacy 5: Organizational Excellence
Legacy 6: Partnership Building and
Development
Legacy 7: Communication and Knowledge
Management

WATER SECURITY ROADMAP
The new administration has sturdily sent out the message that the long term
plan on water security and sustainability will be of great importance and
urgency given the challenges our environment is facing today. Although our
water supply is sufficient to fend the water requirement of the population
now and in the near future, the direction this new administration is taking
is not to feel complacent about this but actively prepare for the future in te
rms of ensuring adequate, steady water source and protection to our environment.
The emphasis has been given to the following essential areas:

1. Short to long term water source projects
2. Disaster management plan
3. Sustainable environment program through watershed management projects
The interim to long term water source projects involve the determination of new
locations for new water source, rehabilitation of dams and construction of new tunnels
for water conveyance. Major flagship projects such as the New Centennial Water
Source-Kaliwa Dam Project (NCWS-KDP), Bulacan Bulk Water Source Project (BBWSP),
Angat Water Transmission Improvement Project (AWTIP), Sumag Diversion Project and
the Rehabilitation of the Umiray-Angat Transmission Project (UATP) will be among
the concentration of MWSS for the next 10 years. These are aligned with national
developmental goals and the President’s Build, Build, Build development policy.
Also, the Disaster Management plan is being geared up in the event a major
earthquake hits the Metro and in anticipation of the effects of flooding that would
greatly affect our water sources. Disaster Preparedness and Contingency Management
Plans are continuously being planned and laid out by MWSS in coordination with
other government and non-government agencies for the benefit of their respective
constituents.
A sustainable environment program through watershed management projects is very

vital as environmental conditions can directly affect the source and quality of our water
supply. On this, the MWSS together with the DENR and the two concessionaires is in
the forefront of watershed management and protection. In addition, the Annual Million
Tree Challenge (AMTC) program has been launched in mid-2017 led by MWSS with the
participation of partner agencies like DENR, MWSI, MWCI, Bantay-Kalikasan, and World
Wildlife foundation to help protect our watersheds in the coming years.
Indeed, the road to water sustenance can be rough, long and winding, and yet very
achievable if everyone works with unity and with the common good in mind. This is
what the new administration aspires to achieve in the days ahead.

LEGACY 1:
WATER RESOURCES AND

INFRASTRUCTURE DEVELOPMENT
ANGAT DAM AND DYKE STRENGTHENING PROJECT
It was through the disturbing declaration of – PHP 5017.3M
PHIVOLCS that the West Valley Fault, which runs 2. Instrumentation (Flood Forecasting and
through the Central Metro Area, is potentially Warning System on Dam operation)– PHP
active, that this project has been created. The 260.91M
fault runs 200 meters east of the Angat Main Dyke, 3. Consulting Services – 149.3M
which means, any movement might destroy the 4. Flood Control Protection Works (downstream
only source of water, at this point in time, in the of Angat) – 292.39M
whole of Metro Manila.
Instead of MWSS, the strengthening works of
With this, a Memorandum of Agreement was the dam and dyke is now being implemented
signed in October 2011 among MWSS, PSALM, and funded by K-Water, by virtue of a Supreme
NPC, NIA, PHIVOLCS, PAGASA, OCD and the Court decision awarding with finality to them
Bulacan province aiming to identify, prioritize the ownership of the Angat Dam and Dyke.
and implement a program that will ensure the The ensuing K-Water consortium with San
dependability of the Angat Dam and Dyke from Miguel Corporation is now known as the Angat
geological and hydro-meteorological hazards. A Hydropower Corporation or (AHC) pursuant to
Safety study was undertaken after the MOA signing their contract obligation to undertake mandatory
and the results suggested the strengthening of rehabilitation of Angat Dam. Construction works
the Angat Dam and Dyke and construction of an is on-going, being undertaken by Hanjin, the
auxiliary spillway to accommodate the updated contractor engaged by AHC.
Probable Maximum Flood of 12,000 cms.
What remained of MWSS’ obligations were the
The 5.719 Billion project is located in Norzagaray, Instrumentation (Flood Forecasting and Warning
Bulacan and has four components as per NEDA’s System on Dam operation) and Flood control
Board approval in September of 2012: protection works. But yet again, through separate
MOAs by NEDA and DBM to MWSS, the funds
1. Strengthening Works and Auxiliary Spillway intended for the remaining obligations were now

reassigned to NPC and the Provincial Government • Dam Instrumentation:
of Bulacan as the latter two will implement the • All seven (7) contract packages were already
aforementioned projects. awarded and are now on-going.
• This is being implemented by the National Power
Highlights of Accomplishments in 2017: Corporation as per MOA.
Strengthening works: Flood protection works:

• Construction works is on-going wherein 9 out of 10
• Construction works is on-going with 71.76% contract packages were already completed. This is
actual physical accomplishment as of 30 being implemented by the Provincial Government
November 2017. of Bulacan as per MOA.
BULACAN BULK WATER SUPPLY PROJECT

It was in 1992 when MWSS crafted a Memorandum now be able to address other obstacles that undermine
of Understanding with LWUA and the province of their ability to fulfill their mandate and expand service
Bulacan aiming to provide treated bulk water to the to fully cover their franchise areas, to wit:
24 municipalities of Bulacan in order to meet their 1. Inadequate water supply source;
current and projected water demand. The MOA was 2. Low water pressure due to the undersized
an offshoot of the Umiray-Angat Transmission Project. distribution system;
In April 1993, the Office of the President confirmed 3. Saline water intrusion of water sources;
the Resolution No.220-92 issued by MWSS Board 4. Aging distribution pipelines;
of Trustees mandating that Bulacan province also 5. Inadequate capacity of storage; and
be included among MWSS’ service areas. Thus, the 6. High Non-Revenue Water (NRW). The average
Bulacan Bulk Water Supply Project was created. NRW in the area is 30%.
The Php 16.32 Billion Bulacan Bulk Water Supply The Project will provide the WDs in Bulacan Province
Project will help the Water Districts {WD} in Bulacan with treated bulk water in order that they may be able
in addressing the water supply requirements of to expand service coverage, increase the number
the municipalities, thereby reducing groundwater of household served and meet their current and
extraction and use of deep wells which are being projected water demand. It will also address the need
discouraged due to their adverse environmental for bulk water supply through the water treatment
impact. Moreover, the WDs in Bulacan Province will facilities, interconnection to the WDs, conveyance
and, later during the third stage, the development/
construction of new water resources.
The Project is estimated to cost PhP 16.32 Billion
comprising of three (3) stages:
• Stage 1&2, PhP 7.16B

• Stage 3, PhP 2.45B
• Operation and Maintenance PhP 6.71B
The winning bidder is the Luzon Clean Water

Development Corporation, a consortium led by the
San Miguel Corporation. The concession period
will be for 30 years where the consortium will be
responsible for the financing, construction, operation,
and maintenance of the facilities for abstraction,

treatment, and conveyance of treated bulk water
supply. Once completed, the project will be able to
supply 2.7 cms (230MLD) of water, enough to support
the increasing number of population in Bulacan
province.
Highlights of project accomplishments/activities in

2017 are as follows:
• Completed the Financial Close and Detailed
Engineering Design (DED)
• Management decided not to pursue
the proposed consulting services for the
Construction Management because the work
of the consultant has practically been done due
to the completion of several pre-construction
works and the completed review of the Detailed
Engineering Design all done in-house. This was
approved by the MWSS Board.
• Ongoing construction works of Water
Treatment Plant and Conveyance Facilities with
an overall physical accomplishment is 39.82%
as of December 31, 2017.
• The Project is 14% ahead of schedule.
REHABILITATION, OPERATION AND MAINTENANCE
OF AHEPP AUXILIARY TURBINES 4 AND 5
The Angat Hydro-Electric Power Plant located in
Norzagaray, Bulacan has, as components, Auxiliary
Turbines 4 and 5 (AN-4 & AN-5) which are owned by
the MWSS. These turbines produce hydropower as a
by-product of water releases. MWSS, however, does
not have the proper capability in handling a power
plant; thus, they saw the need to enter into an O&M
Agreement with the private sector through public
bidding using a Private-Public Partnership scheme
for maintenance, operation and rehabilitation of
these turbines. If the MWSS turbines’ economic
life could be extended for another 30 years, it
will not only generate revenue for the agency
through concession payments but will also assist in
increasing energy output.
The bidding for the 1.155 Billion project, however,

was declared a failure on its first try in 2012. This
was before the Supreme Court’s final ruling on the
sale of Angat Dam to K-Water. While preparing
for the second round of bidding, the Supreme
Court released the landmark decision declaring
the award of AHEPP to K-Water as final, thus again
impeding MWSS’ plan for rehabilitation. In Dec of
2013, the OGCC released its opinion that MWSS
may lawfully negotiate with K-Water on the terms
of collaboration. Inspite of this, MWSS still sought
NEDA’s approval if they could directly negotiate
with AHC, which approval was granted in 2016.
Highlights of Accomplishments in CY 2017:
• The MWSS Board has approved on 13 December

2017 the re-bidding of the Project through
Public-Private Partnership scheme under the
Build-Operate-Transfer Law or (BOT Law) RA
6957, as amended by RA 7718, as originally
approved by the NEDA Board.
• The MWSS is currently undertaking the

preparation and review of bidding documents
and other related documents.

NEW CENTENNIAL WATER SUPPLY PROJECT
Total dependence on the Angat Dam for water Tanay, Rizal, Barangay Pagsanghan in General
supply of the whole metro will soon be over as Nakar, Quezon and Barangay Magsaysay in
the New Centennial Water Source-Kaliwa Dam Infanta, Quezon. Upon completion of the dam
Project (NCWS-KDP) unfolds. and tunnel, the construction of the treatment
plants including the operation and maintenance
This Php 18.724 Billion project, which will of the whole water system will be done by the
secure and increase the raw water supply for two Concessionaires Maynilad and Manila Water.
future demand, was originally proposed as an
integrated dam system of Laiban Dam with Highlights of Accomplishments in 2017:
hydropower component. However, on the
recommendation of NEDA, MWSS opted instead • The MWSS Board, in a meeting held last 13
for the construction of Kaliwa Dam including the December, 2017, has approved the following:
raw water passage as the first phase of the entire a) The Limited Competitive Bidding for
NCWS project. Moreover, the mode of financing three (3) Chinese Contractors endorsed by
has shifted from the originally proposed Public- the China Ministry of Commerce through
Private Partnership (PPP) to Official Development the Department of Finance (DOF) following
Assistance (ODA) by the Government of the the applicable procedures under RA 9184,
People’s Republic of China. and the bilateral arrangement between the
Governments of the Philippines and China; and
Upon the construction of the 27.70 kilometer b) The results of the vetting done on the
raw water conveyance tunnel traversing the three (3) Chinese Contractors
mountain areas of the towns of Tanay, Baras,
Teresa and Antipolo in Rizal, the dam is expected • The MWSS is undertaking the preparation
to discharge a capacity of 600 million liters per and review of bidding documents and other
day (600MLD). The tunnels, however, has a design related documents.
capacity of 2,400MLD, enough to accommodate • Ongoing coordination with DPWH relative
additional water from future dams {i.e., Laiban to the construction of the access roads of
Dam} to be constructed along the water path. The the Project.
Kaliwa dam is located in Barangay Pagsanghan, • Ongoing coordination with other LGUs
General Nakar and Barangay Magsaysay, Infanta and concerned agencies relative to their
both in the province of Quezon, while the endorsements and issuance of required
watershed areas cover Barangay Daraitan in clearances.

SUMAG RIVER DIVERSION PROJECT
The project involves the construction of a diversion tunnel
directing the water from Sumag River to the existing Umiray
Tunnel. From the Umiray Tunnel, additional volume of raw
water will be channeled to the Angat Reservoir to further
bolster, improve and secure the water supply of MWSS.
Needless to say, the additional water increases the buffer in
case of extremely dry season or what we now call El Niño. Once
completed, the project is expected to generate an additional
volume of 2.2cms or 188 MLD of water to the Angat Reservoir.
This project, located in Umiray, General Nakar Quezon, is being

implemented and funded by the Common Purpose Facility
(CPF) Office of the two Concessionaires (Manila Water and
Maynilad Water) and includes the construction of a 2.50m
diameter x 600 meters length tunnel. Total contract cost is Php
774 Million.
In 2013, the Notice of Award was issued to Cavite Ideal

International Construction and Development Corporation.
The contract works, except cutting trees, proceeded in 2014.
The actual physical accomplishment by the contractor was
50.073% by 2015.
While accomplishment rate was 67.79%, an unfortunate

incident happened on 13 August 2016. The Sumag River
overflowed that caused the coffer dam to collapse triggering
the water to rush into the diversion tunnel that caused the
death of 6 workers. The project was temporarily halted as
a result and also due to some documentary requirement
deficiencies that surfaced after the event.
Highlights of Accomplishments in CY 2017:
• Requirements for Quarry Permit were complied by CPF.

• Supplemental MOA by and amongst MWSS, MWCI, MWSI
and LGU General Nakar on watersheds protection and
management was signed by the parties on 27 September
2017, and witnessed by MWSS Corporate and Regulatory
Office. This Supplemental MOA is related to the Sumag and
Umiray Rehab Projects and is a condition of LGU General
Nakar prior to the lifting of the suspension.
• Lifting of Cease and Desist Order (CDO) was issued by LGU
General Nakar during the meeting held at MWSS office last
21 November 2017.
• The contractor is preparing some documentation works
prior to resumption of contract works.

LEGACY 2:
WATER
DISTRIBUTION
EFFICIENCY

ANGAT WATER TRANSMISSION
IMPROVEMENT PROJECT (AWTIP)
One of the big ticket projects of MWSS, the Angat
Water Transmission Improvement Project’s original
plan was only to rehabilitate the system downstream
of Bigte which involves the aqueducts. But after
conducting a Feasibility Study, it was discovered
that it was first necessary to improve the tunnels
between Ipo and Bigte in the rehabilitation as they
form an essential part of the aqueduct downstream
of Bigte. This project aims to increase the reliability
and security of raw water coming from the Angat
Dam through rehabilitation of the transmission
system from Ipo to La Mesa and integration of
water safety, risk and asset management plans in
the project.
This project located in Norzagaray, Bulacan, involves

the construction of new Tunnel No.4, as proposed in
the feasibility study. The priority of this undertaking
is the construction of pipe and outlet works that
will facilitate the subsequent rehabilitation of the
whole transmission system. Once constructed, the
whole design capacity of the tunnel from Ipo to
Bigte which has a diameter of 4 meters and a length
of 6.30 kilometers can generate an additional 19
cubic meters of water per second. The project will
be financed from an ABD loan worth US$123.64M
(PHP 5.687B) that will be paid by the winning bidder,
C.M.C di Ravenna. Taxes will be shouldered by the
Philippine government amounting to US$10.34M.
Highlights of Accomplishments in 2017:
• Detailed Engineering Design (DED) completed.
• Ongoing discussion between MWSS and ADB

on the results of the Technical Evaluation on
the five (5) short-listed bidders for consultancy
services
• Ongoing Construction Works with 23.69%

overall physical accomplishment as of
December 31, 2017.
REHABILITATION OF UATP FACILITIES
The Umiray-Angat Transbasin Tunnel (UATP) was awarded to A.M. Oreta Construction and the Notice
built and became operational in June 2000 to to Proceed was issued on 20 April 2016. This project
provide additional raw water to the Angat Reservoir will ensure the continuous flow of raw water from
coming from the Umiray River thru the Macua River. the Umiray River to the Angat Reservoir and aims to
The intake facilities of the 13-km tunnel are located strengthen the UATP to withstand natural calamities
in Umiray, General Nakar Quezon while the outlets for the longest period of time.
are situated in Macua, Doña Remedios Trinidad,
Bulacan. Water generated is estimated to be 20-30% This 717M project had reached 37.87% of its actual
(780 million liters per day) of water to Metro Manila. physical accomplishment, as of 31 July 2016, but
was suspended in August 2016 due to the accident
On November 29, 2004, the tunnel and its facilities in Umiray which also affected the Sumag Diversion
were severely damaged by a typhoon causing project killing 6 people. This Project is connected
complete stoppage of operations due to the debris, with the subject of the MOA of MWSS with the LGU
boulders and logs that clogged the flow of water in of General Nakar regarding the protection of their
the tunnel. It took 3.5 months of de-clogging works watersheds.
before normal operations finally resumed on March
17, 2005. Since the urgent works were only done for Highlights of Accomplishments in 2017:
the purpose of temporarily clearing the blockages,
management decided to conduct permanent • Requirements for construction permit were
rehabilitation work to strengthen and protect the already complied by CPF.
structures/facilities from future floods and typhoons. • In view of the lifting of Cease and Desist Order
A consultant was hired by the Concessionaires which (CDO) issued the local government of General
prepared the detailed design. Nakar, the contractor for this Project is likewise
preparing the necessary documentation works
The project, which is funded and implemented prior to resumption of contract works.
by the Common Purpose Facility (CPF) Office, was
LEGACY 3:
SEWERAGE AND SANITATION

COMPLIANCE
Following the Concessionaires’ provision on

sewerage and sanitation services in compliance
to the Concession Agreement (1997-2022) and
Concessions Agreement’s Term Extension (2022-
2037), MWSS has continuously been reinforcing
the two concessionaires’ services towards providing
efficient and safe services on sewerage and
sanitation within their areas of jurisdiction through
Key Performance Indicators (KPIs) and Business
Efficiency Measures (BEMs) reports.
Nonetheless, incessant challenges continue to arise

due to the following factors:
1. Congestion in the metropolis

2. Availability of land for wastewater facilities
3. Acquisition of right of way for sewer lines
4. Solid wastes in the influent
5. Uncontrollable influent quality
6. Capacity and Willingness to pay
7. Consistency in regulations and regulatory
environment

Despite the factors raised, sewerage and sanitation For 2017, WQCD collected a total of 1,350 samples
compliance is continuously being met by means of (excluding resampling) from the distribution system
implementation of programs such as: out of the 1,056 target number of samples. Thus,
WQCD obtained a total of 127.84% in terms of
1. Clean-up of Manila Bay frequency compliance for bacteriological test.
2. Three-River System Improvement Program
(a program for the treatment of sewer and Aside from the samples collected by WQCD, Manila
wastewater before such water returns to Water and Maynilad also conducted self-monitoring
the 3-river system of San Juan, Marikina and tests which are submitted to the RO through the
Mandaluyong) KPIs+BEMs Report. Based on the report, Manila Water
3. Continuous desludging of septic tanks per the collected 10,596 samples while Maynilad collected
targets set 12,656 samples. Both concessionaires achieved a
4. Breakdown of targets per municipality and city of 100% compliance in terms of quality and target
prioritization and better monitoring number of samples per month.
5. Adoption of a creek interception and drainage
outflow interception
6. Setting-up of wastewater treatment facilities in
defined catchment areas and major interceptor Table 5: Compliance of WQCD for 2017
lines
7. Upgrading and expansion of Central Manila % of
Sewerage System Actual Target
Target
8. Better target and standard-setting and improved
design criteria Number of 1,350 1,056* 127.84%
9. Improved treatment technology and design Samples
capacity for Sewerage Treatment Plants (STPs) collected and
10. Improved sewer ordinance and policy making tested on Water
11. Continuing awareness campaign on water
reuse Compliance 99.41% 95% 104.64%
with PNSDW on
The MWSS Regulatory Office, particularly the Water Bacteriological
Quality Control Department, closely monitors the Quality
concessionaires’ handling of water supply services
and sewerage and sanitation services.
*The decrease of target for the year (about 132 samples per month for 8
months) is due to peculiarity in the procurement of third party laboratory
WATER QUALITY CONTROL services.
I. WATER QUALITY
The Philippine National Standards for Drinking Water
The Water Quality Control Department (WQCD) (PNSDW) requires water supply operators to conduct
monitors concessionaires’ compliance to Philippine regular water quality testing from raw water source
National Standards for Drinking Water published by the to distribution - at the customer’s taps including
Department of Health (or successor entity responsible service reservoirs. This is to ensure that the water
for such standards). The Concessionaire shall observe supply being distributed to the consuming public is
any requirements regarding sampling, record keeping or safe and potable eliminating the risk to public health.
reporting as may be specified by law in the Philippines.
Adherence to quality management system and technical SM3 pertains to the Bacteriological compliance
competency such as certification to ISO 17025 or the DENR with PNSDW on the quality of treated water being
Laboratory Recognition ensures reliability and accuracy distributed to the customers and the number
of reports submitted to the RO by the concessionaires. of samples collected as against the target by
evaluating the frequency compliance by WQCD

including Maynilad and Manila Water samples Of the eight failed samples collected by WQCD, two
collected. Concessionaire’s data were obtained were from Manila Water Concession area (one each
through monthly KPI submissions. Of the 24,602 from Taytay and Quezon City) and six from Maynilad
total samples collected, 24,594 samples complied Water Concession area (one each from Malabon,
with bacteriological quality requirement of PNSDW Caloocan, Manila, Parañaque, and two in Cavite
or a compliance rating of 99.97% which is way above (Rosario & Bacoor)).
the 95% target. Only samples collected by WQCD
had eight failed samples reported out of the 1,350. On each occasion that the standard for total coliforms
Samples collected by WQCD accounts for only 5.49% or fecal coliforms was breached, WQCD, jointly with the
of the total number of samples evaluated (24,602). concerned Concessionaire and sometimes with the
Manila Water samples accounts for 43.07% and local health unit, carried out an investigation into the
Maynilad Water samples accounts for the remaining cause and, where necessary, Concessionaire was asked
51.44%. to take appropriate remedial action. Every sample
failure on the bacteriological quality was thoroughly
investigated including taking samples from nearby
Table 6: Compliance with Bacteriological properties (downstream & upstream) to ensure that the
Quality of the Philippine National Standards for problem is not widespread. There was no indication,
Drinking Water from the investigations conducted jointly by WQCD
and Concessionaire following bacteriological
Total Number Percentage failure, of fecal contamination event affecting
Number of Water of Water other properties in the area. Mostly, investigations
of Water Quality Quality Tests indicated that the failures may be attributed to the
Quality Tests Not Meeting the unsatisfactory condition of the Customers’ tap, which
Tests Meeting PNSDW often cannot be adequately disinfected before a
the sample is collected. This is prevalent on most of the
PNSDW RSPs with plastic faucets. In each of these cases,
resampling within the area demonstrated there was
Maynilad 12,656 0 100.00%
not a wider issue with water quality. All the residents of
(12,636)*
the households with positive result were given advice
Manila Water 10,596 0 100.00% on tap hygiene. Concessionaires were also reminded
(10,368)* that inappropriate plumbing arrangements need to
be acted upon irrespective of sample results. Thus,
MWSS-RO (WQCD) Samples concerned Concessionaire took action in replacing
sampling taps made of plastic materials with metal
faucet so that adequate disinfection of the sampling
Maynilad 737 6 99.19% tap can be made before water sample is collected.
II. WASTEWATER QUALITY

Manila Water 613 2 99.67%
The Water Quality Control Department (WQCD) also
Subtotal 1,350 8 99.41% monitors concessionaires’ compliance with all national
and local environmental laws and standards relating
to treated wastewater in the Service Area and in
Total 24,602 8 accordance with a schedule of compliance provided by
the Regulatory Office as the same may be modified or
supplemented from time to time in consultation with the
Over-all Compliance (average of the 99.97% Concessionaire, and the Concessionaire shall have the
12-month compliance period) sole liability for any changes or fines that may be assessed
in connection with violations thereof. Adherence to
*Total number of samples required for the year based on population.
quality management system and technical competency

such as certification to ISO 17025 or the DENR Laboratory Table 8: Compliance with DAO 2016-08
Recognition ensures reliability and accuracy of reports
submitted to the RO by the concessionaires. Total Number Percentage
Number of Effluent of Effluent
Wastewater Effluent being discharged in our water of Effluent samples Quality tests
bodies is being monitored by WQCD to comply with Samples not meeting the
the standard set by the Department of Environment & Monitored meeting DAO
Natural Resources (DENR) Administrative Order # 2016-08 the DAO
Water Quality Guidelines and General Effluent Standards
of 2016. Maynilad 240 31
(240)*
For 2017, a total of 60 Sewage Treatment Plants (STP) &
Septage Treatment Plants (SpTP) has been monitored: 96.72%
Manila Water 981 9
40 STPs & SpTP is being operated by Manila Water and
(963)*
20 STPs & SpTPs is being operated by Maynilad. Target
for the number of samples to be collected was set at
448 samples per year. WQCD monitored 453 samples MWSS-RO (WQCD) Samples
on the 60 STPs/SpTPs that translate to a rating of
101.12%. Maynilad 150 14 90.67%
Manila Water 303 1 99.67%

Table 7: Compliance of WQCD for 2017
Subtotal 453 15 96.69%
% of Total 1674 60 96.50%

Actual Target
Target
*Total number of samples required for the year based on population.
Number of 453 448 101.12%
Samples
collected and Only one sample per facility is being collected on a
tested on monthly basis. Each facility is being rated based on its
Wastewater compliance to DENR AO # 2016-08 on the five parameters
(MWSS RO data) set by WQCD Guidance Document on monitoring the
quality of wastewater effluent namely: Biochemical
Percentage of 96.69% 90.50% 106.84% Oxygen Demand (BOD), Surfactants, Total Suspended
Samples from Solids (TSS), Oil & Grease (O&G) and Fecal Coliform (FC).
STPs/SpTPs
compliant to The compliance for Manila Water wastewater facilities
DAO 2016-08 is computed by taking the sum of the weight
assigned for each of the five parameters: BOD-50%,
Surfactants-20%, TSS-10%, O&G -15% &FC-5%. Zero
SM6 is a strategic measure that aims to monitor the rating shall be given to any failed parameter. The
compliance of the Concessionaires in operating an required performance is > 95%.
environment-friendly sewerage system and further
promoting a healthy environment especially on the For Maynilad, facility performance is evaluated 100%
waterways where effluent is being discharge. Thus, when the sample passed the five previously identified
Total Effluent Quality Rating for all the 60 STPs posted parameters; otherwise the STP is given 0% rating. The
at 96.50% (as shown in Table 6). required performance rating was set at 100%. Any
rating below 100% will be considered failed.

LEGACY 4:
WATER RATES REVIEW

AND RATIONALIZATION
As stated in its Charter, to wit: “ to fix periodically domestic water service connections while Maynilad
the water rates and sewerage service fees as the installed 12,924 new connections. Cumulative total
system deem just and equitable; to approve, regulate of new domestic water connections installed for
and supervise the establishment, operation and CY 2017 is 31,990 for Manila Water and 51,081 for
maintenance of waterworks and deep wells within its Maynilad. Total domestic water service connections
jurisdiction operated for commercial, industrial and billed as of 31 December 2017 is 978,824 for Manila
government purposes and to fix just and equitable Water and 1,295,330 for Maynilad.
rates or fees that may be charged to customers,”,
MWSS continues to balance the goal of protecting For CY 2017 combined new domestic water service
the water consumer and ensuring the efficiency of connections for both Manila Water and Maynilad
Concessionaires’ business plans. total 83,071, which exceeded the 76,752 new
domestic water service connections target for CY
The MWSS Regulatory Office monitors the activities as 2017 of the RO Performance Scorecard approved by
well as the status of the performance of Manila Water the Governance Commission for GOCCs (GCG).
and Maynilad relative to their service obligations as
provided in the Concession Agreement. New Domestic Sewer Connections (S1) – Manila
Water installed 1,783 new domestic sewer
Customer Service Regulation Area: connections while Maynilad installed 3,796 new
sewer connections for CY 2017. Domestic sewer
I. Concessionaires’ Submissions connections sum up to 135,110 for Manila Water and
55,682 billed services for Maynilad as of 31 December
A. Key Performance Indicators (KPIs) Reports 2017. Only 2 new domestic sewer connections were
installed by Maynilad during the 4th quarter 2017
New Domestic Water Service Connections (W1) - For due to difficulty in securing excavation permits
the 4th quarter 2017, Manila Water installed 7,139 new while those with permits are still under construction

as reported in the KPI + BEM submission. Sewer Individualization of People’s Organizations (PO) –
domestic connections for both Concessionaires total Manila Water has converted 68.07% or 516 out of
190,792, falling short of the RO GCG target of 197,623 758 covered PO accounts as of 31 December 2017.
domestic sewer connections for CY 2017. Maynilad has no PO accounts hence, not covered by
this IRR.
Sanitation (S2) – Total septic tanks desludged for
the 4th quarter 2017 is 33,164 for Manila Water and Disconnection and Reconnection of Water Service
19,067 for Maynilad. Cumulative total of septic tanks Connection – Manila Water has disconnected 27,065
desludged for CY 2017 is 104,170 for Manila Water and and reconnected 19,226 water service connection
78,389 for Maynilad. The combined total of 182,559 accounts for the 4th quarter 2017. Maynilad has
septic tanks desludged for both Concessionaires disconnected 48,309 accounts and reconnected
surpassed the RO proposed GCG target of 118,528 19,148 accounts, likewise for the 4th quarter 2017.
septic tanks desludged for CY 2017.
Rate Classification and Billing Scheme of Small Scale
Service Complaints (C1) - For the 4th quarter 2017, (Home Based) Businesses – As of the 4th quarter
Manila Water has resolved 97.24% or 8,471 out of 2017, Manila Water has already reclassified 100%
8,711 service complaints while Maynilad has resolved of the total 373 covered accounts while Maynilad
99.86% or 12,862 out of the total 12,880 service reclassified 1,650 of the 1,826 or 90%of the covered
complaints. Likewise, for CY 2017, Manila Water has accounts reported.
resolved 96.06% or 35,893 out of 37,365 received
service complaints while Maynilad has resolved Rate Classification for Places of Worships – Manila
99.71% or 54,031 out of 54,185 service complaints Water has reclassified 99.59% or 727 out of 730
received as reported in the KPI+BEM Reports. Both and Maynilad 97% or 817 out of 839 of the covered
Concessionaires surpassed their target of 95%. accounts as of 31 December 2017.
Billing Complaints (C2) – Manila Water has resolved Revised IRR in the Billing Scheme and Rate
93.18% or 5,180 out of the total 5,559 billing Reclassification for High Rise and Other Multiple
complaints received while Maynilad has resolved Dwellings – Manila Water has reclassified 245 out of
99.74% or 11,691 out of the 11,721 billing complaints 254 or 96.46% and Maynilad 92 out of 95 or 97% of
received for the 4th quarter 2017. Likewise, for CY the covered accounts as of end 2017.
2017, Manila Water has resolved 94.52% or 19,493 out
of 20,624 billing complaints received while Maynilad Treatment and Rate Reclassification of Domestic
has resolved 99.71% or 56,370 out of 56,653 service Customers Inside Military and Police Installations –
complaints received as reported in the KPI+BEM Manila Water has no change in the reclassified 60%
Reports Both Manila Water and Maynilad passed the or 3 out of 5 covered accounts. Maynilad has already
KPI target of 90%. reclassified 100% of the 4 covered accounts.
Evaluation and analysis of the Concessionaires’ KPI data Additional Water Meter and Transfer of Connection
on W1, S1, S2, C1, and C2 will be included in the RO KPI Tapping Point – For the 4th quarter 2017, Manila
and BEM Committee evaluation of the Concessionaires’ Water has installed 100% of the 3,069 applications
Semi-Annual/Annual 2017 KPI + BEM Reports. for additional meters and has relocated 100%
of the 44 applications for the transfer tapping
B. IRRs Compliance Reports of connection. On the other hand, Maynilad has
installed 4,389 additional meters and transferred
Interconnection and Turn Over of Subdivisions – tapping connection of 21 applications also for the
Manila Water has converted 62.57% or 436 of the 4th quarter 2017.
total 696 covered accounts as of 4th quarter 2017.
For Maynilad, 70.88% or 1,285 of 1,813 subdivisions Rate Reclassification of Certain Government
has been individualized as of 31 December 2017. Institutions – As of 31 December 2017, Manila Water

has already reclassified 99.46% or 553 of 556 of the with the Office of the Special Assistant to the
covered accounts while Maynilad reclassified 89% or President was directed to collaborate with other
517 of the 583 of the covered accounts as reported. government agencies in the operation of the 8888
Hotline, and enter into such arrangements necessary
II. CSR Validation and Verification Activities for the possible interconnection and integration of
existing public feedback mechanisms.
A. IRR Related Validation and Verification
Activities In compliance to the Memorandum of Cabinet
Secretary, Leoncio B. Evasco, Jr. dated 18 October
CSR has verified and validated Concessionaires’ 2017, the RO designated CSR Deputy Administrator
reports, thru the conduct of field verification/site Lee Robert M. Britanico as Permanent Focal Person,
inspection, interview and examination of meter CSMD Department Manager Rosendo O. Alegre as
reading and billing records a total of 298 customers the Alternate Focal Person and Senior WURO Olivia I.
of Manila Water and 355 customers of Maynilad. Since Tolentino as Technical Officer. The three designated
the re-classification of qualified accounts in the list Focal Persons attended the Orientation/Simulation
submitted by the Concessionaires was already 100% and the clarification meeting on the procedures of
as of 2017, continuous monitoring shall still be done the Hotline 8888 portal at Malacanang Palace, Manila.
by the CSR through customer complaints. Hotline 8888 referrals to RO are received, endorsed
and monitored by CSR. For November and December
Coinciding with the conduct of the 2017 Rate 2017, CSR has endorsed 94 referrals where 69 referrals
Rebasing, a review of the 2013 IRRs (and other have been acted upon by the Concessionaires and
existing customer service related policies) along closed by 8888. 35 endorsed referrals are still on-
with the specific issues and concerns raised by CSR process.
including those of Manila Water and Maynilad are
currently being discussed and deliberated by the IV. Customer Complaints
Committee on Common Regulatory Issues (CRI) to
formulate and agree on the amendments for the A. Complaints Received - For the 4th quarter 2017,
issuance of new IRRs. 12 complaints were filed against Manila Water
and 20 complaints plus 3 backlogs complaints
B. KPI Related Validation and Verification from the previous months for Maynilad. For CY
Activities 2017, CSR has received a total of 119 complaints,
of which 116 complaints or 97% have been
For CY 2017, CSR has conducted verification and resolved at the Concessionaires’ level. Conference
validation a total of 64 sample customers from meetings conducted by CSR for CY 2017 totals
Manila Water and also 64 sample customers from 84 to resolve customer’s complaints.
Maynilad for KPI C2 (Billing Complaints) which were
randomly selected from the monthly 2017 KPI+BEM B. Status of Customer Complaints - Of the 32
Reports. Interviewed customers rated Manila Water complaints received for the 4th quarter 2017
“4” or “Satisfactory” while Maynilad was rated “3” or with 3 backlogs, 63% or 22 complaints were
“Fair”. resolved within the prescribed period of 10 days
and 29% or 10 complaints resolved beyond 10
III. 8888 Citizen’s Complaint Hotline days with 3 complaints still unresolved. CSR
has issued 38 Resolutions and 5 Closure Letters
Executive Order No. 06 establishes and on closed and resolved complaints for the 4th
institutionalizes the 8888 Citizen’s Complaint Hotline quarter 2017. Total of CSR Resolutions issued for
serving as a mechanism where citizens can report CY 2017 is 117 inclusive of 7 Closure Letters.
their complaints and grievances on acts of red tape
and/or corruption of any government agency. The Relative to the RO proposed GCG 2017 target for
Office of the Cabinet Secretary (OCS), in coordination SO 5/SM14 which is 90% of complaints resolved

within 10 working days from submission for comprises 6.10% of the 13,635 total complaints.
resolution, CSR has exceeded the target with Year-to-date total of defective meters is 7,195 which
100% or 117 issued Resolutions within 10 comprised 6.5% of the total 110,838 service and
days out of the 117 complaints submitted for billing complaints received for CY 2017.
resolution for CY 2017.
V. Water Service Interruptions
C. Meter Testing For the 4th quarter 2017, Manila Water recorded
and posted in social media accounts, published in
Complaints-Related Meter Testing – Two (2) newspapers, and aired over radio & tv stations 214
invitations from Manila Water and one (1) invitation planned and 258 emergency water interruptions of
from Maynilad to witness testing of customers’ meter less than 24 hours. Maynilad posted on its Facebook
were attended by CSR for the 4th quarter 2017. Meter account a total of 364 notices of planned interruptions
testing invitations received and attended by CSR for for the 4th quarter 2017. For CY 2017, Manila Water
CY 2017 totals 6 for Manila Water and 2 for Maynilad. posted a total of 2,180 planned and emergency
water interruptions while Maynilad posted a total of
Water Meter Test Results for 4th Quarter/Annual 582 notices for planned water interruptions.
2017 - Manila Water reported for the 4th quarter
a total of 615 suspected defective and tampered Financial Regulation Area
water meters which were inspected and tested for
accuracy. Year-to-date meters tested totals 2,534. The Financial Regulation Area (FRA) with the
Out of the 615 meters tested, 85% or 520 passed support of its two (2) departments, Financial Audit
the flow accuracy test with year-to-date of 2,160 and Asset Monitoring Department (FAAMD) and
meters. For the quarter in review, 13.4% or 91 tested Tariff Control and Monitoring Department (TCMD),
meters were found defective and 4 meters were performed its tasks to ascertain the Concessionaires’
found tampered. For CY 2017, a total of 368 meters overall financial performance. FAAMD monitors and
were tested defective and only 6 meters were found evaluates the financial operations and status of the
defective. Concessionaires, which includes the validation of
cash Flows relative to tariff adjustment activities.
On the other hand, Maynilad reported a total of 434 TCMD verifies and evaluates petitions for tariff
suspected defective and tampered meters which adjustments and monitors compliance of the
were pulled out, inspected and tested for accuracy. approved standard rates and other charges as
Year-to-date meters tested totals 2,277. Out of the provided for in the Concession Agreement.
434 meters tested, 44.7% or 194 units passed the flow
accuracy test and found to be still in good working BUSINESS EFFICIENCY MEASURES
condition. Year-to-date total of meters that passed
the accuracy test totals 1,149. 14.5% or 63 meters A template for Monthly Trending Report was
of various sizes tested were found defective due to developed for Business Efficiency Measures (BEMs).
wear and tear while 177 meters or 55% of the 434 With it, FAAMD is able to monitor the efficiency of
meters inspected/tested were found tampered. For the Concessionaire vis-à-vis its Business Plan with
CY 2017, a total of 529 meters were tested defective relative ease and simplicity. With the aid of the
and 599 meters were found defective. Monthly Trending Report, FAAMD submitted ten (10)
reports and contributed its evaluation to KPI/BEMs
Manila Water received a total of 639 complaints Committee for the 2016 Annual KPI/BEMs Report
on defective meters or 4.7% of the 13,635 total and 2017 1st Half KPI/BEMs Report.
complaints and 13% of the 4,924 billing complaints
for the 4th quarter 2017. Year-to-date total of FOREIGN CURRENCY DIFFERENTIAL
defective meters is 2,790 which is at 4.8% of the ADJUSTMENT
total 57,989 service and billing complaints received.
Maynilad received a total of 2,132 complaints on Pursuant to the provisions of the Amendment No.
defective meters for the 4th quarter 2017 which 1 of the Concession Agreement approved by the

MWSS Board of Trustees under Board Resolution No. 487-2001 and 512-2001 dated October 1, 2001 and
October 12, 2001 for Maynilad Water Services, Inc. and Manila Water Company, Inc., respectively, a Foreign
Currency Differential Adjustment (FCDA) mechanism is calculated for both concessionaires on a quarterly
basis.
Computed FCDA amount and tariff impact to customers are as follows:
Maynilad Manila Water

Charging Period Petition Received Evaluation Petition Evaluation
Submitted Received Submitted
2nd Quarter 2017 24 Feb 2017 06 Mar 2017 20 Feb 2017 06 Mar 2017
FCDA, (%) 0.77% 0.69% 2.81% 2.80%
FCDA, (P/m3) 0.26 0.24 0.70 0.69
3rd Quarter 2017 22 May 2017 01 Jun 2017 19 May 2017 01 Jun 2017
FCDA, (%) 0.90% 0.80% 3.93% 3.92%
FCDA, (P/m3) 0.31 0.27 0.98 0.97
4th Quarter 2017 22 Aug 2017 05 Sep 2017 22 Aug 2017 05 Sep 2017
FCDA, (%) 1.24% 1.09% 4.89% 4.86%
FCDA, (P/m3) 0.43 0.38 1.21 1.21
1st Quarter 2018 05 Oct 2017 06 Dec 2017 03 Oct 2017 06 Dec 2017
FCDA, (%) 0.70% 0.60% 2.50% 2.46%
FCDA, (P/m3) 0.25 0.21 0.64 0.63
Apart from validating and recommending the FCDA Apart from validating and recommending the Standard
for the specified quarter, the TCMD also monitored Rates for a Charging year (i.e. 2017), the TCMD also
implementation of the new rates, on a random basis. monitored the implementation of the new rates, in
most cases, together with the FCDA for the 1st quarter
RATES ADJUSTMENT LIMIT of the same year, on a random basis.
As provided in Section 9.2 of the Concession RATE REBASING

Agreement, as amended, “The Standard Rates for
water and sewerage services shall be adjusted each FRA was active in the rate rebasing exercise/activities.
year effective January 1 of each Charging Year, in Prior to the submission by Maynilad and Manila
accordance with (i) the Rates Adjustment Limit set Water of its business plan on 31 March 2017, FRA
forth in Section 9.2.1, x x x” The RAL is defined as the already identified initial information requirements and
percentage, either positive or negative, equals to submitted the list to the Rate Rebasing Management
the sum of the percentage change in the Consumer Committee (RRMC). Subsequently, FAAMD and TCMD
Price Index for the Philippines (“C”), Extraordinary performed the following:
Price Adjustment (“E”), and Rebasing Convergence
Adjustment (“R”) or RAL = “C” + “E” + “R” • Assisted and coordinated with the 4th rate Rebasing
Consultants regarding the evaluation of regulatory
TCMD validated and recommended the Standard account balances for the period 2012-2016 of both
Rates that complied with the RAL for the Charging Concessionaires subjected to financial audit.
Year 2018 based on the following matrix: • Submitted the Evaluation of the Future Cash Flow
Report and Business Plan Evaluation Report to the
Factors Maynilad Manila Water RRMC.
“C” 2.80% 2.80% • Submitted the draft Report on the determination
“E” 0.00% 0.00% Appropriate Discount Rate (ADR).
• Reviewed Consultant’s reports, i.e. Inception Report,
“R” 0.00% 0.00% Statement of Issues and Proposed Solutions, and
RAL 2.80% 2.80% ADR Report.

AVERAGE ANNUAL INFLATION RATE
TCMD performed its regular functions of monitoring the annual inflation rates. Under the Concession Agreements,
the average inflation indicated in the officially-released figures from the Philippine Statistics Authority (PSA) shall be
used for the annual adjustments of certain charges and thresholds as shown below:
Particulars 2016 2017

Annual Inflation Rate 1/ 1.4% 1.8%
Annual Budget (Sections 6.2 & 11.2)
Corporate Office P496,137,541.00 P505,068,017.00
Regulatory Office P496,137,541.00 P505,068.017.00
Connection Charge (Section 9.5(i)) P7,442.06 P7,576.02
Connection Charge 2/ (IRR No. 2008-06) P2,480.69 P2,525.34
Reconnection Charge (IRR Nos. 2008-01 & 2013-01) P202.80 P206.45
Procurement of Goods and Services (Section 6.10) P620,172.00 P631,335
Appeals Panel per diem (Section 12.6(ii)) P6,202.00 P6,313.00
Low Income Household (Section 1) P124,034.00 P126,267.00
1/ Annual Inflation Rate applied is the average inflation rate of the previous calendar year. For CY-2013 onwards, 2006-based CPI was used.
2/ For Open/Depressed Communities
OTHER ACTIVITIES other areas and/or third party requests/complaints. In

2017, the major issues addressed by FRA are as follow:
The other regular monitoring activities of the FRA are
as follows: 1. TCMD inputs on the Revised Draft ADR
Determination Framework
1. TCMD conducted quarterly monitoring of key
economic indicators, i.e. Consumer Price Index, 2. FAAMD comments and inputs on COA’s on
reference Exchange Rates, T-bill Rate, Interest Revised RORB Report;
Rate, etc. that are relevant to the Concession
Agreement. 3. FAAMD and/or TCMD comments on request from
Concessionaire/s or Corporate Office:
2. FAAMD performed quarterly and annual financial
analyses of Concessionaires’ financial performance • Proposed process Upgrade of and Retrofitting
using its designed template for the following: Works on La Mesa Treatment Plant 1
• JICA loans treated as Concessionaires’ loans
a. Quarterly and Annual Financial Analyses model; • Maynilad’s Minimum Rate and Disconnection
b. “Scorecard” for quarterly analysis; and policy
c. “Annual Financial Analysis Report”.
4. FRA presentation to other water operators, such
Part of the intervening activities of FRA and its as water districts, on the experiences of the RO
departments is to provide inputs, comments, with the privatized operations of MWSS.
recommendations on other issues being handled by

Technical Regulation Area
OPERATION MONITORING DEPARTMENT (OMD)
The OMD is primarily tasked with monitoring the Concessionaires’ capital and maintenance works projects to ensure
compliance of these projects in meeting their Service Obligation Targets. In coordination with the FRA and with the
aid of a 3rd party independent Consultant, it audits and evaluates the necessity, prudency and the cost efficiency
of projects undertaken by the Concessionaires. In addition, the OMD monitors and evaluates the compliance of the
Concessionaires to their Service Obligations, such as asset management, water availability and pressure, among others.
I. WATER AVAILABILITY AND PRESSURE
To evaluate and validate the Concessionaire’s compliance, RO initiated and approved the inclusion of the
procurement of pressure data loggers in the 2008 Business Plan. The data loggers will serve as tool for the RO to
continuously monitor and validate the prevailing field conditions of the entire east and west zone concerning
water availability and pressure. Each of the pressure data loggers were installed based on hydraulic considerations
within a certain District Metering Area (DMA) in which their locations were selected based on the following
criteria:
a. Customers that are located on elevated areas,

b. Customers that are located on the extremities of the distribution system,
c. Customers that are located far from any source/pumping or booster stations.
Data loggers are installed at mutually determined Regulatory Benchmark Customers (RBCs) for Manila Water
and Pressure Monitoring Points (PMPs) for Maynilad. RBCs are located at the customer side of the water meter
while PMPs are located within the tertiary distribution lines. Conditions shown on Table 1 will be the basis for the
evaluation of RBCs and PMPs:
Table 1: Criteria for Evaluating RBCs & PMPs
Maynilad Manila Water
Pressure (P) condition Availability/ Pressure Pressure (P) condition Availability/ Pressure
during the Quarter during the Quarter
P > 16 psi Passed P > 7 psi Passed
P < 16 psi, due to Passed P < 7 psi, due to planned Passed

planned interruption interruption
P < 16 psi in < 24 hours, Passed P < 7 psi but not more Passed1
under unplanned than a total of 24 hours
interruption during the quarter, under
unplanned interruption
Service obligation: 24/16 Service obligation: 24/7
Number of PMPs used in the evaluation: 25 Number of RBCs used in the evaluation: 16
1
Concessionaire must report all unplanned interruptions for MWSS RO evaluation if reason is acceptable for the exclusion in the “Failed” rating.

RO randomly selected 64 Regulatory Benchmark Customers (RBC) and 103 Pressure Monitoring Points (PMP)
that represents at least one point per BA. The summary of the result of the evaluation and validation on water
availability and pressure covering the period of 2017 is shown in Table 2.
Table 2: Results of Water Availability and Pressure Evaluation for CY 2017

1Q 2Q 3Q 4Q Overall
Manila Water
Total RBCs 16 16 16 16 64
RBCs with 24/7 15 * * 13 *
% Passed 94 * * 81 *
Maynilad
Total PMPs 30 24 25 24 103
PMPs with 24/16 18 10 10 12 50
% Passed 60 42 40 50 49
* Water availability and pressure compliance for 2Q and 3Q is inconclusive since majority of the data evaluated contained “no data” or “error data”
For Manila Water, findings were inconclusive because

majority of the selected RBCs contained “No data” II. CAPEX ACCOMPLISHMENT REPORT EVALUATION
or “Error Data” for Q2 & Q3 since they have a new
service provider and still in the process of migrating The use of Capital Expenditures (CAPEX) provides
its information to the server. Nevertheless, Manila funding support to rehabilitate and improve
Water has committed to make the internet-based the concessionaire’s existing infrastructure and
application accessible to RO by April 2018. equipment, ensure continuity of quality water service,
and expand customer coverage in order to support
For Maynilad, only 50 out of 103 PMPs experienced their water service obligation commitments based on
24/16 level of service. The reported water availability the CA.
and pressure maps of Maynilad are fairly inaccurate
since there are PMPs that are still not receiving 24/16. The summary of Manila Water and Maynilad’s
Pipe replacement and reinforcement, upgrading of implementation of their CAPEX programs are shown
existing pumping stations and adding new pipelines in Table 3.
are being implemented to achieve 24/16 compliance.
Table 3: Summary of CAPEX Disbursements for CY 2017

Actual Target Performance
In Php Million In Php Million
Manila Water 10,107 11,028 92%
Maynilad 10,307 10,126 102%
Note: Based on unaudited financial reports
For Manila Water, actual disbursements amounts major thoroughfares including EDSA pipe laying
to Php10,107 Million, which is only 92% of the works due to permitting issues with DPWH and
Php11,028 Million target disbursement for 2017. MMDA,
The underspending for 2017 CAPEX is caused by the b. Difficulties in clearing IFS along MWSS ROW
following: due to changes in government policy,
c. MWSS-dependent delays such as Kaliwa System
a. Deferred implementation of projects along project including land purchase and watershed

management projects, The data was submitted by Common Purpose Facilities
d. ROW and permitting issues affecting (CPF) team consisting of both Concessionaires who
implementation of used water network projects are responsible for operation and monitoring of the
in Taguig and Pasig, upstream facilities of Angat Reservoir and the facilities
e. Suspended implementation of Sumag and downstream of the auxiliary hydropower plant of
UATP projects, and Norzagaray, Bulacan, including Ipo Reservoir, the
f. Delayed implementation of the RPWSIP project Ipo-Bicti Tunnels, Bicti Basins, and Bicti-Novaliches
Aqueducts, up to and including the Novaliches Portal
For Maynilad, actual disbursements amounts to Interconnection Facilities.
Php10,307 Million, which is 102% of the Php10,126
Million target disbursement for 2017. Php7,653 The report adopted the National Water Resources
Million(75%) was disbursed to Water CAPEX while Php Board (NWRB) currently approved operational curves
2,654 Million(25%) was disbursed to Wastewater CAPEX. wherein the Angat Reservoir is divided into three (3)
zones as follows:
III. ANGAT RESERVOIR WATER LEVEL MONITORING
a. Flood Control Zone – is the reservoir storage above
It is important to monitor Angat Dam Water the normal high water levels (NHWL) which is set at
Level because it supplies about 98% of the water elevation 212 m (Dec.1- April 30) during non-flood
requirements of Metro Manila. The water from the season and elevation 210 m during flood season
Angat Dam flows directly to Ipo Dam. It then flows a (May 1-October 31),
distance of 6.4 km to Bicti, after which it passes through b. Operating Zone – is the reservoir storage bounded
five aqueducts—each about 16 km long—to the La by the NHWL and the minimum water supply level
Mesa Dam and the La Mesa Portal. From the La Mesa which is set at elevation 180 m, and
Portal, 60% of the flow goes to the nearby La Mesa c. Drought Zone – is the reservoir storage from
Treatment Plants being operated by Maynilad, out of elevation180 m and below.
which another 40% again travels a distance of 6.8 km
to the Balara Treatment Plant being operated by Manila The summary of Angat Reservoir water level with the
Water. Excess flow from the Portal goes to the La Mesa NWRB currently approved operational curves for CY
raw water reservoir. 2017 is shown in Figure 1:
Figure SEQ Figure \* ARABIC 1: Angat Reservoir Elevation vis-a-vis New Angat Reservoir
Operational Rules

For CY 2017, Angat water level started at 213.87 meters the warmest year on record driven by the El Niño phe-
on January 1 and ended at 212.62 meters on Decem- nomenon that resulted to the drop of Angat elevation
ber 31. Following the trend, the water level dropped to the drought zone. Although 2017 was one of the
continuously until July 26 wherein the lowest water top 3 warmest years even without El Niño, the water
level for 2017 was recorded at 185.55 meters. level did not recede to the drought zone.
The Angat water elevation started to recover thru IV. NON-REVENUE WATER
the second week of August with a rise of 8.4 meters
from July 26 to August 7 which can be attributed to Non-Revenue Water (NRW) measures the Concession-
Typhoon Gorio which enhanced the southwest mon- aire’s efficient operation of the system and its facilities
soon that brought torrential rainfall. It briefly dropped as well as the efficient implementation of CAPEX proj-
then rose again until the end of the year due to the ects geared towards NRW reduction.
rainy season.
The summary of NRW performance of Manila Water
It is worth noting that both CY 2015 and CY 2016 were and Maynilad for CY 2017 is shown in Table 4:
Table 4: Summary of NRW Performance of Manila Water and Maynilad for CY 2017
Manila Water Maynilad
Description
Actual Target Actual Target
Ave. Production, MLD 1,530 1,524 2,073 2,211
Ave. Billed Vol., MLD 1,337 1,341 1,405 1,548
NRW, MLD 194 183 669 663
NRW, % 12.65% 12% 32.27% 30%
Manila Water failed to meet its target for 2017, with Both Concessionaires had just finished the installation
an average NRW level of 12.65% vis-à-vis a target of of flow meters to accurately determine and calculate
12%, translating to about 194 MLD of water being the water production from WTPs. In addition, RO re-
lost in the system. This is significantly higher than quested for a dedicated data logger and modem to
last year’s average of 11.49% and NRW volume of monitor flow meter readings from the WTPs in real
171 MLD. time.
Maynilad also failed to meet its target for 2017, with For Manila Water, their proposed arrangement for the
an average NRW level of 32.27% vis-à-vis a target of provision of production data to RO will be through a
30%, translating to about 669 MLD of water being lost screen/monitor that will allow RO to view the down-
in the system. loaded data coming from the loggers. These data will
have a lag of one (1) day and will be refreshed every
However, it must be stressed that the reported NRW morning. There will be no need to provide a modem
does not yet reflect the overall NRW of Maynilad since for this setup. They forecasted its completion by April
supply volume was being measured from Bagbag 2018 and may be able to provide the data by May
Reservoir to the distribution system. 2018.
Maynilad proposed to install and rehabilitate flow me- For Maynilad, they opted to replace their existing sin-
ters from the outlet of La Mesa Treatment Plants up gle dial-out data loggers with a different brand of data
to Bagbag Reservoir. As of December 2017, the flow logger with dual sending capabilities that will trans-
metering project was already completed; henceforth, mit raw data for Maynilad and RO simultaneously in
they will be reporting their overall NRW starting CY real time. The earliest that they can install the data log-
2018. gers and modem will be until June 2018.

LEGACY 5:
ORGANIZATIONAL
EXCELLENCE
IMPLEMENTATION OF MWSS REORGANIZATION:
After the release of the Memorandum from the of civil service officers and employees in the
Executive Secretary dated 21 December 2015, the reorganization” of MWSS-CO.
MWSS Reorganization program has finally been
executed starting from the implementation of the c. To implement a uniform process in the selection
Early Retirement Incentive Package (ERIP). and placement of the best qualified and most
deserving personnel to the same or comparable
The Reorganization is a process of restructuring the positions in the GCG-approved organizational
organizational and functional set-up of an office to structure and staffing pattern (OSSP) for MWSS-
make it more viable in terms of economy, efficiency, CO.
effectiveness and make it more responsive to the
needs of its public clientele. The reorganization along The program has officially commenced on November
with the adoption of competency modelling all relates 23, 2017. Submission of voluntary ERIP applications
to the achievement of organizational excellence. Thus, was up until December 23, 2017; Placement
its objectives are, to wit: applications will be received until January 8, 2018,
after which the applications will be processed.
a. To install an optimal procedure for the
implementation of the Reorganization Program A. ERIP Application Procedure
that would ensure a smooth people transition and
minimize any disruption of service in the process The ERIP aims to improve efficiency and effectiveness
of retirement of people and their replacement by of service through the hiring of fresh and enthusiastic
qualified people to work with those who will opt blood and retaining qualified incumbent MWSS-
to stay. CO employees. Those who opted to retire can pass
on their knowledge to the next generation and will
b. To adhere to the policy of the State enshrined in finally enjoy the fruits of their labor.
RA 6656, that is, “to protect the security of tenure

ERIP availment may either be Voluntary, Provisional or falls within the Category 1 & 2 of persons with
Subsequent; Voluntary application is when one uses pending cases:
its own free will in applying; Provisional application
are for those persons with pending case/s who will Category 1: Those covered employees with pending
apply; and subsequent application are for displaced administrative cases or those presently serving
employees who may file an application even beyond administrative penalties that do not include the
the closing date of the program. penalty of forfeiture of benefits and privileges
All incumbent MWSS-CO officers and employees that Category 2: MWSS-CO officers and employees
have permanent, temporary or casual appointments; who were dismissed from the service by virtue of a
have not been declared AWOL and; have salary grades decision of the CSC, the office of the Ombudsman,
ranging from SG-1 to SG-29 can avail of the MWSS- or any tribunal of competent jurisdiction, and whose
ERIP program. dismissal is not yet final and executory.
The steps are the following: • Upon issuance of clearance to proceed, ERIPian
shall turn over all official documents and records
• Filing of Application in the Office of the in his/her custody
Administrator , after which, application will be • Recommendation for the Effective Date of
forwarded to the HRRMD Separation by the Evaluators
• Clearance for ERIP (Absolute or Provisional): • Certificate of Approval (Absolute and Provisional
Absolute means ERIPian is cleared from any Conditions): Absolute means Approving
pending case whilst Provisional means ERIPian Authority completely approved the effectivity

date of Separation from the service pursuant to and Competency requirements recognized by the
ERIP whereas Provisional means the date of ERIP Civil Service Commission, Professional Regulatory
application has been provisionally approved Commission, Supreme Court, CESB and/or TESDA.
and its status depends on the endorsement of The steps for Placement are as follows:
Approving Authority
• Approved Effective Date of Separation and • Filing of Application (Regular or Provisional)
Release of Aggregate Benefits or Denial of ERIP • Application Approval and Appointment
Application, whichever the case may be. SG 25-29 positions – will be approved by the MWSS
Board of Trustees, upon the recommendation of
B. Employee Placement Procedure: All incumbent the Administrator
MWSS-CO officers and employees that have SG 1-24 positions – will be evaluated by the
permanent, temporary or casual appointments; have concerned Department Manager, Placement
not been declared AWOL; and have salary grades Committee and the Administrator
ranging from SG-1 to SG-29 including those who have • Preparation of Appointments
pending case/s can apply for Placement. • Posting of Appointments
• If applicable, separation from service may apply
Further, the applicant should possess relevant (and subject employee may then apply for ERIP)
education and training for the position applied for,
experience and outstanding accomplishments, Placement shall be deemed irrevocable after five
physical characteristics and personality traits. The days from the issuance of Appointments to all MWSS
applicant should also possess the necessary Eligibility employees.
MWSS Table of Organization - Overview
Board of
Trustees
Board
Internal Audit
Secretariat
Office of the
Administrator
Policy, Planning and

Legal Services Public Relations
Dept. Dept.
Engineer and
Innovation and Management
Technical Operations
Technology Group Services Group
Group
Reseearch Water & Site Field Human Operations

Asset. Mgt. Finance
& Standards Sewerage Operations Operations Resources & Support
Dept. Dept.
Dev’t. Dept. Mgt. Dept. Mgt. Dept. Mgt. Dept. ODL Dept. Dept.
Approved by:
CESAR L. VILLANUEVA
Chairman

MWSS’ BULACAN WATER PROJECTGETS NOMINATION TO 2017 GLOBAL WATER AWARDS
The Bulacan Bulk Water Supply Project (BBWSP) of the water purchase agreements with the water districts
MWSS has been shortlisted for the 2017 Global Water operating in Bulacan.
Awards for Water Deal of the Year. The award is given
to projects that made the biggest contribution to the According to the organizers of the Global Water
advancement of private sector participation in the Awards, the contractor’s due diligence gave them
international water sector. valuable insight into current demand and regional
growth forecasts, allowing them to program their
The 2017 Global Water Awards was presented at the investments and predict investment needs for stage 1
Palacio de Cibeles in Madrid, Spain on 24 April 2017 as (covering municipalities of Balagtas, Bocaue, Marilao,
part of the Global Water Summit, the major business Meycauayan, Obando and San Jose del Monte) and
conference for the water industry worldwide. stage 2 (Bulacan, Calumpit, Guiguinto, Malolos,
Paombong, Plaridel, Santa Maria) of the project as
BBWSP well as the demand-triggered Stage 3 which will
bring in another 11 municipalities (Angat, Balagtas,
The Php 16.32B water project involves the supply of Baliwag, Bustos, Dona Remedios Trinidad, Hagonoy,
treated bulk water to 21 municipalities and 3 cities in Norzagaray, Pandi, Pulilan, San Miguel, San Rafael) in
Bulacan Province. The project was bidded out by MWSS 2026.
in June 2014 after getting NEDA-Board confirmation
on Nov 21, 2013. The Notice of Award was given on The prestigious annual Awards was established in
December 7, 2015 and contract signing was on Jan 15, 2006 by the Global Water Intelligence and recognizes
2016. the most important achievements in the international
water industry in the water, wastewater and
The winning contractor, a joint venture of San Miguel desalination sectors that are propelling the industry
Holdings (80%) and Korea’s K-water (20%), submitted towards improved operating performance, innovative
the lowest bid at a stunningly low bulk water charge technology adoption and sustainable financial
of Php8.50 per cubic meter and will develop the models. The other three projects that made it to the
infrastructure. The deal has no offtake agreements or shortlist were the Aqaba Desalination Plant Financing
guarantees from the MWSS but the consortium of San in Jordan, Barka 4 IWP Financing in Oman, and the
Miguel and K-Water was able to negotiate individual Vista Ridge Pipeline Financing in the United States.

MWSS ISSP (INFORMATION SYSTEMS STRATEGIC PLAN):
ROAD TO WORLD-CLASS INFORMATION TECHNOLOGY
For MWSS, the path towards adapting to the technology resources and services given the
opportunities offered by the fast evolving information increasing expansion of digital requirements every
technology world can be seen as arduous given that year. The 2013-2015 Information System Strategic Plan
only very basic applications of computer operations (ISSP) of MWSS was created in 2012 and was approved
are being performed by the current breed of and endorsed by the National Computer Center (NCC)
MWSS personnel. Confounding this, there is yet no in August of 2013. It illustrates the strategic plan for
official Information Technology unit in the current development and use of information systems. The
organizational set-up, albeit this has been addressed first stage of the implementation of the 2013-2015
in the reorganized structure. ISSP was done in the year 2015 to 2016 by procuring
up-to-date computers replacing the aging
units. However, the existing ISSP came
to a halt since priorities have to be given
to other projects. In 2017, it was decided
that the existing ISSP has to be updated.
The 2018-2020 ISSP which was prepared is
more objective and is better attuned to the
information efficiency needs of the office.
In perspective, the goals are to create a

seamless knowledge center wherein an
employee can efficiently access reliable,
scalable, easy and secure information
necessary for the daily operations of
the office. A concomitant objective is to
improve the efficiency and increase the
productivity of the employees that in
return could give relevant information
link to other government offices, provide
complete disclosure, transparency
requirements, precise and competent
information system to the public.
In this digitized world we are living in

today, the agency is gradually ensuring
It has been a requirement to all government agencies that it can adapt to the increasing demands of
and GOCC offices to submit an Information Systems technology advancement. The 2018-2020 ISSP once
Development Plan to the National Computer Center of approved and implemented will definitely elevate
the Department of Information and Communications and contribute to a world class digital economy that
Technology (DICT) to better address information our country so passionately continues to pursue.

Below shows an overview of its operational scope:
The ISSP itself has been prepared after an in-depth private agencies, enables the GCG to assess MWSS’
and careful analysis obtaining from the inputs of all operations and accomplishments and utilize such
strategic business units separately and jointly over evaluation in determining the eligibility of the Board of
some period of time. With the ISSP just needing a Director to their Performance Based Incentive (PBI) and
formal approval from the DICT, MWSS is optimistic
for the officers and employees to their Performance
that given the in-depth study and research expended
in its preparation, the ISSP will address the long- Based Bonus (PBB). The PBI and PBB are granted by the
wanted information technology status that MWSS has GCG if 90% of the Performance Scorecard targets are
been longing for. met and if 90% of all Board and Committee meetings
are attended by the Directors as validated by the GCG
through the Director’s Performance Review (DPR).
2017 MWSS PERFORMANCE The PES process starts with the annual Performance
Agreement Negotiations (PAN) between the GCG and
SCORECARD TARGETS FULLY MET the Governing Boards and Management of GOCCs,
which ultimately leads to the establishment of the
GOCC’s Performance Scorecards for the year.
In 2013, MWSS implemented the Performance
Evaluation System (PES) through a tool crafted by the It comes with a series of documentation linked to the
Governance Commission for GOCCs (GCG) called the individual employee’s performance. The proposed
Performance Scorecard. The Performance Scorecard Performance Scorecard submitted by the agency prior
which is equivalent to a Balanced Scorecard in some to the PAN comes with the following documents: a)

Strategy Map; b) Vision/Core Values/ Mission and; b) Performance Commitment Report (IPCR) which is the
Strategic Initiatives Profile /Briefer individual employee’s performance commitment for
the year. The accomplishment of the targets in the
The Strategy Map is a graphic illustration of the IPCR dictates the performance rating of the individual,
agency’s Vision and Mission as emanating from which then determines how much PBB the individual
the agency’s mandate and Charter Statement. The receives for the year.
Strategic Initiatives profile gives some details on the
agency’s major activities/projects reflected in the While we had been able to submit to the GCG our
Performance Scorecard. The Performance Scorecard Charter Statement, Strategy Map, Strategic Initiatives
states the selected projects/initiatives of the agency and proposed Performance Scorecard for 2017,
with specific targets for the year. The targets are drawing of the framework had been a challenging
weighted such as the total percentage for all the process and saw some delay due to the mass
targets is 100 percent. The Scorecard itself flows into resignation of the Board Trustees in August 2016, the
the agency’s departmental scorecards called the time the MWSS should have submitted its proposed
Office Performance Commitment Report or the OPCR 2017 Performance Scorecard to the GCG. Thus, in
which each department/functional unit creates. The lieu of a Performance Agreement between the GCG
OPCR contains the specific goals of each department and the MWSS Governing Board, the GCG prescribed
linked to the Major Final Outcomes (MFOs) or a Performance Scorecard for the MWSS-CO which
organizational goals it supports and responds was thereafter renegotiated to discuss and settle the
to. Finally, the OPCR is the basis of the Individual targets. The abridged scorecard is shown below:
Objective / Measure Weight Rating System Target Score

Augment the current water supply in light of increasing demand
30% Physical
Bulacan Bulk Water Supply 35.0% Actual / Target x Weight Accomplishment of 35%
Project (BBWSP) Construction Work
Rehabilitation of Raw Water 18% Physical
Conveyance: Angat Water 30.0% Actual / Target x Weight Accomplishment of 30%
Transmission Improvement Construction Work
Ensure Continued Water Security Legacy Framework
ADB Report on Debt Ceiling Finalization of ADB Report
and Multi-Tranche Fianncing 2.5% Actual / Target x Weight inclusive of 2.5%
Facility for MWSS Projects on MWSS’ inputs
Water Supply and Sanitation
Sustain infrastructure development in MWSS’ service delivery areas
Review and evaluation of the
Concessionaires Capex CO Submission of its
Programs under its proposed 5.0% Actual / Target x Weight Evaluation Report and 5%
Business Plan for 2018 to recommendations to the RO
2022
Ensure a More Efficient Streamlined Workforce and Processes Ready to Accomplish the Objectives of MWSS’ Water Security Legacy
ISO 9001:2015 Certification 3.0% Milestone Internal Quality Audit 0%
BOT-Approved Competency
Competency Model 10.0% Actual / Target x Weight 10%
Model
Ensure Customer Satisfaction in MWSS Service Delivery
Stakeholders’ Satisfaction 2.5% All or Nothing Satisfactory Rating 0%
Rating
Sustained Robust Financial Condition
12.0% Actual / Target x Weight 395 Million 12%
Overall Target 100% 95%

Total Performance Scorecard score during the year is 95%, or a 2.04% improvement in overall performance over
the preceding year. A summary of the scores garnered over the 5-year assessment period is shown below:
Year Percent Accomplishment

2017 95%
2016 92.96%
2015 97.5&
2014 94%
2013 98%
The good scores are not only due to the good momentum in the implementation rate of our infrastructure
roadmap, which comprise a huge chunk of the overall target, but was fueled also by organization-wide push on
financial, customer, internal business processes, and learning and growth. The 5-year record provides proof how
we are moving forward, determined on our continued survival and relevance as we shifted from the traditional
water distributor to a trustee in water security.

LEGACY 6:
PARTNERSHIP DEVELOPMENT
PREPARATIONS FOR THE 2018
CARRIEDO CUP SPORTSFEST
In commemoration of the MWSS’ forthcoming 140th
founding anniversary in February 2018, the agency
The harder part was the formulation of playing
is set to hold a friendly sports competition among
guidelines and rules for each event. Special sub-
employees of MWSS, its Concessionaires and its
committees headed by a chair were created for each
lessee agencies inside the MWSS Compound. The
event which then formulated the guidelines. After the
event is planned to commence on January 8 until
formulation of the guidelines, the Committee sought
February 2018, just in time for the proposed week-
for sponsors and scouted for venues that could be
long celebration of the 140th anniversary.
used for trainings and screening of players aside from
MWSS grounds. As of December 2017, the logistics,
Initiated by Administrator Rey Velasco and driven by
procurement, layout and design of materials are
the love of sports by the MWSS-CO team, the first step
already in the finalization stages.
in the preparations was the dissemination of official
correspondences to the heads of all participating
The Overall Sportsfest Organizers are:
agencies to secure their participation. Subsequently,
after the heads’ confirmation of their participation,
1. Ronald Abrigo : MWSS-CO
the sportsfest organizers and coordinators from the
2. Atty. Anabella Altuna : MWSS-CO
participating agencies was formed in the last quarter
3. Engr. Nestor Lualhati : MWSS-CO
of 2017. The sportsfest chairman / coordinators of
all participating agencies/teams were chosen from
The Sportsfest Coordinators are as follows:
among volunteers based on their overall sporting
experience, knowledge and aptitude, to form the
a. James Pang (Lawn Tennis) : Manila Water
Carriedo Cup Sportsfest Committee.
b. Ramon Ordono (Darts) : LWUA
c. Amado Bautista (Practical Shooting) : OGCC
The Committee then proceeded with identifying
d. Marie Antonette De Ocampo (Golf ) : Maynilad
the sporting events for the Carriedo Cup. After
e. Floirendo Batasin (Chess) : MWSS-CO
much discussion and haggling, the committee
f. Ronald Abrigo (Sungka) : MWSS-CO
decided to hold the following sporting events for
g. Melvin Arellano (Basketball) : Maynilad
the Cup: bowling, basketball, practical shooting, golf,
h. Xavier Cruz (Badminton) : Manila Water
chess, lawn tennis, sungka, darts, badminton and
i. Jojo Gamboa (Bowling) : Manila Water
photography contests.

MWSS PREPARES FOR “THE BIG ONE”
In recent years, it has been continuously reiterated
to the people of Metro Manila to be prepared for the
“Big One” which may hit the Metro anytime soon.
Scientists have attributed the prediction to a statistical
tool called a recurrence interval or average time span
between earthquake occurrences. Through this tool,
it was determined that for the West Valley Fault, four
major earthquakes have taken place in the last 1,400
years, bearing a recurrence interval of 400 to 500 years.
Since the last major earthquake originating from the
fault was recorded in 1658 or 357 years ago, the next
big one could be anytime within our lifespan. Minor
earthquakes, though, have been recorded in the fault
over the years.
Government, local government unit and the

private sector have been continuously initiating
simultaneous nationwide earthquake drills to bolster
everyone’s readiness and safety. Together with other
agencies, MWSS, as a major instrumentality of the
water sector, is tasked to prepare a Service Recovery will cause dehydration are two of the worst scenarios
Plan as part of the Contingency Preparation of Metro that can happen and these need to be addressed
Manila Disaster Risk Reduction and Management should the Big One strike. The main objective is to
Council (MMDRRMC) Disaster Preparedness Cluster be able to provide alternative source of water for the
Agencies. The role of MWSS in disaster preparedness evacuees for at least 10 days after the occurrence of
is important in the light of the damaging effects of a the earthquake. Two prospective solutions that MWSS
major earthquake to water facilities. Damage on water is proffering are the use of the mobile water treatment
facilities that can cause interruption on raw water plants and the activation of the private deep wells of
distribution and the absence of drinking water that the water districts.
ANNUAL MILLION TREE CHALLENGE PROJECT

In observance of the World Environment Day in the agencies MWSS-Regulatory Office, concessionaires
month of June 2017, a noble cause has been made Maynilad and Manila Water and agency partners
legacy when the Annual Million Tree Challenge ABS-CBN Lingkod Kapamilya Foundation, Inc. (Bantay
(AMTC) Program of MWSS was launched on 23 June Kalikasan), DENR NCR, DENR Region IV-A, DENR
2017 at the Ipo Dam Norzagaray, Bulacan. The AMTC Region III, World Wide Fund, Philippine Water Works
essentially aims to conserve and protect our water Association, Municipality of General Nakar Quezon,
sources affected by the six watersheds of La Mesa, Ipo, Wild Bird Photographers of the Philippines and the UP
Angat, Umiray, Laguna Lake and Marikina River. These Mountaineers. This project targets to plant a million
watersheds which play a major role in the sustenance trees yearly collectively by the participating agencies
of Metro Manila’s drinking water have currently in our watersheds for the next five years, nurturing
been threatened and degraded due to inhumane and safeguarding them to ensure sustainability, and
environmental activities. help protect our environment and meet the clean
and potable water supply requirements of the 25
Spearheaded by MWSS Administrator Reynaldo V. million residents in MWSS’ service area. This project
Velasco, the AMTC program has attracted our partner is also particularly significant as MWSS approaches its

140th Anniversary in February of 2018, thus instilling Photographers of the Philippines 500 trees. A planning
inspiration to people that through hard work, unity workshop was also held on 14 July 2017 at the Estancia
and care for the planet that we live in, it is really de Lorenzo, San Mateo,Rizal mainly to discuss the
possible to live a better and progressive life without partnership, advocacy, governance, implementation,
compromising the environment. reporting and monitoring guidelines of the project.
A week before the actual launching of the AMTC, As of November 2017, all of the participating agencies
a press briefing was held at MWSS Bulwagan Hall have actually planted 741,563 seedlings in total.
attended by the participating agencies who pledged The MWSS Corporate Office conducted its first and
a total of 1.5 million trees. The DENR National greening second tree planting activities at Ipo Dam Watershed,
program committed 500,000 trees, DENR NCR 30,000, in coordination with the Bantay Gubat team, on
DENR Region IVA 204,000, San Miguel Corporation September 4 and November 28, 2017, respectively.
vowed 200,000, MWSS Corporate Office 50,000, These unified efforts of the agencies will not only
MWSS Regulatory Office 20,000, Manila Water and positively impact the supply and quality of water in
Bantay Kalikasan combined for 130,000 trees, Maynilad the metro but will, as well, minimize if not prevent
130,000, PWWA at 20,000, World Wide Fund Philippines deforestation which we all know as causing flooding
at 37,000, UP Mountaineers Society 500, Municipality and alleviating natural disasters that constantly
of General Nakar, Quezon 100,000 and Wild Bird threaten our country.
Agency Commitment Planted As of the

in 2017 end of the year 2017
MWSS Corporate Office 50,000 2,000
MWSS Regulatory Office 20,000 20,000
Dept. of Environment and Natural Resources (Region III) 500,000 496,000
Dept. of Environment and Natural Resources (Region IV-A) 296,000 296,000
Dept. of Environment and Natural Resources (National Capital Region) 137,700 137,700
Manila Water Company Inc. 86,000
120,000
ALFKI (ABS-CBN Lingkod Kapamilya Foundation, Inc.) 31,600
Maynilad Water Services Inc. 130,000 130,000
World Wide Fund 37,000 43,500
UP Mountaineering 500 500
Philippine Water Works Association 20,000 2,000
Department of Education 100,000 -
Angat Hydropower Power Plant 100,000 -
Total 1,511,200 1,245,300

MWSS APPROVES NEW MOA BETWEEN CONCESSIONAIRES AND THE LOCAL
GOVERNMENT OF GENERAL NAKAR, QUEZON FOR THE PROTECTION OF THE
GENERAL NAKAR WATERSHEDS
The MWSS approved a Memorandum of Agreement signed between its Concessionaires Manila Water and
Maynilad with the Local Government Unit of General Nakar, Quezon at the MWSS Bulwagan Hall, last September
27, 2017. The MOA aims to strengthen the existing watershed management initiatives at the General Nakar
Watersheds towards long-term sustainability for the existing and future water sources projects in General Nakar
such as Sumag Diversion Project and the rehabilitation of Umiray-Angat Transbasin Tunnel Project, which are both
under the jurisdiction of the Municipality and the upcoming New Centennial Water Source – Kaliwa Dam Project.
The MWSS was a signatory of the original MOA with the LGU of Gen. Nakar, but an OGCC opinion prompted the
Board of Trustees to instead approve the version where MWSS, though not a signatory to the MOA, acts as the
oversight committee head.
The event was attended by MWSS Administrator PDDG Reynaldo Velasco, Atty. Patrick Lester Ty (Chief Regulator,
MWSS-Regulatory Office), Mr. Ronald Padua (CPF Chairman/Water Supply Ops-Maynilad), Mr. Geodino Carpio (CEO,
Manila Water) and Mayor Eliseo Ruzol (General Nakar, Quezon). Also in attendance are the Vice Mayor, councilors,
municipal administrator of General Nakar and management officials of MWSS Corporate Office, MWSS Regulatory
Office, Maynilad and Manila Water.
Mr. Ronald Padua gave the welcoming remarks, while, Mayor Eliseo Ruzol and MWSS Administrator PDDG Reynaldo
Velasco gave keynote messages. The two expressed confidence on the benefits the project will bring not only to
MWSS constituents but to the people of General Nakar as well.
MWSS TAKES PART IN CSC’S BENEFIT RUN 2017
The MWSS Corporate Office joined the 117th Philippine Civil Service Anniversary’s Benefit Run event last September
3, 2017 (Sunday) at the Quirino Grandstand Manila. The event which was organized by the Civil Service Commission
as part of their fund raising activity is dubbed R.A.C.E to Serve Run VII and aims to support the families of the
police officers killed in the battle of Marawi as well as other government employees who have died while on-duty.
The Fun Run which was categorized into 3-km, 5-km and 10-km races were attended by 50 MWSS employees
alongside 18,000 other government workers from different agencies. Also present were Health officials Sec. Paulyn
Ubial, Asec Eric Tayag and GSIS chairperson Francisco Duque III.

LEGACY 7:
COMMUNICATION AND
KNOWLEDGE MANAGEMENT
MWSS IN TALKS WITH LOCAL GOVERNMENT UNITS
FOR THE IMPLEMENTATION OF THE NCWS-KALIWA DAM PROJECT
The agency, consistent with its mandate to develop Waterworks and Sewerage System (MWSS) has been
new water sources to ensure the security and reliability constantly coordinating with the Local Government
of water supply within its service areas, has conceived Units (LGUs) in compliance with the procedural
the New Centennial Water Source – Kaliwa Dam Project requirement that project endorsements emanate from
(NCWS-KDP borne out of the necessity to ensure an the lower hierarchy of LGUs.
uninterrupted water supply in Metro Manila. Currently,
the sole source of water for Metro Manila is the Angat MWSS, as the project proponent, will execute a
Dam in Bulacan which provides some 98% of the the Memorandum of Understanding and/or Memorandum
water supply in Metro Manila. of Agreement with the LGUs, containing the terms and
conditions for the implementation of the project, as
In recent months, the activities surrounding the long well as the development assistance/benefits to be
delayed project has been earnestly fast tracked in provided which will form part of the TOR/MOA.
response to the President’s emphasis on implementing
the government’s Build-Build-Build Program before To date, the MWSS has secured the endorsements
his term ends. In this connection, the Metropolitan from the following direct stakeholders:
LGU RESOLUTION NO. ENACTED

Tanay, Rizal 01-2018 19 January 2018
General Nakar, Quezon 03-14 6 August 2014
Brgy. Pagsangahan, General Nakar, 2014-01 14 August 2014
Quezon
Brgy. Magsaysay, Infanta, Quezon 34-2015 18 March 2015
Teresa, Rizal 01-2015 10 March 2015
Baras, Rizal 01-2015 2 June 2015

The Local Government Unit of Infanta, Quezon, and the through ODA from the Government of the People’s
Provincial Governments of Quezon and Rizal have yet to Republic of China. The change in project funding from
issue their respective endorsements. Public-Private Partnership (PPP) to Official Development
Assistance (ODA) was approved by the NEDA Board on
The proposed New Centennial Water Source – Kaliwa 27 June 2017.
Dam Project (NCWS – KDP) involves the design and
construction of a dam with a discharge capacity of 600 The NCWS-KDP is among the projects prioritized by the
million liters per day (600 mld) and a 27.7-kilometer raw Department of Finance (DoF), the Department of Budget
water conveyance tunnel, with a project cost estimate and Management (DBM) and the National Economic
of PhP12,200,014,025.35. The proposed dam will be Development Authority (NEDA) for funding under
located in Barangay Pagsangahan, General Nakar, the China Bilateral Loan Agreement of government.
Quezon (left bank) and in Barangay Magsaysay, Infanta, This Project is one of the flagship initiatives of the
Quezon (right bank), while the raw water conveyance Government under its “Build, Build, Build” program.
tunnel traverses the mountain areas of Tanay, Baras and
Teresa in the Province of Rizal. MWSS exercises full transparency in its infrastructure
endeavors and, as such, continues to stick to its water
The Project was initially approved by the NEDA Board legacy plan in amplifying the role of stakeholders for
on 29 May 2014 as a PPP Project. However, MWSS was water security. It endeavors to further develop among
asked to consider Official Development Assistance its diverse constituencies the appreciation for water and
(ODA) funding and to re-evaluate the Project which water resources, taking cognizance of and addresses the
the MWSS Board subsequently approved. As a result, possible effects to the residents affected by the project
the Project will now be implemented and funded and on ecotourism.

THE MWSS’ COFFEE TABLE BOOK
A book launching by former President Fidel for Bulacan, this book will be authored and
V. Ramos in April of 2017 held at the MWSS published by Media Touchstone Ventures, Inc.
lobby instigated the idea of creating a president Melandrew Velasco and will serve as
commemorative coffee table book for the a gift or legacy for the 140 years of dedication
celebration of the 140th founding anniversary of MWSS employees who have served and
of MWSS in Feb of 2018. The initial concept worked hard for the water industry. In addition,
of the coffee table book is to illustrate the this publication will hopefully showcase the
humble beginnings of the public water success of MWSS’ Privatization through the
supply for the city of Manila in 1878 to its Concession Agreements, which have become
gradual evolution as the Metropolitan Water a prototype of sorts to other ASEAN countries.
District (MWD), National Waterworks and
Sewerage Authority (NAWASA), Metropolitan MWSS is hopeful that together with the start of
Waterworks and Sewerage System in 1971, the new administration, this commemorative
and finally, its privatization in 1997 until the book will signify the rebranding of MWSS,
current operations. something that will enhance its image in the
perception and eyes of the scrutinizing water
With the guidance of Administrator Gen. Velasco consuming public. The book, which is targeted
and support of the Concessionaires Manila for completion and dissemination in time for
Water Company Inc. (MWCI), Maynilad Water the 140th MWSS Anniversary on February 2018
Services Inc. (MWSI) and now the Luzon Clean will also be a reference document for educating
Water Development Corporation (LCWDC) the future generations of water consumers.
MWSS INSTITUTIONAL VIDEO’S GROUNDWORK

MWSS is gearing up as early as the second Project (AWTIP) and the New Centennial Water
quarter of 2017 for its forthcoming 140th Supply- Kaliwa Dam Project (NCWS-KDP).
founding anniversary in February of 2018. Other undertakings are also to be presented
One part of the preparation is the making such as the A Million Tree Challenge(AMTC)
of a short institutional video that aspires to program, the Palafox Masterplan of the Balara
showcase the history of public water supply area which is currently under works.
since the time of Carriedo, the acknowledged
father of the MWSS, during the Spanish era, Just like the Coffee Table Book, this video
through its evolution in the following years aims to educate the public through a better
until what it is now today. The video will also understanding and appreciation of the role
present the ongoing big-ticket projects of of MWSS in nation building by providing for
MWSS and its Concessionaires such as the water security now and in the future, and to
Bulacan Bulk Water Supply Project (BBWSP), bolster the sagging image of MWSS gotten
Angat Water Transmission Improvement through bad press over the years.

FINANCIAL REPORT
Republic of the Philippines
COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City
ANNUAL AUDIT
REPORT
ON THE
Metropolitan Waterworks and Sewerage System
For the Year Ended December 31, 2017

EXECUTIVE SUMMARY
A. Introduction
Metropolitan Waterworks and Sewerage System (MWSS)
1. Republic Act (R.A.) 6234 dated June 19, 1971 created MWSS to ensure an
uninterrupted and adequate supply and distribution of potable water for domestic and
other purposes at just and equitable rates. Based on its original Charter, MWSS has
jurisdiction, supervision and control over all waterworks and sewerage systems within
Metro Manila, the entire province of Rizal and a portion of Cavite. R.A. 8041 or the
National Water Crisis Act of 1995 and implemented by Executive Order No. 286 on
December 6, 1995 and Executive Order No. 311 on March 20, 1996 allowed MWSS to
enter into arrangements that will result in the involvement or participation of the private
sector in any or all of the segments, operations and/or facilities of the MWSS.
2. On 21 February 1997, the retail distribution of water was privatized through the
Concession Agreement entered into with Manila Water Company, Inc. (East Zone) and
Maynilad Water Services, Inc. (West Zone).
Scope and Objectives of Audit
3. The audit was conducted to determine the (a) level of assurance that may be placed on
the Management’s assertions on the financial statements; (b) the propriety of
transactions compliance with existing rules and regulation as well as Management’s
policies; and (c) the extent of the implementation of prior years’ audit recommendations.
A value-for-money audit was also conducted on the MWSS-Corporate Office’s
contractual obligation over the operation and management of the Umiray Facilities and
on the payment of security services rendered by the contracted security agency,
Catalina Security Services, Inc.
4. The audit covered the operation and accounts of the MWSS for CY 2017 and was
conducted in accordance with the International Standards of Supreme Audit Institutions.
B. Financial Highlights
Financial Position
(In Billion Pesos)
2017 2016 Increase
As Restated (Decrease)
Assets 57.789 58.172 (0.383)
Liabilities 12.555 13.170 (0.615)
Equity 45.234 45.002 0.232
Results of Operations
(In Billion Pesos)
2017 2016 Increase
As Restated (Decrease)
Income 2.473 2.838 (0.365)
Expenses 1.575 1.862 (0.287)
Net income from Operations 0.898 0.976 (0.078)
Losses, net 0.100 0.510 (0.410)
Net Income 0.798 0.466 0.332
During the year, MWSS generated net income from operations, before gain (loss) on
disposed assets and foreign exchange, of P0.898 billion lower by P.078 billion or 8 percent
than the previous year’s restated net income.

MWSS paid dividend of P233 million in CY 2017 to the Bureau of the Treasury pertaining to
the full payment of dividend for CY 2016.
C. Auditor’s Opinion
The Auditor rendered an adverse opinion on the fairness of presentation of the financial
statements for the year ended December 31, 2017 due to the material impact of MWSS’
non-adoption of Philippine Public Sector Accounting Standards (PPSAS) as its financial
reporting framework. The financial statements of the MWSS are materially misstated due to
the following:
1. Recognition of the Appraisal Capital Stock with year-end balance of P28.428 billion due
to revaluation of the MWSS properties in prior years and realization of Appraisal Capital
Stock to Retained Earnings totaling P7.955 billion;
2. The reported year-end balance of the Other Receivables account amounting to

P5.611 billion was unreliable due to the inclusion of disputed claims by MWSI consisting
of borrowing cost amounting to P4.048 billion despite its uncertainty of collection; and
3. Turned-over MWSS properties to the two Concessionaires amounting to P67.280 billion

per Inventory Report, upon privatization in CY 1997, were not reclassified as Service
Concession Assets. Further, subsequent construction, development, acquisition, and
upgrade of the service concession assets were not accounted for in the books.
4. The existence of unreconciled/unverified, abnormal/negative and dormant balances

totaling P1.788 billion affects the reliability and accuracy of total asset and liability
account balances contrary to Sections 111 and 114(2) of PD No. 1445.
D. Summary of Other Significant Audit Observations and Recommendations
Below is a summary of other significant audit observations and recommendations which are
discussed in detail in Part II of the Report.
MWSS Corporate Office
1. Material variance of P1.924 billion existed between the book balances of domestic and
foreign loans payable and the confirmed balance by the Bureau of the Treasury (BTr).
The issue on the JBIC/OECF loan as a grant/equity from the National Government
remained unresolved resulting to non-remittance to the BTr of the accumulated P2.014
billion collections from the two Concessionaires for the payment of the aforementioned
loan.
Recommendations:
a. Require the Finance Department to reconcile the variances/discrepancies in the Loans

Payable account with the BTr to present fairly the financial position of the agency and
provide explanation on the non-repayment of IBRD 1272; and
b. Set a definite period to settle/reconcile with the BTr on the issue of the JBIC/OECF
loan and if found that it is indeed a loan, remit immediately to the BTr the amount
collected from the Concessionaires as payment for the loan; and
ii

2. Unreconciled net variance of P1.002 billion on Property, Plant and Equipment – General
Administrative Equipment (PPE-GAE) and P776.271 million on Land and Land Rights
between the records of Accounting and Property Management Departments.
Recommendation:
Reconcile the noted variances between the records of Accounting and Property
Management Departments in accordance with COA Circular No. 80-124 and effect
necessary adjustments.
3. The Advances to Contractors account year-end balance totaling P851.809 million,

P278.402 million (net) or 33 percent remained unrecouped/outstanding for more than four
(4) years which deprived MWSS of additional funds for operation, contrary to Section 5.3
Annex E, RIRR of RA 9184.
Recommendations:
a. Analyze the advances to contractors account and determine the causes of the
negative balances, and effect the necessary adjustments to reflect the correct and
accurate book balances;
b. Initiate legal action against the contractors to recoup the advances; and
c. Blacklist the contractors who have outstanding advances from MWSS.
MWSS Regulatory Office
4. Notices of Disallowance with issued Notice of Finality of Decision (NFD) amounting to

P78,508,955.76 was not recorded in the books as of year-end, contrary to Section 22.6 of
COA Circular No. 2009-006, dated September 15, 2009 re: Rules and Regulations on
Settlement of Accounts (RRSA).
Recommendations:
a. Record as Receivables the amount of P78,508,955.76 as of December 31, 2017; and
b. Cause the immediate settlement and payment of the disallowances by persons found
liable pursuant to Sections 7.1.1 and 7.1.3, Chapter II, of the RRSA.
5. Loans amounting to P25.000 million granted to MWSS-RO Multi-Purpose Cooperative for

land development and house construction remained with the Cooperative in spite the
non-realization/accomplishment of the project, has incomplete documentation and failed
the public purpose test as required under Sections 4 (6) and 4 (2) of PD 1445.
Recommendation:
Take legal action against the MWSS–RO Multi-Purpose Cooperative to collect or ensure
the refund of the seed money including all accruing interest from CY 2005 up to the
present.
6. Receivables totaling P1.091 million from separated/retired officers/employees

representing Motor Vehicle Loans remained outstanding for more than 10 years, contrary
to the Loan Contracts.
iii

Recommendation:
Take the appropriate legal action to recover the unpaid receivables from the
separated/retired employees in order to protect its interest and more importantly recover
public funds.
7. Loan amortization arrears totaling P0.544 million from six (6) former employees with
receivable balance of P2.542 million as of year-end have not been collected, in violation
of the provision of the Loan Contract, thus depriving MWSS-RO of funds which can be
used for other public purposes.
Recommendations:
a. Take legal action to immediately collect the P544,261.10 arrears or the entire loan
balance consistent with the loan contract and revisit its policy on any accommodation
or arrangements in the payment amortizations thru post-dated checks; and
b. Require the immediate settlement of all loans from resigning employees to avoid
exposure of the agency from absconding employees, as in these instant cases.
8. MPLP Loan amortization (Housing and Car Loan) of 21 current employees amounted to
P17,500.00 for CY 2017 or a measly .002% of the total amount due of P7,394,947.91,
grossly disproportionate collection rate compared to their capacity to pay resulting to
arrearages without interest or penalties, contrary to the provisions of the Loan Contract
and to the detriment of public interest.
Recommendations:
a. Re-evaluate/revisit the paying capacity of concerned employees vis-a-vis their actual

net pay to date so that loans are fully paid within the period stipulated in the contracts;
and
b. Invoke the Deed of Assignment in case of Motor Vehicle loan defaults where the
MWSS-RO is authorized to collect the proceeds from the employees’ salaries,
bonuses, insurance, benefits and other emoluments to ensure the full payment of the
loan.
E. Summary of Total Suspensions, Disallowances and Charges issued
Status MWSS – MWSS –

Corporate Office Regulatory Office
Notice of Disallowances which are final and P13,369,520.31 P91,963,268.95
executory
Audit Disallowances/Charges with Pending 330,014,333.03 114,255,503.36
Appeal with the Cluster 3/ Commission Proper
or Without Appeal Received but Appeal Period
has not yet Expired
Total P343,383,853.34 P206,218,772.31
iv

F. Status of Implementation of Prior Years’ Audit Recommendations
Out of the 115 audit recommendations embodied in CY 2016 Annual Audit Report, 16 were
implemented, 24 were partially implemented and 75 were not implemented The audit
recommendations not implemented were reiterated in Part II of this Report. Details were
presented in the Status of Implementation of Prior Year’s Audit Recommendations under
Part III.

4

METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM
STATEMENT OF FINANCIAL POSITION
As at December 31, 2017
(With Comparative Figures as at December 31, 2016)
(In Philippine Peso)
Notes 2017 2016

(As Restated)
ASSETS
Current Assets
Cash and cash equivalents 5 3,800,628,654 3,354,816,433
Accounts receivables, net 6 555,406,033 558,703,250
Other receivables 7 5,611,129,196 5,623,459,516
Prepayments 8 906,591,037 895,582,470
Total Current Assets 10,873,754,920 10,432,561,669
Non-Current Assets
Property, plant and equipment, net 9 44,252,357,407 45,242,421,078
Construction in progress 10 759,296,700 677,033,489
Investments 11 414,758,634 401,877,646
Other assets, net 12 1,488,448,792 1,417,830,752
Total Non-Current Assets 46,914,861,533 47,739,162,965
Total Assets 57,788,616,453 58,171,724,634
LIABILITIES
Current Liabilities
Payable accounts 13 1,291,124,519 983,220,426
Inter-agency payables 14 152,796,525 149,921,643
Intra-agency payable 0 1,125,075
Long-term liabilities 15 795,965,648 766,669,889
Other liability accounts 16 526,723,636 528,945,896
Total Current Liabilities 2,766,610,328 2,429,882,929
Non-Current Liabilities
Long-term liabilities 15 7,925,966,333 8,898,844,365
Deferred credits 17 1,862,169,532 1,840,979,556
Total Non-Current Liabilities 9,788,135,865 10,739,823,921
Total Liabilities 12,554,746,193 13,169,706,850
Net Assets (Total Assets Less Total Liabilities) 45,233,870,260 45,002,017,784
NET ASSETS/EQUITY
Capital Stock 18 6,095,486,784 6,095,486,784
Doanated Capital 19 1,046,970,979 1,046,970,979
Appraisal Capital Stock 20 28,427,903,790 28,427,903,790
Accumulated Surplus 31 9,663,508,707 9,431,656,231
Total Net Assets/Equity 45,233,870,260 45,002,017,784
5

The notes on pages 11 to 43 form part of these statements.

STATEMENT OF FINANCIAL PERFORMANCE
(With Comparative Figures for the Year Ended December 31, 2016)
Notes 2017 2016

(As Restated)
INCOME 21
Concession fees
Debt service 1,184,496,125 1,554,341,919
Concession income 1,010,981,807 993,105,901
Progress billing 23,991,333 53,035,195
2,219,469,265 2,600,483,015
Business income
Interest on investments and deposits 61,172,698 67,432,385
Rental of leased properties 107,711,144 95,679,346
Raw water 83,283,360 74,428,065
Miscellaneous income 1,546,067 215,391
Other fines and penalties 0 3,230
253,713,269 237,758,417
2,473,182,534 2,838,241,432
EXPENSES
Personnel Services 22 140,200,824 119,622,529
Maintenance and other operating expenses 23 112,876,275 101,104,198
Non-cash expenses 24
Depreciation 987,199,405 1,119,411,070
Amortization 6,161,066 8,122,603
Financial expenses 26 321,648,364 502,784,890
Losses 27 100,276,148 510,654,789
1,668,362,082 2,361,700,079
Surplus/(Deficit) Before Tax 804,820,452 476,541,353
Income Tax Expense 29 6,821,254 10,798,509
NET SURPLUS for the Period 797,999,198 465,742,844

STATEMENT OF CHANGES IN NET ASSETS/EQUITY
Accumulated Donated Appraisal

Capital Stock Total
Surplus/(Deficit) Capital Capital Stock
BALANCE AT JANUARY 1, 2016 8,965,942,557 6,095,486,784 1,046,970,979 36,382,889,359 52,491,289,679
ADJUSTMENTS
Add (Deduct):
Changes in accounting policy 0 0 0 0 0
Prior period errors (29,170) 0 0 0 (29,170)
Other adjustments 0 0 0 0 0
RESTATED BALANCE AT JANUARY 1, 2016 8,965,913,387 6,095,486,784 1,046,970,979 36,382,889,359 52,491,260,509
Changes in Net Assets/Equity for CY 2016

Add (Deduct):
Surplus/(Deficit) for the period 465,742,844 0 0 0 465,742,844
Dividends 0 0 0 0 0
Other Adjustments 0 0 0 (7,954,985,569) (7,954,985,569)
BALANCE AT DECEMBER 31,2016 9,431,656,231 6,095,486,784 1,046,970,979 28,427,903,790 45,002,017,784
Changes in Net Assets/Equity for CY 2017

Add (Deduct):
Surplus/(Deficit) for the period 797,999,198 0 0 0 797,999,198
Dividends (559,768,131) 0 0 0 (559,768,131)
Other Adjustments (6,378,591) 0 0 0 (6,378,591)
BALANCE AT DECEMBER 31,2017 9,663,508,707 6,095,486,784 1,046,970,979 28,427,903,790 45,233,870,260
ANNUAL REPORT 2017

83
STATEMENT OF CASH FLOWS
(With Comparative Figures for the Year Ended December 31, 2016)
Note 2017 2016

(As Restated)
CASH FLOWS FROM OPERATING ACTIVITIES

Collection of concession fees 2,229,427,355 2,670,757,020
Collection of business income 197,506,915 178,748,002
Other collections 111,746,450 147,269,430
Payment of borrowing cost (193,699) 0
Payment of operating expenses (288,479,075) (273,434,807)
Other expenditures (10,329,886) (10,872,886)
Net Cash Provided by Operating Activities 2,239,678,060 2,712,466,759
CASH FLOWS FROM INVESTING ACTIVITIES

Payment to Province of Bulacan for ADDSP (24,940,000) (504,610,000)
Investments in special reserve fund (73,547,138) (18,447,277)
Capital expenditures (68,159,999) (564,307,977)
Net Cash Used in Investing Activities (166,647,137) (1,087,365,254)
CASH FLOWS FROM FINANCING ACTIVITIES

Loan proceeds 38,847,393 505,001,691
Debt servicing
Principal (1,122,682,670) (1,222,537,614)
Interest and other charges (310,796,251) (406,669,686)
Payment of prior year's dividends to National Government (232,632,763) (150,000,000)
Net Cash Used in Financing Activities (1,627,264,291) (1,274,205,609)
Net Increase in Cash and Cash Equivalents 445,766,632 350,895,896
Effects of Exchange Rate Changes on Cash and Cash Equivalents 45,589 947,517
Cash and Cash Equivalents, January 1 3,354,816,433 3,002,973,020
Cash and Cash Equivalents, December 31 5 3,800,628,654 3,354,816,433

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS
For The Year Ended December 31, 2017
Budgeted Amounts Actual Amounts Difference of

Particulars on Comparable Final Budget and
Original Final Basis Actual Amounts
RECEIPTS
Concession Fee
Concession Income 1,147,871,000 1,010,981,807
Debt Service 1,080,263,000 1,184,496,125
Progress Billing 17,348,000 23,991,333
Business Income 201,173,000 253,713,269
Other Non-Operating
Receipts
Loan Proceeds 232,383,000 38,847,393
Others 352,000,000
Total 3,031,038,000 3,005,451,000 2,512,029,927 (493,421,073)
PAYMENTS
Personnel Services 316,748,000 252,787,000 140,200,824 (112,586,176)
Maintenance and Other 2,183,735,000 1,930,012,000 1,745,728,392 (184,283,608)
Operating Expenses
Capital Outlay 504,968,000 504,968,000 68,159,999 (436,808,001)
Total 3,005,451,000 2,687,767,000 1,954,089,215 (733,677,785)
NET RECEIPTS 317,684,000 557,940,712 240,256,712

NOTES TO FINANCIAL STATEMENTS
For the year ended December 31, 2017
(In Philippine Pesos)
1. Corporate Information
The Metropolitan Waterworks and Sewerage System (MWSS), a government-owned

and controlled corporation, was created under Republic Act No. 6234 which was
approved on June 19, 1971 replacing the National Waterworks and Sewerage Authority.
MWSS is an attached agency to the Department of Public Works and Highways. Its
main objective is to ensure an uninterrupted and adequate supply and distribution of
potable water for domestic and other purposes to its consumers at just and equitable
rates. It also aims to provide sewerage and sanitation services to the public. MWSS
owns and has jurisdiction over all waterworks and sewerage system of all the cities and
municipalities of Metro Manila, and some municipalities of Cavite and Bulacan.
Because of the felt need for the government to adopt urgent and effective measures and
to address the nationwide water crisis which adversely affected the health and well-
being of the public, legislators passed into law Republic Act No. 8041, otherwise known
as the National Water Crisis Act of 1995, implemented under Executive Order No. 286
dated December 6, 1995, which reorganized the MWSS. The passage of Executive
Order No. 311 on March 20, 1996 encouraged the private sector’s participation in the
operation of the facilities of MWSS and paved the way for its privatization.
Pursuant to a process of a competitive public bidding and selection, MWSS’ operations

were privatized. Thus, on February 21, 1997, MWSS entered into a Concession
Agreement (CA) with two private companies (Concessionaires), namely, the Manila
Water Company Incorporated (MWCI), and the Maynilad Water Services Incorporated
(MWSI), granting them the rights to manage, operate, repair, decommission, and
refurbish the Facilities in the Service Area, including the right to bill and collect for water
and sewerage services supplied in the Service Area. MWCI operates on the east zone
while MWSI services the west zone the two concessionaires formally took over the
operations of MWSS on August 1, 1997. In addition to the performance of the service
obligations, the concessionaires are required, under the CA, to pay MWSS concession
fees in consideration for such right.
As a result of the privatization in 1997, MWSS is now divided into two Offices, the
MWSS-Corporate Office (CO) and the MWSS-Regulatory Office (RO).
On March 8, 2001, due to financial difficulties, Maynilad suspended payment of

concession fees. From March 2001 to July 2001, MWSS used its own funds to meet the
maturing obligations of Maynilad. Thereafter, from July 2001 to 2006, MWSS had to
obtain a number of loans from various banks and financial institutions to meet its
maturing obligations and expenses which the (unpaid) concession fees from Maynilad
were supposed to cover.
Despite continuous negotiations, several disputes between Maynilad and MWSS led the
former to issue a “Notice of Early Termination of the Concession” on December 9, 2002.
On January 7, 2003, MWSS arbitration proceedings commenced and on November 7,
2003, the Appeals Panel for Major Disputes ruled that (1) there was no MWSS or
Concessionaire Event of Termination under Article 10 of the CA; (2) the parties should
10

continue to perform their obligations under the CA until the expiration thereof; and (3)
MWSS may draw on the USD120 million Performance Bond. The Arbitration Order
became final on November 22, 2003.
During the pendency of the corporate rehabilitation proceedings, and prior to the
drawing on the USD120 million Performance Bond, MWSS had to seek funding from
other sources to meet its maturing obligations and operating expenses. As a result, on
March 16, 2004, MWSS with the Republic as Guarantor, and BNP Paribas, entered into
a Subscription Agreement wherein BNP Paribas agreed to subscribe to the MWSS-BNP
Notes.
On April 29, 2005, Maynilad submitted to the Rehabilitation Court its 2005 Rehabilitation
Plan incorporating the terms and conditions of the Debt and Capital Restructuring
Agreement (DCRA) executed between Maynilad, MWSS, Benpress Holdings
Corporation, the Suez Group, and other lenders. On June 1, 2005, the Rehabilitation
Court approved the 2005 Rehabilitation Plan, including the DCRA.
Under Clause 2.6 of the DCRA, MWSS was given the right to subscribe to 83.97 percent
of the shares of Maynilad. On September 8, 2005, the MWSS Board of Trustees
resolved to assign the MWSS Subscription Rights pursuant to Clause 24 of the DCRA.
After going through the process of competitive public bidding, DMCI-MPIC Water
Company, Inc. (DWCI) was awarded the MWSS Subscription Rights and the right to
acquire receivables of MWSS, subject to the conditions imposed under the DCRA. On
December 27, 2006, MWSS and DWCI entered into an Assignment and Assumption
Agreement (AAA) to formalize the award.
In accordance with the AAA, DWCI, decided to effect the early exit of Maynilad from
rehabilitation proceeding by contributing cash to the latter and enabling the latter to
prepay, among others, its obligations to MWSS under the DCRA. To implement this,
DWCI entered into a Prepayment and Settlement Agreement (PSA) with Maynilad,
MWSS, the Suez Group, and other lenders on August 9, 2007.
Thereafter, Maynilad, MWSS, the Suez Group, and other creditors of Maynilad filed a
Joint Omnibus Motion dated August 14, 2007. Acting on the Joint Omnibus Motion, the
Rehabilitation Court issued an order dated December 19, 2007 (1) immediately
approving the PSA, (2) declaring that Maynilad had successfully implemented the 2005
Rehabilitation Plan subject to the fulfillment of certain conditions, and (3) disallowing the
disputed or unresolved claims of MWSS and the Suez Group. On February 6, 2008, the
Rehabilitation Court issued another order confirming the December 19, 2007 Order,
declaring that the conditions in its previous order have been met, and releasing
Maynilad from the corporate rehabilitation proceedings.
During the 11th year of the implementation of the Concession Agreement (CA), the
Parties, MWSS, MWCI and Maynilad (under a new Sponsor, DMCI) identified and
discussed the option of renewing/extending the CA pursuant to the following
government policies:
a. To increase investments in water and wastewater improvement projects, to pursue

the mandate of the government to accelerate wastewater projects, to comply with
the Clean Water Act and the recent Supreme Court decision for the cleanup and
preservation of Manila Bay, and sufficient concession fees to support the
implementation of new water source projects as enumerated in the Final Business
Plan; and
11

b. To mitigate the impact on tariff increases through the renewal/extension of the CA.
On October 19, 2009, the Department of Finance (DOF) transmitted to the MWSS, the
signed letter of Consent and Undertaking in behalf of the Republic the approval of
extension of the CA of MWCI to an additional of 15 years from May 7, 2022 to
May 6, 2037.
On March 17, 2010, the DOF thru the MWSS, again transmitted the signed Letter of
Undertaking in behalf of the Republic another approval of 15 years’ extension of the CA
of Maynilad from May 6, 2022 to May 6, 2037.
The Term Extension committed the Concessionaires to increase by 100 percent the
concession fees (Corporate Operating Budget or COB) of the MWSS Corporate Office
and the Regulatory Office.
CY 2013 Rate Rebasing
In CY 2013, Rate Rebasing (RR) was performed which served as basis for reviewing the
performance as well as to determine the new business plan that the MWCI and MWSI
will undertake. The exercise will also ensure that notwithstanding the changes in the
economic and operating assumptions, both concessionaires will be able to recover all its
expenditures (Opex, Capex and Income Taxes), plus guaranteed rate of return. As such,
the exercise will serve as one of the major drivers of tariff adjustments under the CA.
Section 9.2 of the CA provides that the Standard Rates for water and sewerage services
shall be adjusted each year effective January 1 of each Charging Year. In accordance
with (i) the Rate Adjustment Limit set forth in Section 9.2.1, (ii) the adjustment principles
set forth in Section 9.2.2, and (iii) the procedures set forth in Section 9.2.3.
Rata Adjustment Limit (RAL) is defined as the percentage, either positive or negative,
equal to the sum of “C” or the percentage change in the Consumer Price Index, “E” or
Extraordinary Price Adjustment, and “R” or the Rate Rebasing Convergence
Adjustment.
Manila Water Company, Inc. (MWCI)
On March 30, 2012, the Concessionaire filed a petition for the determination of its “R:”
factor for the 3rd RR, proposing an upward adjustment of 22.79 percent of its average
basic water charge or P5.83 per cubic meter (cu.m.) beginning January 1, 2013.
After careful study, the MWSS Board of Trustees resolved and adopted the
recommendation of the MWSS-RO:
a. To deny Manila Water’s petition for an upward adjustment of its average basic water
charge; and
b. To approve and effect a negative adjustment of 29.47 percent of its 2012 average
basic water charge of P24.57 per cu.m. to be implemented in five equal tranches of
negative 5.894 percent per Charging year.
MWCI objected to MWSS RR determination and commence arbitration under the 1976
United National Commission on International Trade Law Arbitration Rules, in the case
12

entitled Manila Water Company, Inc. vs MWSS and MWSS-RO which was subsequently
docketed with the International Chamber of Commerce as Case No. UNC 136/CYK.
On February 27, 2015, the MWSS-RO received a copy of the Partial Award in
International Chamber of Commerce (ICC) Case No. UNC136/CYK. The dispositive
portion reads:
a. Corporate Income Tax (CIT) is not allowed Expenditures under the CA;
b. The Appropriate Discount Rate should not be computed fully pre-tax; and
c. Each Party is to bear its own legal and other costs. The cost of the arbitration
including the fees and expenses of the Appeals Panel are to be borne equally by
MWSS and MWCI.
On April 21, 2015, the MWSS-RO received a copy of the Final Award in ICC Case No.
UNC136/CYK. The dispositive portion reads:
a. Affirm that the parties have reached agreement on the RR Adjustment after taking to
account the Partial Award dated February 26, 2015;
b. Order that the RR Adjustment for the period 2013 to 2017 be set as a negative
adjustment of 11.05 percent of MWCI’S 2012 average basic charge of P25.07 per
cu.m. or negative P2.77 per cu.m. to be implemented in five equal tranches of
negative 2.21 percent per charging year, pursuant to Article 9.4.3 (ii) of the CA; and
c. Order that each party is to bear its own legal and other costs.
On April 30, 2015, the MWSS-RO transmitted its Resolution No. 2015-0905-CA to the
MWSS Board of Trustees containing the MWCI’s determination of 2015 Rate
Adjustment Limit as follows:
a. To set the 2015 RAL of Manila Water at negative 2.42 percent to be applied on the
prevailing basic charge; and
b. To recommend the publication of the 2015 Table of Standard Rates for Manila Water
pursuant to the requirement under Section 12 of the MWSS Charter that such “rates
and fees shall be effective and enforceable fifteen (15) days after publication in a
newspaper of general circulation.
Board Resolution No. 2015-058-RO dated May 8, 2015 resolved, approved and confirm
the above recommendation. The Rate Adjustment of Manila Water took effect
June 1, 2015.
Maynilad Water Services, Inc. (MWSI)
On March 30, 2012, the Concessionaire filed a petition for the determination of its “R”:
factor for the 4th Rebasing Period (2013-2017), proposing an upward adjustment of
24.69 percent of its average basic water charge or P7.41 per cu.m. beginning
January 1, 2013.
On September 14, 2012, Maynilad revised their proposed rate adjustment to 34.06
percent of its average basic charge – or an equivalent increase of P10.31 per cu.m.
13

Pending the final determination of the “R”, Maynilad in a letter dated November
26, 2012, sought an interim rate increase of at least 20 percent of P2.06 per cu.m. of the
anticipated “R” based on its September 2012 Business Plan. The MWSS Board of
Trustees, upon the recommendation of the MWSS-RO in Resolution No. 2012-010-CA
dated December 3, 2012, declined Maynilad proposed interim rate increase, but allowed
the “C” factor of 3.2 percent.
After careful study, the MWSS Board of Trustees resolved and adopted the
recommendation of the MWSS-RO:
a. To deny Maynilad’s petition for an upward adjustment of its 2012 average basic
water charge;
b. To approve and effect a negative adjustment of 4.82 percent of its 2012 average
basic water charge of P30.28 per cu.m. to be implemented in five equal tranches of
negative 0.964 percent per Charging year; and
c. Discontinuance of the CERA.
Maynilad objected to MWSS RR determination and commence arbitration under the

1976 United National Commission on International Trade Law Arbitration Rules, in the
case entitled Maynilad Water Services, Inc. vs MWSS and MWSS-RO which was
subsequently docketed with the ICC as Case No. UNC 141/CYK.
Maynilad argued that the MWSS-RO erred in the RR Determination and enumerated the
following grounds for its objection to and disagreement with the same:
a. Unauthorized disallowance of corporate income tax;
b. Incorrect estimate of the ADR for Future Cash Flows (FCF);
c. Unauthorized adjustments to the Opening Cash Position (OCP) set during the last
RR;
d. Improper addition of Guaranty Deposits to Maynilad’s historical and future receipts;

unreasonable and improper disallowances in other expenditures in the OCP; and
e. Unreasonable and improper adjustment to other expenditures in the FCF.
On December 29, 2014, the Appeals Panel in the Maynilad dispute promulgated its Final
Award as follows:
a. By majority, finds that the Maynilad is entitled to include its Corporate Income Tax
(CIT) in its Future Cash Flows for each year of operation;
b. By majority, upholds Claimant’s alternative Rebasing Adjustment for the 4th RR

Period of 13.41 percent, which means an average basic water charge of P30.28 per
cu.m. resulting in an adjusted rate of P34.34 per cu.m for every charging year of the
4th RR Period;
c. Unanimously decides that each Party shall bear its own legal costs and that the
costs of the arbitration shall be borne by the Parties equally;
14

d. Unanimously orders Respondents to reimburse to Claimant the sums of
USD15,012.50, Php540,502.81, and HKD179.73, representing Respondents’ share
of the costs of the arbitration that were advanced by the Claimant; and
e. Dismiss all other claims.
Finding the conclusion reached by the Appeals Panel in the Maynilad Dispute as directly
in contrast to the conclusions reached in the MWCI Dispute, the MWSS Board of
Trustees after thorough deliberation of the MWSS-RO and Maynilad, granted the
request of Maynilad on certain terms in the implementation of the Rate Adjustment as
follows:
1. Consistent with the MWSS-RO Resolution No. 2012-010-CA dated December

3, 2012 and MWSS Board Resolution No. 2012-165 dated December 7, 2012,
Maynilad shall receive the “C” factor of the RAL pending the final resolution of the
“R”;
2. Consistent with MWSS-RO Resolution No. 13-008-CA dated September 6, 2013 and
MWSS Board Resolution No. 2013-100-RO dated 2013-100-RO dated September
12, 2013, Maynilad shall no longer collect CERA;
3. Consistent with MWSS-RO Resolution No. 2015-004-CA dated March 25, 2015 and
MWSS Board Resolution No. 2015-039-RO dated March 31, 2015, Maynilad will not
charge the CIT component of its alternative “R: pending a more definite ruling by a
court of justice on the CIT issue; and
4. Consistent with MWSS-RO Resolution No. 2014-002-CA dated December 17, 2014
and MWSS Board Resolution No. 2013-129-RO dated December 12, 2014, which
restored the FCDA adjustments, the proposal will bring regularity to the rate
adjustment mechanism under the CA.
On May 14, 2015, MWSS Board Resolution No. 2015-060-RO resolved, approved and
confirmed the resolutions of the MWSS-RO as follows:
a. To set the 2015 RAL for Maynilad at 7.52 percent be applied on the prevailing basic
charge;
b. To implement the discontinuance of the charging the CERA; and
c. To recommend the publication of the 2015 Table of Standard Rates for Maynilad
pursuant to the requirement under Section 12 of the MWSS Charter that such “rates
and fees shall be effective and enforceable fifteen (15) days after publication in a
newspaper of general circulation”.
The Rate Adjustment of Maynilad will take effect June 1, 2015.
Meanwhile, the issue on the CIT now elevated to the Supreme Court (SC) is an urgent
and real issue for the SC to decide. Early resolve for the issue at hand was manifested.
15

SOURCES OF FUNDS
The following are the sources of funds of MWSS:
 Concession fees collected

 Rentals on leased properties
 Interest income on investments
 Loan availments from foreign and domestic financial institutions
 Collection of raw water and accounts receivable
 Other incidental revenues
STRATEGIC INITIATIVES AND WATER SECURITY LEGACY BUBBLE
Water Security Legacy (WSL) Roadmap – MWSS is driven by the Water Security
Legacy Roadmap and is composed of seven legacies to help ensure a more holistic,
long-term and sustainable approach to water service for Metro Manila and its outskirts.
These legacies are:
a. Legacy 1– Water Resources and Infrastructure Management, Development and

Protection
b. Legacy 2 – Water Distribution Efficiency
c. Legacy 3 – Sewerage and Sanitation Compliance
d. Legacy 4 – Water Rates Reviews and Rationalization
e. Legacy 5 – Organization Excellence
f. Legacy 6 – Partnership Development
g. Legacy 7 – Communication and Knowledge Management
Strategic Initiatives – MWSS–CO hereby commits to undertake the following key

programs and/or projects identified as having a significant impact on its Performance
Scorecard:
a. Strategic Initiative 1 – New Centennial Water Supply Source Project (NCWSP) -

Kaliwa Dam Project (P12.2 billion)
 Fund Source: Private Proponent under PPP scheme ODA-China
 Involves the financing, design and construction of a raw water supply source
with a capacity of 600 MLD, through the commissioning of the Kaliwa Dam,
including intake facilities and other pertinent facilities.
 Part of the Project is a water conveyance tunnel intended to supply 2,400 MLD
of raw water for Metro Manila, thereby reducing heavy dependence on the Angat
Dam reservoir.
 Status: There is an on-going coordination with DOF relative to the procurement

guidelines for the Limited Competitive Bidding among the three (3) Chinese
contractors provided by the China Ministry of Commerce, pursuant to the
bilateral arrangement between the Government of the Philippines and China;
On-going preparation of bidding documents; on-going coordination with DPWH
relative to their participation to construct the access roads for the Project; On-
going coordination with the LGUs and concerned agencies relative to their
endorsements and issuance of required clearances. Indicative Timeline: Date of
16

construction – 2nd Quarter of 2018 (Detailed Engineering Design); 1st Quarter of
2019 (construction dam); 1st Quarter of 2019 (construction – conveyance tunnel)
while Target completion Date is 4th Quarter of 2018 for Detailed Engineering
Design; 4th Quarter of 2021 for Construction dam and 4th Quarter of 2023 for
construction of conveyance tunnel.
b. Strategic Initiative 2 – Bulacan Bulk Water Supply Project (BBWSP) (P16.32 billion)
 Funding Source: Private Proponent under PPP scheme
 Aims to provide clean and affordable treated water, will be implemented in three
stages, covering 24 water service providers (WSPs) serving 21 municipalities
and three cities in Bulacan.
 Involve the development of surface water source facilities and new groundwater
sources; provision of water treatment facilities and lift and booster pump
stations; and the installation of new conveyance/transmission lines, among
others.
 Status: Bidded out in October 2015 with SMC K-Water Consortium as the
winning proponent. As of November 30, 2017, the on-going construction works
(water treatment plant and conveyance facilities) has an actual over-all physical
accomplishment of 33.03 percent. Implementation Schedule: Date of Start for
Stage 1 & 2 is April 2017; Target Completion date for Stage 1 is October 2018
while for Stage 2 is April 2019.
c. Strategic Initiative 3 – Angat Water Transmission Improvement Project (AWTIP)

(US$133.98 million)
 Funding Source: Loan and GOP counterpart funded by Concession Fees
 Aims to improve the reliability and security of the Angat raw water transmission
system through the rehabilitation of existing conveyance and appurtenances
from Ipo Dam to the La Mesa Treatment Plant.
 Involves the construction of an additional tunnel, which will allow the alternate
closing of older tunnels and aqueducts in the conveyance system. This will
enable the conduct of necessary inspection and rehabilitation of portions of the
systems without interrupting the transmission of water.
 Status: Bidded out in March 2016 and the winning bidder is Cooperativa
Muratori & Cementisti – C.M.C. Di Ravenna Societa’ Cooperativa. As of
November 30, 2017, the on-going construction works has an over-all physical
accomplishment of 22.41 percent; procurement of consultants for the
construction management is on-going. Implementation Schedule: Date of start
is June 1, 2016 and target completion date is September 7, 2020.
d. Strategic Initiative 4 – Angat Dam and Dykes Strengthening Project (ADDSP)

(P5.719 billion)
 Fund Source: National Government
17

 Involves the strengthening of the dam/dyke & auxiliary spillway, installation of
flood forecasting and warning system on dam operation and flood protection
works to ensure structural integrity of the dam and dyke and to increase dam
storage capacity.
 Aims to mitigate risks as a result of the dam being on the West Valley Fault. It
will include the installation of flow forecasting and warning systems beneficial to
downstream towns and cities.
 Status: Instead of MWSS, the strengthening works of the dam and dyke will be
implemented and funded by Korea Water Resources Corporation, now
registered as Angat Hydropower Corporation (AHC), the new Owner/Operator of
the Angat Hydro-electric Power Plant (AHEPP), pursuant to their contract
obligation to undertake mandatory rehabilitation of Angat Dam. However,
contract packages 2 & 4 of ADDSP in the total cost of P553.30 million remains
to be the responsibility of the government, thus, MWSS, as allowed by the DBM
and NEDA, transferred the funds directly to the agency mandated to implement
contract packages 2 & 4, which are the NPC and the PGB, respectively.
Corresponding MOAs were executed for the subject transfer of funds and its
implementation. As of November 30, 2017, the construction works for
Strengthening works is on-going with 71.76 percent actual physical
accomplishment as of December 12, 2017 being undertaken by Hanjin, the
contractor engaged by AHC; On Dam instrumentation, all seven (7) contract
packages were already awarded and are now on-going. This is being
implemented by NPC as per MOA; On Flood protection works; Construction is
on-going wherein 9 out of 10 contract packages were already completed. This
is being implemented by PGB as per MOA.
 Indicative Timeline: Started construction in November 2, 2016 and completion

date is March 12, 2018 for Strengthening works while for Dam instrumentation;
July 29, 2016 is the start date and completion date is January 30, 2018.
e. Strategic Initiative 5 - Rehabilitation, Operation and Maintenance of MWSS-owned

Auxiliary turbines 4 and 5 of the Angat Hydro-Electric Power Plant (AHEPP)
 Funding Source: Private Proponent under PPP Scheme
 The Project involves the opportunity to optimize the benefit from the MWSS-
owned auxiliary turbines 4 & 5 by developing the hydropower generation
component, a “by-product” of water releases.
 Status: After the discussion/consultation with NEDA, the Project will now be
subjected to second bidding through Public-Private Partnership (PPP) scheme
under the BOT Law (RA 7718), as originally approved by the NEDA Board. Said
second bidding was already approved by MWSS Board; there is an on-going
review of bidding and other related documents.
f. Strategic Initiative 6 – Sumag Diversion Project
 Funding Source: Concessionaire’ Fund through the Common Purpose Facility

(CPF)
18

 Aims to provide additional raw water (188 MLD) from Sumag River in Gen.
Nakar, Quezon which will be diverted to Umiray Tunnel to augment water supply
in Angat Dam.
 The proposed project involves the construction of appurtence structures of

Tyrolean Type Weir, Intake, Desilting Basis with Sluice Way, Transition
Channel, Cut and Cover, Tunnel (600 linear meters with 2.70 meters’ diameter),
Open Channel and Intrasite Access connecting to the UATP.
 Status: The Supplemental MOA by and amongst MWSS, MWCI, MWSI and
LGU General Nakar on watersheds protection and management was signed by
the parties on September 27, 2017, and witnessed by MWSS Corporate and
Regulatory Office. This Supplemental MOA is related to the Sumag and Umiray
Rehab Projects and is a condition of LGU General Nakar prior to the lifting of the
suspension; lifting of the Cease and Desist Order (CDO) was issued by LGU
General Nakar during the meeting held at MWSS Office on November 21, 2017;
the contractor is preparing some documentation works prior to resumption of
contract works.
g. Rehabilitation of Umiray Facilities
 Funding Source: Concessionaire Fund’ through the CPF
 Rehabilitation and strengthening of existing tunnel structures/facilities to

withstand future typhoons in order to ensure the continuous flow of raw water
from the Umiray River to the Angat Reservoir.
 Status: In view of the lifting of the Cease and Desist Order (CDO), the
contractor for this Project is also preparing some documentation works prior to
resumption of contract works.
h. Strategic Initiative 7 – MWSS Reorganization
 MWSS Corporate Office has an approved Reorganization based on GCG

Memorandum Circular No. 2013-17.
 The process started late 2017 and placement of positions to the new
Organizational Structure set up is being implemented. It is expected that by the
2nd Quarter of 2018, positions are filled up and those who availed of the Early
Retirement Incentive Package (ERIP) are paid.
i. Strategic Initiative 8 – Customer Satisfaction Survey
 The ultimate customers of both MWSS and Concessionaires are the general
public to whom it serves potable water and sewerage and sanitation services in
its service area. This is a system for obtaining feedback from our direct
customers. The UP-CIDS did the study in 2016 and final report was presented
to the new Board last March 2017.
Board Resolution No. 2018-070-CO dated May 24, 2018 authorized the issuance of the
Financial Statements of MWSS pursuant to Section 8 (g) of Republic Act No. 6234, the
MWSS Charter.
19

2. Basis of Financial Statement Preparation
The accompanying financial statements have been prepared in accordance with

applicable Philippine Accounting Standards as aligned with the International Financial
Reporting Standards using the historical cost basis and are presented in Philippine
pesos, which is the MWSS’s functional and presentation currency. The financial
statements of the MWSS Corporate Office and the Regulatory Office are consolidated in
this report.
3. Changes in Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year.
These accounting standards are as follows:
 PAS 1, Presentation of Financial Statements, (a) provides a framework within which

an entity assesses how to present fairly the effects of transactions and other events;
(b) provides the base criteria for classifying liabilities as current or non-current;
(c) prohibits the presentation of income from operating activities and extraordinary
items in the statement of income; and (d) specifies the disclosures about key sources
of estimation, uncertainty and judgments management has made in the process of
applying the company’s policies.
 PAS 2, Inventories, reduces the alternatives for measurement of inventories by

disallowing the use of the last in, first out formula. Moreover, the revised accounting
standards does not permit foreign exchange differences arising directly on the recent
acquisition of inventories invoiced in foreign currency to be included in the cost of
purchase of inventories.
 PAS 7, Statement of Cash Flows, provides information about the cash flows of an
entity which is useful in providing users of financial statements with basis to assess
the ability of the entity to generate cash and cash equivalents and the needs of the
entity to utilize those cash flows.
 PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, (a)

removes the concept of the fundamental error and the allowed alternative to
retrospective application of voluntary changes in accounting policies and
retrospective restatement to correct prior period errors; (b) updates the previous
hierarchy of guidance to which management refers and whose applicability it
considers when selecting accounting policies in the absence of standards and
interpretations that specifically apply; (c) defines materials omission or
misstatements; and (d) describes how to apply the concept of materiality when
applying accounting policies and correcting errors.
 PAS 10. Events after the Balance Sheet Date, provides a limited clarification of the
accounting for dividends declared after the balance sheet date.
 PAS 16, Property, Plant and Equipment, (a) provides additional guidance and
clarification on recognition and measurement of items of property, plant and
equipment (b) requires the capitalization of the costs of asset dismantling, removal or
restoration as a result of either acquiring or having used the asset for purposes other
20

than to produce inventories during the period; and (c) requires measurement of an
item of property , plant and equipment acquired in exchange for a non-monetary
asset or a combination of monetary and non-monetary assets at fair value, unless
the exchange transaction lacks commercial substance. Under the previous version
of the standard, an entity measured such an acquired asset at fair value unless the
exchanged assets were similar.
 PAS 17, Leases, prescribes for lessees and lessors, the appropriate accounting
policies and disclosures to apply in relation to leases.
 PAS 18, Revenue, prescribes the accounting treatment of revenue arising from
certain types of transaction and events. The primary issue in accounting for revenue
is determining when to recognize revenue.
 PAS 19, Employee Benefits, prescribes the accounting and disclosure for employee
benefits. It requires an entity to recognize: (a) a liability when an employee has
provided service in exchange for employee benefits to be paid in the future; and (b)
an expenses when the entity consumes the economic benefit arising from service
provided by an employee in exchange for employee benefits.
 PAS 21, The Effects of Changes in Foreign Exchange Rates eliminates the
deferral/capitalization of foreign exchange differentials. The adoption of the standard
resulted in the recognition of gain or loss on foreign exchange transactions.
 PAS 23 (Revised), Borrowing Costs, prescribes that borrowing costs that are directly
attributable to the acquisition, construction or production of a qualifying assets shall
form part of the cost of that asset. Other borrowing costs are recognized as an
expense. The main change is the removal of the option of immediately recognizing
as an expense borrowing costs that are directly attributable to the acquisition,
construction or productivity of a qualifying asset. A qualifying asset is one that takes
a substantial period of time to get ready for use or sale. An entity is therefore
required to capitalize such borrowing costs as part of the cost of the asset. The
standard does not require the capitalization of borrowing costs relating to assets
measured at fair value, and inventories, even if they take a substantial period of time
to get ready for use or sale. The standard applies to borrowing costs relating to
qualifying assets for which the commencement date for capitalization is on or after
January 1, 2009.
 PAS 36, Impairment of Asset, establishes frequency of impairment testing for certain
intangibles and provides additional guidance on the measurement of an asset’s
value in use.
 PAS 37, Provisions, Contingent Liabilities and Contingent Assets, ensures that
appropriate recognition criteria and measurements bases are applied to provisions,
contingent liabilities and contingent assets and that sufficient information is disclosed
in the note to enable users to understand their nature timing and amount.
 PAS 38, Intangible Assets outlines the accounting requirements for intangible assets,
which are non-monetary assets which are without physical substance and identifiable
(either being separable or arising from contractual or other legal rights). Intangible
assets meeting the relevant recognition criteria are initially measured at cost,
subsequently measured at cost or using the revaluation model, and amortized on a
systematic basis over their useful lives (unless the asset has an indefinite useful life,
21

in which case it is not amortized). If recognition criteria of these intangible item does
not meet both the definition of and the criteria for recognition as an intangible asset,
PAS 38 requires the expenditure on this items to be recognized as an expenses
when it is incurred.
 PAS 40, Investment Property applies to the accounting for property (land and/or
buildings) held to earn rentals or for capital appreciation (or both). Investment
properties are initially measured at cost and, with some exceptions. May be
subsequently measured using a cost model or fair value model, with changes in the
fair value under the fair value model being recognized in profit or loss.
 FRS 30, Heritage Assets, applies to all heritage assets that are held and maintained
by an entity principally for their contribution to knowledge and culture. Heritage
assets can be historical, artistic, scientific, geophysical or environmental qualities.
The FRS sets our new disclosure requirements for the reporting of heritage assets,
which apply whether or not they are reported in the balance sheet.
4. Summary of Significant Accounting Policies
Cash and Cash Equivalents
Cash in bank earns interest at the respective authorized government depository bank
rates. Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash with original maturities of three months or less
from dates of acquisition and that are subject to an insignificant risk of changes in
values. Cash equivalents are for varying period of up to three months depending on the
immediate cash requirements of the MWSS, and earn interest at the respective
investment rates. Due to the short term nature of the transaction, the fair value of cash
and cash equivalents and short term investment approximates the amount at the time of
initial recognition.
Receivables
Receivables are recognized and carried at original billed amount. Provision for doubtful
accounts on water/sewer accounts receivable prior to privatization is maintained at a
level considered adequate to provide for potential losses on receivables. The level of
this provision or allowance is based on management’s evaluation of collection
experience and other factors that may affect collectability.
Property, plant and equipment
Property, plant and equipment (PPE) were either Retained Assets which are those
assets that are retained by MWSS at the start of the Concession, Allocated Assets
which are those assets assigned to the two Concessionaires, the MWSI and MWCI, and
the Common Purpose Facility (CPF) assets.
PPE are stated at cost and fair market value.
Depreciation of PPE commences once the properties become operational and available
for use, and are calculated on a straight-line basis over the estimated useful lives of the
property, plant and equipment.
22

Minor repairs and maintenance costs are expensed when incurred, while major repairs
and/or those repairs that will prolong the useful lives of the assets are capitalized.
When property and equipment are retired or disposed of, the cost and the related
accumulated depreciation, amortization and accumulated provision for impairment
losses, as the case may be, are removed from the accounts and any resulting gain or
loss is recognized in profit or loss.
The useful lives and the depreciation and amortization methods are reviewed
periodically to ensure that they are consistent with the expected pattern of consumption
of the future economic benefits embodied in the items of property, plant and equipment.
An oil painting by H.R. Ocampo “Abstract in Red and Black” and the water color painting
“Rooster” by Kiukok, both declared National Artists of the Philippines are listed in the
PPE. These have yet to be registered in the Philippine Registry of Cultural Property of
the National Museum per IRR of RA 10066 otherwise known as The Cultural Heritage
Act of 2009.
Construction in-progress
Construction in-progress is stated at cost. While the construction is in progress, project

costs are accrued based on the contractors’ accomplishment reports and billings. These
represent costs incurred for technical services and capital works program contracted by
the MWSS to facilitate the implementation of the project. While the construction of the
project is in progress, no provision for depreciation is recognized.
Construction in-progress is transferred to the related Property, Plant and Equipment

account when the construction or installation and related activities necessary to prepare
the property, plant and equipment for their intended use have been completed, and the
property, plant and equipment are ready for service.
Long-term foreign loans
Long-term foreign loans are recorded in peso based on the exchange rate at the time of
withdrawal and are revalued at the end of each reporting date.
Impairment of financial assets
An assessment is made at each reporting date to determine whether there is any

indication of impairment of assets, or whether there is any indication that an impairment
loss previously recognized for an asset in prior years may no longer exist or may have
decreased. If any such indication exists, the asset’s recoverable amount is estimated.
An asset’s recoverable amount is calculated as the higher of the asset’s value in use or
its net selling price.
An impairment loss is recognized only if the carrying amount of an asset exceeds its
recoverable amount. An impairment loss is charged to operations in the year it arises.
If, in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment was
recognized, the previously recognized impairment loss is reversed. Any subsequent
reversal of an impairment loss is recognized in profit or loss, to the extent that the
carrying value of the asset does not exceed its amortized cost at the reversal date.
23

A previously recognized impairment loss is reversed only if there has been a change in
the estimates used to determine the recoverable amount of an asset, however, not to an
amount higher than the carrying amount that would have been determined had no
impairment loss been recognized for the asset in prior years. In 2004, an impairment
loss was recognized by MWSS for the Umiray-Angat Transbasin due to damages
caused by typhoons. Since said impairment was effected in the books only in 2005, it
was charged directly to Retained Earnings of that year.
Leases
A lease where the lessor retains substantially all the risk and benefits of ownership of
the asset is classified as an operating lease.
Revenue recognition
All Concession fees billed/collected/received from the Concessionaires are treated as

operating revenue.
Concession fees – Debt Service and Progress Billings are concession fees received
from the Concessionaires that are intended for MWSS loan amortization and payments
to contractors/suppliers, respectively. These are pass-on payment without any margin in
favor of MWSS. Concession Fee – COB is the annual Current Operating Budget being
paid by the concessionaires to MWSS for administrative expenditures subject to annual
Consumer Price Index adjustment.
Foreign currency-denominated transactions
Foreign currency-denominated transactions are recorded using the exchange rate at the
date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated using the closing exchange rate at reporting date. Foreign
exchange gains and losses arising from foreign currency fluctuations are recognized in
profit or loss for the period.
Subsequent events
All post year-end events up to the date the financial statements are authorized for issue
that provide additional information about the MWSS’s position at reporting date
(adjusting events) are reflected in the financial statements. Any post year-end event
that is material and not an adjusting event is disclosed in the Notes to the Financial
Statements.
Borrowing costs
Borrowing costs are generally expensed as incurred. Borrowing costs that are directly
attributable to the acquisition, development, improvement and construction of fixed
assets (including costs incurred in connection with rehabilitation works) are capitalized
as part of the cost of the asset. The capitalization commences when the activities to
prepare the asset are in progress and expenditures and borrowing costs are being
incurred. Capitalization of borrowing costs ceases when substantially all activities
necessary in preparing the related assets for their intended use are complete.
24

Judgments and use of estimates
The preparation of the accompanying financial statements in conformity with PFRS

requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. The estimates and
assumptions used in the accompanying financial statements are based upon
management’s evaluation of relevant facts and circumstances as of the date of the
financial statements. Actual results could differ from such estimates.
Use of estimates
Key assumptions concerning the future and other sources of estimation and uncertainty
at the balance sheet date that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year are discussed
below.
Estimating allowance for doubtful accounts
The MWSS maintains allowances for doubtful accounts at a level considered adequate
to provide for potential losses on receivables. The level of this allowance is based on
management’s evaluation of collection experience and other factors that may affect
collectability. The amount and timing of recorded expenses for any period would,
therefore, differ depending on the judgments and estimates made for the year.
Estimated useful lives of property, plant and equipment
The MWSS estimates the useful lives of its property, plant and equipment based on the
period over which the assets are expected to be available for use. The MWSS reviews
annually the estimated useful lives of property, plant and equipment based on factors
that include asset utilization, internal technical evaluation, technological changes,
environmental and anticipated use of the assets tempered by related industry
benchmark information. It is possible that future results of operation could be materially
affected by changes in the MWSS’s estimates brought about by changes in the factors
mentioned.
Contingencies
Contingent Liabilities are not recognized in the financial statements. They are disclosed
unless the possibility of an outflow of resources embodying economic benefits is remote.
Contingent assets are not recognized in the financial statements but are disclosed when
an inflow of economic benefits is probable. Contingent assets are not recognized unless
virtually certain.
5. Cash and Cash Equivalents
2017 2016
(As Restated)
Cash on Hand 633,575 426,210
Cash in Bank – Local Currency, Current Account 475,396,701 64,158,806
Cash in Bank – Local Currency, Savings Account 6,199,562 5,435,150
Cash in Bank – Local Currency, Time Deposits 3,315,307,889 3,266,756,620
25

Cash in Bank – Foreign Currency, Savings 54,642 54,410
Accounts
Cash in Bank – Foreign Currency, Time Deposits 3,036,285 17,985,237
3,800,628,654 3,354,816,433
Cash on Hand consist of the amount of collection with the Cash Collecting Officers,
amount of cash advances granted to designated Regular/Special Disbursing Officers for
payment of authorized official expenditures subject to liquidation and cash granted to
Petty Cash Custodians for payment of authorized petty and miscellaneous expenses
which cannot be conveniently paid thru check.
Cash in Bank - Local Currency, Current Account consist of cash in local currency
deposited in current account with the Land Bank of the Philippines (LBP) which earn
interest at respective bank deposit rates. The increase was due to collection of MWCI
Current Operating Budget for CY 2018 amounting to P260.83 million and increase in
Regulatory Office’s funds from unutilized COB.
Cash in Bank - Local Currency, Savings Account consist of cash in local currency
deposited in savings account with the Development Bank of the Philippines (DBP) and
LBP which earn interest at respective bank deposit rates.
Cash in Bank - Local Currency, Time Deposits consist of placements in local currency
time deposits with DBP and LBP are made for varying period.
Cash in Bank - Foreign Currency, Savings Account represents balances of cash in

foreign currency, deposited in savings account with the Bureau of Treasury and LBP.
Cash in Bank - Foreign Currency, Time Deposit consist of placements in foreign

currency time deposit with LBP. The decrease was brought about by the Regulatory
Office’ time deposits set aside for sinking fund.
6. Accounts Receivables, net
This account consists of:
2017 2016
(As Restated)
Trade/business
Receivables from customers-water/
sewer, including raw water accounts 1,126,210,924 1,125,313,278
Receivables from concessionaires 421,225,215 424,699,591
1,547,436,139 1,550,012,869
Allowance for doubtful accounts (1,117,001,777) (1,117,001,777)
430,434,362 433,011,092
Non-trade receivables
Intra-agency receivables 0 961,524
Inter-agency receivables 18,890,052 14,051,876
Due from officers and employees 31,285,641 34,549,829
Loans receivables 48,116,202 48,983,363
Interest receivables 5,082,918 5,548,708
103,374,813 104,095,300
26

Unreconciled Balances 21,596,858 21,596,858
555,406,033 558,703,250
Receivables from customers-water/sewer, including raw water accounts represent the

balance of accounts receivables prior to the privatization of MWSS in the amount of
P1.117 billion, the collection of which is highly improbable. Thus, Management set-up
the provision for bad debts account for the same amount. Meanwhile, Management is
presently considering the process of writing-off the account in accordance with the
required procedures, such as the congressional approval.
Receivables from concessionaires represent concession fees for Current Operating
Budget, Debt Service and Progress Billing that are outstanding as of balance sheet date.
Inter-agency receivables represent collectibles from other government agencies such as

the Department of Public Works and Highways (DPWH), Office of the Government
Corporate Counsel (OGCC), Supreme Court, Manila International Airport Authority
(MIAA), Local Water Utilities Administration (LWUA) and the City of Manila for office
rental, electric and water bills. Some of these accounts are classified as dormant.
7. Other Receivables
This account consists of the following:
2017 2016
Receivables from MWSI 5,432,234,484 5,445,333,994
Receivables from MWCI 163,997,996 163,865,610
Others 13,788,361 13,151,557
Unreconciled Balances 1,108,355 1,108,355
5,611,129,196 5,623,459,516
Details of the Receivables from MWSI and MWCI are as follows:
2017 2016
(As Restated)
MWSI
Cost of borrowings 3,952,833,428 3,952,833,428
Penalty on delayed remittance of Concession fees 1,118,315,274 1,118,315,274
Inventory held in trust 158,479,798 158,479,798
Penalty for non-payment of borrowing costs 95,246,566 95,246,566
Guarantee Deposits 82,712,512 94,996,518
Mabuhay Vinyl 4,993,546 4,993,546
LMG Chemphil 4,627,025 4,627,025
Other receivables 15,026,335 15,841,839
5,432,234,484 5,445,333,994
MWCI
Guarantee Deposits 65,583,130 65,583,130
Inventory held in trust 82,438,412 82,438,411
LMG Chemphil 7,730,290 7,730,290
La Vista 591,347 591,347
Other receivables 7,654,817 7,522,432
163,997,996 163,865,610
27

Cost of borrowings include the principal, interest and finance charges such as bank
conversions, documentary stamps, cable charges and penalties. MWSS is still pursuing
the disputed claims on cost of borrowings from Maynilad Water Co., Inc. relative to the
BNP Paribas loan.
Penalty on delayed remittance of Concession fee is disputed by MWSI. On December

19, 2007, the Rehabilitation Court issued an order, Special Proceeding No. Q-03-071
disallowing the penalty and the Order was confirmed on February 6, 2008. MWSS has
requested the Commission on Audit in a letter dated February 13, 2012 requesting
approval for the dropping out of the subject account from the books based on the order
of the rehabilitation court.
Inventory held in trust represents costs of inventories turned-over to the concessionaires

upon commencement of the Concession Agreement. Under Section 16.12 of the
Concession Agreement, upon the expiration of the Concession, the Concessionaires
shall transfer to MWSS the inventory having a value (adjusted for CPI) at least equal to
the Inventory made available to the Concessionaire on the Commencement Date.
Guarantee deposits are customer deposit prior to the privatization of MWSS. The
amounts were withheld by the two concessionaires from the collection of accounts
receivable from water and sewer services of MWSS on the onset of the privatization
where the two concessionaires were authorized to collect. Management and the two
concessionaires went into reconciliation to arrive at the amount of guarantee deposit to
be refunded to MWSS, where MWCI refunded the amount of P6.6 million in 2011 while
MWSI the amount of P12.284 million in August 2017.
8. Prepayments
2017 2016
Advances to suppliers/contractors 777,917,087 778,929,154
Prepaid Expenses 32,160,825 20,140,192
Unreconciled balances 96,513,125 96,513,124
906,591,037 895,582,470
Advances to suppliers/contractors include the balance of the 15 percent mobilization

costs paid to the contractors/suppliers/consultants of civil works/goods/consultancy
services, subject to periodic recoupment during the billing period and project
implementation.
The increase in Prepaid Expenses was brought about by two percent expanded
withholding tax charged by MWSI from their payment of COB for CYs 2016 and 2017.
28

9. Property, Plant and Equipment, net
The details of property, plant and equipment (PPE) are as follows:
Building, Plant
Equipment and Office Furniture
Transmission and Other Transportation Land & land
Lines Equipment Equipment Improvements Total
Cost
January 1, 2017 67,443,049,000 869,916,482 580,031,788 19,983,346,859 88,876,344,129
Additions/Capitalization 71,071 1,204,658 0 0 1,275,729
Reclass/Transfers 0 (11,563,081) (1,296,796) 0 (12,859,877)
67,443,120,071 859,558,059 578,734,992 19,983,346,859 88,864,759,981
Add: Unreconciled
Balances 23,691,892 302,409,685 15,506 (10,319,400) 315,797,683
Reclass/Adjustment 0 (43,495,453) 0 0 (43,495,453)
23,691,892 258,914,232 15,506 (10,319,400) 272,302,230
December 31, 2017 67,466,811,963 1,118,472,291 578,750,498 19,973,027,459 89,137,062,211
Accum. Depreciation
January 1, 2017 42,433,442,198 748,683,354 473,960,225 0 43,656,085,777
Depreciation
Additions 981,067,424 2,941,896 2,608,172 0 986,617,492
Reclass/Transfer (11,319,986) (1,167,116) 0 (12,487,102)
43,414,509,622 740,305,264 475,401,283 0 44,630,216,167
Add: Unreconciled
Balance 21,322,703 273,068,870 (756,616) 0 293,634,957
Reclass/Adjustment (39,146,320) 0 (39,146,320)
21,322,703 233,922,550 (756,616) 0 254,488,637
December 31, 2017 43,435,832,325 974,227,814 474,644,665 0 44,884,704,804
Carrying Amount
December 31, 2017 24,030,979,638 144,244,477 104,105,833 19,973,027,459 44,252,357,407
Cost
January 1, 2016 67,506,753,553 831,153,933 534,114,761 27,930,631,753 96,802,654,000
Additions 9,725,655 7,920,818 0 17,646,473
Reclass/Transfers (73,430,208) 30,841,731 48,649,738 73,430,208 79,491,469
Transfers/Capitalization 0 0 0 (8,020,715,102) (8,020,715,102)
Disposal 0 0 (2,732,711) 0 (2,732,711)
67,443,049,000 869,916,482 580,031,788 19,983,346,859 88,876,344,129
Add: Unreconciled
balances 23,691,892 352,655,970 48,665,244 (10,319,400) 414,693,706
Reclass/Adjustments 0 (50,246,285) (48,649,738) 0 (98,896,023)
23,691,892 302,409,685 15,506 (10,319,400) 315,797,683
December 31, 2016 67,466,740,892 1,172,326,167 580,047,294 19,973,027,459 89,192,141,812
Accum. Depreciation
January 1, 2016 41,400,531,215 716,675,026 416,025,225 0 42,533,231,466
Depreciation
Additions 1,098,640,516 4,160,878 16,609,676 0 1,119,411,070
Adjustments 0 0 0 0 0
Reclass/Transfers (65,729,533) 27,847,450 43,784,764 0 5,902,681
Disposal (2,459,440) 0 (2,459,440)
42,433,442,198 748,683,354 473,960,225 0 43,656,085,777
Add: Unreconciled
balances 21,322,703 318,290,527 43,028,148 0 382,641,378
Reclass/Adjustments 0 (45,221,657) (43,784,764) 0 (89,006,421)
21,322,703 273,068,870 (756,616) 0 293,634,957
December 31, 2016 42,454,764,901 1,021,752,224 473,203,609 0 43,949,720,734
Carrying Amount
December 31, 2016 25,011,975,991 150,573,943 106,843,685 19,973,027,459 45,242,421,078
29

10. Construction-in-Progress
The movements in this account are as follow:
2017 2016
Balance, beginning 220,014,750 160,218,665
Additions/New Project 82,263,211 63,477,629
Transfers/capitalization/Reclassification (3,681,544)
Balance, end 759,296,700 677,033,489
The increase in Construction in Progress was due to the implementation of Angat Water
Transmission Improvement Project (AWTIP) in Norzagaray, Bulacan that involves the
design and construction of new tunnel (Tunnel No. 4) along MWSS’ existing tunnel No. 1
from Ipo to Bigte in Norzagaray, Bulacan.
11. Investments
2017 2016
Held to maturity/Special reserve fund 412,234,466 399,353,478
Stocks and bonds
MERALCO stocks 2,151,518 2,151,518
PLDT investment plan 372,650 372,650
414,758,634 401,877,646
Held to maturity/Special reserve funds are investments in Fixed Rate Treasury Bonds
with varying yield to maturity/interest rates and coupon rates, which will mature from
CYs 2016 to 2017 with settlement amount ranging from P100,000 to P29,430,649.50.
The special reserve fund with the Bureau of Treasury, which is intended as guarantee
for the financial obligations of MWSS during the concession period, was established in
pursuance to Article 2.1 of the Memorandum of Agreement (MOA) between the
Department of Finance and MWSS.
12. Other Assets, net
2017 2016
(As Restated)
Unserviceable assets 715,423,514 715,331,998
Research and development 6,212,055 6,212,055
MWSS Share in Angat Dam construction 0 6,161,066
Garnished accounts 10,613,512 10,613,512
Guarantee deposits 10,828,425 10,728,425
Dormant accounts 688,359,479 688,359,479
Restricted Fund 76,587,590 0
30

Unreconciled balances (19,575,783) (19,575,783)
1,488,448,792 1,417,830,752
Unserviceable assets are the costs of land, construction materials and supplies that can
no longer be used in projects due to obsolescence or assets which are no longer
operational.
Restricted Fund is the amount set aside by Regulatory Office for sinking fund.
13. Payable accounts
2017 2016
(As Restated)
Accounts payable 31,846,080 39,808,928
Interest payable 173,058,968 183,185,438
Dividends Payable 539,224,749 212,089,381
Due to officers and employees 13,191,855 14,333,812
1,291,124,519 983,220,426
Accounts payable includes accrued maintenance and other operating expenses and
local counterpart of loans payable.
Due to officers and employees refer to accrued personal services to be paid the
following year.
Increase in Dividends Payable represents estimated dividends due for the year.
14. Inter-agency Payables
This account consists of payable to the:
2017 2016
(As Restated)
Bureau of the Treasury 146,856,674 146,720,491
Bureau of Internal Revenue 4,523,203 1,904,951
GSIS 1,257,331 1,129,469
PhilHealth 76,842 70,352
Pag-IBIG 78,380 92,285
Other GOCCs 4,095 4,095
152,796,525 149,921,643
Payable to the Bureau of the Treasury pertains to the guarantee fee on existing loans
while Other GOCCs refers to payable to National Home Mortgage and Finance
Corporation.
31

Increase in the account of Bureau of Internal Revenue was due to increase in Output tax
for the year.
15. Long-term liabilities
This account consists of domestic and foreign borrowing, as follows:
Maturity Annual
Source Date Currency Interest 2017 2016
Rate
Domestic
DBP/LBP 12/31/18 P 4.50% 80,357,143 401,785,714
SPIAL 05-15-26 $ 9.65% 172,951,145 185,565,825
ADB 1746-PHI 02-01-22 P floating 125,978,003 136,433,133
NHA P floating 98,795,399 98,795,399
IBRD 1272/1282 07-15-20 $ 8.50% 72,150,705 71,941,292
550,232,395 894,521,363
Foreign
ADB 1379-PHI 07-15-20 $ floating 1,273,857,957 1,617,377,198
JBIC (OECF) 02-20-20 Y 2.70% 1,531,254,964 1,462,778,618
China Eximbank
AWUAIP II 01-21-30 $ libor rate 4,801,391,372 5,170,452,082
French Protocol 12-31-18 FF 3%-6.8% 2,820,886 5,623,081
IBRD 4227 PHI 09-15-17 $ Floating 0 9,323,165
ADB 3377-PHI 03-15-41 $ libor rate 562,374,407 505,438,747
8,171,699,586 8,770,992,891
8,721,931,981 9,665,514,254
Current Portion
Asian Development bank (ADB)

1379 383,922,234
1746 11,956,245 395,878,479 358,037,309
Int’l. Bank for Reconstruction & Development 0 9,323,165
(IBRD) 4227
French Protocol 2,821,018 3,196,304
Special Project Implementation
Assistance Loan (SPIAL) 13,154,841 13,116,660
China Eximbank Loan 384,111,310 382,996,451
Current Portion 795,965,648 766,669,889
Non-Current Portion 7,925,966,333 8,898,844,365
On February 10, 2011, the MWSS Board of Trustees unanimously passed Board
Resolution No. 2011-017 approving the P2.250 billion floating rate Bond Issuance under
the DBP-LBP Club Deal Arrangement. The bond issuance was guaranteed by the
National Government. The proceeds were used to partly finance the MWSS’ maturing 7-
year USD 150 million 9.25 percent Fixed rate Bond with the BNP Paribas which matured
32

last March 14, 2011. The bond was drawn in full on March 30, 2011 and payable in
seven (7) years with pre-termination option. Interest rate was based on the higher of the
BSP Reverse Repurchase (RRP) Facility or BSP Overnight Borrowing Rate. This will
mature in the 1st Quarter of 2018.
The Special Project Implementation Assistance Loan (SPIAL) is a portion of the National
Government’s multi-currency loans from the ADB under Loan Nos. 779 & 780. This was
relent to MWSS to partly finance the following projects: Manila Water Supply
Rehabilitation Project I (MWSRP I), Manila Water Supply Project II (MWSP II), and
Metro Manila Sewerage Project (MMSP).
ADB Loan No. 1746 PHI is a sub-loan agreement entered into by and between the
Department of Finance and the MWSS on October 13, 2003 for the implementation of
the Pasig River Environmental Management and Rehabilitation Sector, a sanitation
component of the loan.
NHA Loan was transferred by NHA to MWSS before the privatization that financed the
transfer of water and sewer systems of Tondo Foreshore, Dagat-Dagatan and
Kapitbahayan. The validity of the account is still subject to confirmation and subsequent
preparation of MOA between MWSS, NHA and the two concessionaires.
International Bank for Reconstruction and Development (IBRD) Loan No. 1272/1282-
Manila Urban Development Project are likewise a national government loan relent to
MWSS on October 1, 1976. Per subsidiary loan agreement dated October 1, 1976,
MWSS shall repay the principal of the subsidiary loan that started on November 15,
1981.
ADB Loan No. 1379 PHI was obtained on November 27, 1995. The primary objectives of
the project were to divert an average annual flow of about 15.7 cu.m. per second from
the Umiray river basin to the Angat reservoir and to augment the treated water supply
capacity of MWSS by about nine cu.m. per second by 1999. The secondary objective of
the project was to reduce Non Revenue Water (NRW) by providing support for leak
detection and repair activities. It is a twenty (20) year loan with a grace period of five (5)
years which will mature on July 15, 2020.
JBIC Loan PH 110 – contracted by Japan and the national government of the Republic
of the Philippines in 1990 intended for Angat Water Supply Optimization Project. The
proceeds of the loan were treated by MWSS as government equity.
China Eximbank - Angat Water Utilization and Aqueduct Improvement Project Phase II
(AWUAIP-II) is being financed through a loan from the Export-Import Bank of China on
May 7, 2010 in the amount of US$116,602,000. The Angat Water Utilization and
Aqueduct Improvement Project Phase 2 is an offshoot of the Angat Water Utilization and
Aqueduct Improvement Project (AWUAIP). To be implemented by the MWSS, the
AWUAIP is targeted to maintain and optimize the water conveyance from Angat Dam to
the Water Treatment Plants via the Ipo Dam-Bicti-La Mesa Portal system. The project
involves the rehabilitation of AQ-5, which supplies half of the raw water for Metro Manila,
as well as the construction of AQ-6 in order to recover around 394 million liters of raw
water lost to leakages. AWUAIP Phase 2 on the other hand involves the construction of
the remaining 9.9 km section of AQ-6, and the rehabilitation of AQ-5. The AQ-6
extension aims to completely recover the lost water due to leakages in AQ-5.
Repayment period is fifteen (15) years on a semi-annual basis starting January 21, 2015
and will mature on January 21, 2030.
33

The French Protocol is a French Treasury Credit Facility from the French Republic
intended to finance the implementation of the Rizal Province Water Supply Improvement
Project (RPWSIP) payable within a period of ten (10) years that started December 2002.
IBRD 4227 PHI was part of the Water Districts Development Project funded by a loan
from the World Bank-IBRD. MWSS entered into a subsidiary loan agreement with the
Republic of the Philippines through the Department of Finance for a $2.3 million from
said IBRD loan. Repayment period is 15 years on a semi-annual basis starting March
15, 2003 and ending on September 15, 2017 per Schedule 3 of the Loan Agreement
between the Republic of the Philippines and the International Bank for Reconstruction
and Development dated May 15, 1999.
ADB Loan 3377-PHI is a negotiated loan agreement between MWSS and Asian
Development Bank for the Angat Water Transmission Improvement Project in the
amount of US$123.30 million on May 27, 2016. This loan is guaranteed by the National
Government and payable semi-annually in 25 years inclusive of 6.5 years’ grace period.
MWSS shall pay 0.25 percent Guarantee Fee per annum on the outstanding obligation
pursuant to DC 1-2016 to the National Government. The expected closing date is June
30, 2022.
16. Other Liability Accounts
2017 2016
Guaranty Deposits Payable 99,252 99,252
Performance/Bidders/Bail Bonds Payable 1,766,356 1,781,213
Trust Liabilities 71,250,432 101,310,718
Other Liability Accounts 125,494,928 97,642,045
526,723,636 528,945,896
This account includes 10 percent retention from contractors’ claims, unreturned

borrowed materials, cost of flushing, attorneys’ fees, guaranty deposits and depository
liabilities. It also includes liabilities with existing law suits and money claims.
The decrease in trust liabilities is attributed to the disbursement of funds to finance the
Angat River Downstream Improvement Project the Provincial Government of Bulacan
and refund of payment for contractual services of AWUAIP Phase 2 Project to be used
for Common Purpose Facility. Increase in Other Liability accounts was due to 10 percent
retention from AWTIP Project and refund of government share from MWSS Employees
Savings and Welfare Fund.
34

17. Deferred Credits
2017 2016
Deferred credits to Income - COB 521,666,612 505,114,350
Deferred credits to Income - Penalty/ Interest
on delayed payment of Concession Fee and
borrowing costs 1,271,940,691 1,267,268,877
Others 45,929,509 45,963,609
Bank Reconciling
Unreconciled balances Items 22,632,720 22,632,720
1,862,169,532 1,840,979,556
Deferred credits to Income – COB account represents annual income concession fee –
corporate operating budget received in advance from concessionaires pursuant to the
concession agreement. Said account is amortized fully within the year to the appropriate
income account.
Deferred credits to Income – Penalty/Interest on delayed payment of Concession Fee is

the penalty previously charged to MWSI computed based on 364 T-bills rate. The
amount was disallowed by the Rehabilitation Court in Court Order approving the
Prepayment and Settlement Agreement (PSA) dated 19 December 2007 and Court
Order confirming the termination of the corporate rehabilitation proceedings on account
of successful implementations of the 2005 Revised Rehab Plan dated February 06,
2008.
The Other Deferred Credits included the following:
Disposal/Public Sale from disposal of Assets which needs to be 31,124,028

Auction reconciled with the various subsidiary accounts for
identification of assets, its depreciation and gain or
loss on sale of assets.
Cost of Lot Collection from employees for Cost of Lot payment 13,019,097
Housing (MWSS Housing).
Miscellaneous - Pasig River Environmental Mgt. & Rehab Sector 1,752,679
Others Dev. Program (PREMSDP)
Miscellaneous – Cash deposits intended to cover up expenses in 8,000

Cash Bond and cases of breakage, damage to property and
Others cleanliness of renting MWSS facilities which are
refundable.
Amount withheld Amount withheld from contractors under dispute 25,705
for liquidated
damages
Total 45,929,509
18. Capital Stock
MWSS has an authorized capital stock of P8 billion corresponding to 80 million shares at

P100 par value, of which P6,095,486,784 were issued and outstanding equivalent to
60,954,868 shares.
35

19. Donated Capital
This account represents the costs of waterworks facilities turned-over by private

subdivisions by way of a Deed of Donation. It also includes the grant from the Japan
International Cooperation Agency (JICA) for the rehabilitation of Balara Water Treatment
Plant.
20. Appraisal Capital Stock
The Appraisal Capital Stock is used to record changes in the carrying amount of items of
PPE as a result of revaluation. The Revaluation Surplus account has an ending balance
of P28.428 billion as shown below:
2017 2016
Land 12,205,095,285 12,205,095,285
Structures and Improvements 292,485,820 292,485,820
Collecting and Impounding Reservoirs 1,111,404,830 1,111,404,830
Supply Mains 3,097,555,968 3,097,555,968
Distribution Reservoirs and Booster Station 2,432,331,004 2,432,331,004
Building and Improvements 485,838,406 485,838,406
Wells and Facilities 76,762,346 76,762,346
Water Treatment Equipment 103,483,461 103,483,461
Sewer Treatment Equipment 4,192,576 4,192,576
Water Treatment Plant 126,236,850 126,236,850
Transmission and Distribution Mains 7,730,461,901 7,730,461,901
Water Meters 98,315,762 98,315,762
Transmission and Discharge Mains 482,090,989 482,090,989
Public Faucets/Sanitary Facilities 15,954,953 15,954,953
Sewer Treatment Plant and Pumping Stations 82,942,888 82,942,888
Hydrants 9,799,181 9,799,181
Manholes and Accessories 13,968,231 13,968,231
House Water Connection 8,177,985 8,177,985
House Sewer Connection 38,709,103 38,709,103
Electrical Installation and Lighting System 12,096,251 12,096,251
28,427,903,790 28,427,903,790
21. Revenue
2017 2016
Concession Fee
Concession Income 1,010,981,807 993,105,901
Debt Service 1,184,496,125 1,554,341,919
Progress Billing 23,991,333 53,035,195
Business Income
Raw Water 83,283,360 74,428,065
Rental of Leased Properties 107,711,144 95,679,346
Interest on Investments and Deposits 61,172,698 67,432,385
36

Miscellaneous Income 1,546,067 215,391
Other Fines and Penalties 0 3,230
2,473,182,534 2,838,241,432
Concession Fees – Debt Service and Progress billings are concession fees received
from the Concessionaires that are intended for MWSS loan amortization and payments
to contractors/suppliers, respectively. These are pass-on payment without any margin in
favor of MWSS.
Concession Income is the annual Current Operating Budget being paid by the
concessionaires to MWSS for administrative expenditures subject to annual Consumer
Price Index adjustment.
Business Income is income resulting from operation, including interest earned from
deposits. The increase of Rental of Leased Properties was brought about by the
collection of San Juan Stockyard rental while increase of Miscellaneous Income by
disposal of unserviceable assets.
Raw Water is business income from sale of raw water on service areas not covered by
the service areas of the MWSI.
22. Personnel Services
This account is comprised of the following:
2017 2016
(As Restated)
Salaries and Wages - Regular 74,987,702 64,159,197
Life and Retirement Insurance Contributions 8,893,729 7,700,027
Other Personnel Benefits 7,847,120 6,229,714
Longevity Pay 6,384,220 3,101,659
Year End Bonus 6,225,240 0
Subsistence 6,138,002 2,846,454
Other Bonuses and Allowances 6,013,733 5,446,193
Terminal Leave Benefits 5,392,522 1,742,785
Honoraria 4,352,580 2,052,000
Personnel Economic Relief Allowance (PERA) 3,669,843 3,813,923
Representation Allowance (RA) 2,736,601 2,729,475
Transportation Allowance (TA) 2,656,670 2,582,792
Productivity Incentive Bonus 1,075,176 8,468,834
Clothing/Uniform Allowance 926,500 820,000
Cash Gift 769,000 6,266,311
PHILHEALTH Contributions 655,500 654,125
Salaries and Wages - Contractual 596,820 0
Overtime and Night Pay 416,566 21,129
PAG-IBIG Contributions 184,700 191,200
ECC Contributions 183,600 191,200
Loyalty Award Benefits 95,000 391,500
Hazard Pay 0 214,011
140,200,824 119,622,529
37

23. Maintenance and Other Operating Expenses
2017 2016
(As Restated)
Taxes, Duties and Licenses 25,452,364 28,339,649
Security Services 26,239,749 27,010,398
Auditing Services 10,421,105 6,149,103
Other Maintenance and Operating Expenses 6,697,163 3,990,797
Training Expenses 6,210,224 2,766,700
Electricity Expenses 5,320,480 3,934,245
Other Professional Services 4,969,038 4,500,543
Janitorial Services 4,470,463 4,281,372
Consultancy Services 4,347,773 1,231,429
Insurance Expenses 2,796,669 2,763,099
Representation Expenses 2,008,560 2,423,221
Other Supplies Expenses 1,756,105 954,576
Gasoline, Oil and Lubricants Expenses 1,605,717 1,518,285
Office Supplies Expenses 1,542,863 1,726,770
Subscription Expenses 1,189,654 1,445,555
Extraordinary Expenses 1,092,730 844,858
Telephone Expenses - Landline 893,963 936,304
Advertising Expenses 823,895 738,203
Telephone Expenses - Mobile 790,478 751,159
Rent Expenses 680,127 735,570
Repairs and Maintenance - Motor Vehicles 646,433 465,725
Internet Expenses 554,862 597,158
Printing & Bidding Expenses 519,940 485,632
Repairs and Maintenance - Office Buildings 430,761 303,148
Drugs and Medicines Expenses 411,477 405,225
Travelling Expenses - Local 316,396 581,624
Travelling Expenses - Foreign 246,178 4,500
Fidelity Bond Premiums 72,216 54,802
Repairs and Maintenance - IT Equipment and 65,418 36,650
Software
Miscellaneous Expenses 64,527 600,164
Cable, Satellite, Telegraph, and Radio Expenses 56,190 19,171
Postage and Deliveries 54,725 52,343
Membership Dues and Contributions to
Organizations 34,100 44,136
Water Expenses 28,114 25,424
Repairs and Maintenance - Communication
27,300 26,825
Equipment
Repairs and Maintenance - Furniture and Fixtures 15,138 116,804
Donations 8,000 0
38

Medical, Dental and Laboratory Supplies
7,231 0
Expenses
Repairs and Maintenance - Office Equipment 6,149 172,921
Repairs and Maintenance - Other Structures 2,000 53,125
Repairs and Maintenance – Sports Equipment 0 16,985
112,876,275 101,104,198
24. Non-cash Expenses
Amortization
2017 2016
Amortization of Angat water rights 8,122,603
6,161,066
Depreciation
2017 2016
Depreciation - Other Structures 967,872,657 1,085,256,689
Depreciation - Office Buildings 13,194,766 13,383,827
Depreciation - Motor Vehicles 2,243,122 2,889,332
Depreciation - Other Machineries and Equipment 1,407,842 1,748,677
Depreciation - IT Equipment 1,280,965 929,200
Depreciation - Other Transportation Equipment 365,050 13,720,344
Depreciation - Medical, Dental and Laboratory
Equipment 233,709 233,820
Depreciation - Office Equipment 215,060 170,402
Depreciation - Furniture and Fixtures 211,004 277,880
Depreciation - Technical and Scientific Equipment 93,476 692,997
Depreciation - Communication Equipment 61,815 83,809
Depreciation - Sports Equipment 19,654 23,751
Depreciation - Library 285 342
987,199,405 1,119,411,070
25. Income Tax Expense
Section 18 of the MWSS Charter (R.A. 6234) provides that “All articles imported by the
Metropolitan Waterworks and Sewerage System xxx, shall be exempt from the
imposition of import duties and other taxes.
BIR Ruling No. DA-088-2001 dated May 16, 2001 ruled that the concession fees paid by
the Concessionaires to MWSS, if at all they are in the nature of income, shall be
excluded from the gross income subject to tax.
Categorically, MWSS is taxable with respect to its other income other than concession
fees received from the concessionaires.
39

The account Taxes, Duties and Licenses is used to recognize the amount of taxes,
duties and licenses and other fees due to regulatory agencies except income tax. This
also includes taxes on interest income on savings deposits, time deposits and
government securities of the bond sinking fund/other funds. (COA Circular 2001-008 and
the New Government Accounting Manual)
26. Financial Expenses
2017 2016
Interest expenses 255,220,354 397,284,771
Other financial charges 66,247,862 96,140,933
Bank charges 180,148 9,359,186
321,648,364 502,784,890
27. Losses
2017 2016
(Gain)/Loss on Foreign Exchange 99,877,087 510,677,154
(Gain)/Loss on Disposed Assets 399,061 (22,365)
100,276,148 510,654,789
Gain or Loss on Foreign Exchange is paper gain/loss as a result of appreciation or

devaluation of pesos on loan payments.
Gain/Loss on Disposed Assets is the difference between book value and income from
sale from disposal.
28. Contingent Liabilities
MWSS is contingently liable for lawsuits or claims filed by third parties which either are
pending in the courts or under negotiations. These cases involve, among others, lease
of properties, collection of sum of money, water use conflict issues, payments of claims,
protest on real property taxes and tax consequences resulting from revaluation/appraisal
of its Property, Plant and Equipment.
a. BIR Tax Assessment
MWSS also received Assessment/Demand Letter requiring the agency to settle tax
deficiency for CY 2010 amounting to P30,772,011.57. As per Board Resolution No.
2017-047-CO, MWSS engaged the services of the Office of the Government
Corporate Counsel (OGCC), as the MWSS Statutory Counsel, for the legal
representation in the preparation and filing of necessary legal proceeding against the
40

Bureau of Internal Revenue (BIR) at the Court of Tax Appeals (CTA) to contest the
BIR’s final Decision on disputed Assessment for taxable year 2013. A Petition for
Review was filed at the Court of Tax Appeals last May 24, 2017 per CTA Case No.
9599. However, the CTA in March 2018, in view of the Supreme Court decision in
the case of BIR vs PSALM dismissed the petition for lack of jurisdiction and instead
will refer it to the Department of Justice.
b. The MWSS has pending court litigations concerning project contracts and land
disputes totaling P29.71 million prior to its privatization in 1997. The MWSS has
also disputed the real estate taxes charged by the local government of Quezon City
in the amount of P264 million. In 2010, the Quezon City government auctioned
some of the properties located in the area. To prevent the inclusion of MWSS
property in the auction held in December 2010, the MWSS deposited P30M. The
legal issues on the matter are elevated before the Supreme Court and subsequently
a temporary restraining order (TRO) was issued on January 21, 2011 enjoining
Quezon City government from proceeding with the levy of the subject properties until
further orders from the court.
c. Other significant legal cases are as follows:
 MWSS vs. Maynilad Water Services Civil Case R-QZN-15-06702-CV

 Neri Colmenares and Carlos Zarate of Bayan Muna partylist vs Cesar Purisima,
MWSS, et.al GR. 219352
 Lina Francia F. Badeo vs. MWSS for reinstatement with back wages and others
 Lease of MWSS property along Katipunan Ave. by SM Prime Holdings
 Water for all Refund Movement vs. MWSS GR. 207444/208207/210147
 Gabriel Advincula vs. MWSS; GR. 179217, Re: Severance Pay
 Alexander Lopez, et.al vs. MWSS, GR 198693, Re: Contract Collectors Claim
 CSC vs MWSS; indirect Contempt on Alexander Lopez, et.al, Separation Pay
and Terminal Leave of Contract Collectors
 Various cases regarding Unlawful Detainer on Land Properties of MWSS
29. Report on the Supplementary Information Required Under Revenue Regulation

No. 15-2010
In compliance with the above regulation, MWSS’ taxes and withholding taxes paid and
accrued during the year are categorized as follows:
1. Income Tax
For the Year 2017 MWSS incurred P6,821,254 Corporate Income Tax payable.
2. VAT Output Tax
MWSS is a VAT-registered company with VAT Output Tax Declaration of

P13,236,616 for the year based on the amount reflected in the Income/Receivables
Account of P110,305,132.
41

3. VAT Input Tax
The amount of VAT Input taxes claims are broken down as follows:
Particulars Amount
Beginning of the year 283,605
Current year’s purchases 18,667,120
Total 18,950,725
Claim for tax credits and other adjustments 565,708
Input VAT for 2018 (January) 274,647
4. Other Taxes and Licenses
Particulars Amount
Other Taxes and Licenses 23,471,667
BIR Registration Fee 500
BIR Assessment Fee 1,980,197
Total 25,452,364
5. The amount of withholding taxes categorized into:
Particulars Amount
i. Tax on Compensation and Benefits 17,832,933
ii. Creditable Withholding Tax/es 13,878,599
iii. Final Withholding Tax/es 619,106
30. Unreconciled Asset and Liability Account Balances
The summary of the unreconciled balances in the Asset and Liability accounts is as
follows:
2017 2016
Asset Accounts
Accounts Receivable 21,596,858 21,625,745
Other Receivables 1,108,354 1,108,354
Prepayments 96,513,125 96,513,125
Property, Plant and Equipment 17,813,593 22,162,726
Construction in Progress 457,018,739 457,018,739
Other Assets (19,575,783) (19,575,783)
Total Unreconciled Assets 574,474,886 578,852,906
Liability Accounts
Payable Accounts 533,802,867 533,802,867
Other Liability Account 328,112,668 328,112,668
Deferred Credits 22,632,720 22,632,720
Total Unreconciled Liabilities 884,548,255 884,548,255
Net Unreconciled Balances 310,073,369 305,695,349
42

31. Restatement of Retained Earnings/Accumulated Surplus
The Retained Earnings as of January 01, 2017 has been restated as follows:
Balance, January 1, 2017 (Unrestated) 9,431,208,082

Adjustments:
Prior Years/Allocated Cost/Errors (MWSS-RO) 448,149
Retained Earnings, January 1, 2017 (As Restated) 9,431,656,231
32. Statement of Comparison of Budget and Actual Amounts
The budget was on an accrual basis, covering the period from January 1, 2017 to
December 31, 2017. The MWSS-Corporate and Regulatory Offices have a separate
budget approval from the Department of Budget and Management.
The decrease in actual expenditures vs. the budgetary amounts on the Personnel
Services was due to the non-filling up of vacant positions and the late implementation of
the Capital Outlay was due to non-implementation of scheduled procurement per Annual
Procurement Plan (APP) including the slide down of the loan drawdowns of AWTIP
Contractor (CMC Di Ravenna) due to some changes in the design of the inlet structure
which was resolved only in October 2017. Likewise, the tunnel boring machine, although
delivered in the latter part of CY 2017, was only operational in the early part of CY 2018,
contrary to the initial projection that the same will be operational in CY 2017.
43

PREPARED BY:
Corporate Planning Team
Ronald S. Abrigo Ronald M. Atara
Johnny C. Emmanuel, Jr. Rosaida C. Barranta

4th Floor MWSS Administration Building
489 Katipunan Avenue, Balara, Quezon City 1105 Philippines
Telephone Number: (+632) 9205521

E-mail Address: info@mwss.gov.ph
Website: http://mwss.gov.ph/

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MWSS Annual Report 2017 PDF

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INTRODUCTION

When the new Administrator assumed office in 2017, the Metropolitan

This Annual Report talks about the progress of MWSS’ long-term

ANNUAL REPORT 2017 1

As a result of the National water Crisis Act of 1995 in 1997, the

VISION • A world-class agency admired for its water security legacy in a

ANNUAL REPORT 2017 3

2 History, Mission and

4 New Administrator’s Profile p8 p10 p14

a. Angat Dam and Dyke Strengthening Project (ADDSP)

4 METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

11 Sewerage and Sanitation 14 Partnership Development

gets Nomination to 2017 Global 15 Communication and

p31 p41 16 Financial Report p59

ANNUAL REPORT 2017 5

6 METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

ANNUAL REPORT 2017 7

PDDG Reynaldo V. Velasco likes to throw deadpan

ANNUAL REPORT 2017 9

PDDG Reynaldo Vicente Velasco (ret) – The newly selected

10 METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

Col. Melchior Isla Acosta, Jr. (Philippine Army

ANNUAL REPORT 2017 11

Merly Cruz – She is currently taking his doctorate

12 METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

Atty. Melanie Sia-Lambino – She obtained her

Atty. Valeriano Pasquil - A lawyer by profession, Trustee

ANNUAL REPORT 2017 13

14 METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

Legacy 1: Water Resources and Infrastructure

ANNUAL REPORT 2017 15

The emphasis has been given to the following essential areas:

A sustainable environment program through watershed management projects is very

16 METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

WATER RESOURCES AND

ANNUAL REPORT 2017 17

Strengthening works: Flood protection works:

BULACAN BULK WATER SUPPLY PROJECT

• Stage 1&2, PhP 7.16B

The winning bidder is the Luzon Clean Water

18 METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

Highlights of project accomplishments/activities in

The bidding for the 1.155 Billion project, however,

Highlights of Accomplishments in CY 2017:

• The MWSS Board has approved on 13 December

• The MWSS is currently undertaking the

20 METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

ANNUAL REPORT 2017 21

This project, located in Umiray, General Nakar Quezon, is being

In 2013, the Notice of Award was issued to Cavite Ideal

While accomplishment rate was 67.79%, an unfortunate

Highlights of Accomplishments in CY 2017:

• Requirements for Quarry Permit were complied by CPF.

22 METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

24 METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

This project located in Norzagaray, Bulacan, involves

Highlights of Accomplishments in 2017:

• Detailed Engineering Design (DED) completed.

• Ongoing discussion between MWSS and ADB

• Ongoing Construction Works with 23.69%

SEWERAGE AND SANITATION

Following the Concessionaires’ provision on

Nonetheless, incessant challenges continue to arise