DOJ OPINION NO. 173, s.

1984
December 3, 1984

Mr. Angel A. Alejandrino

Executive Director
National Water Resources Council
8th Floor, NIA Building
Edsa, Quezon City

Sir :

This refers to your request for opinion on the possibility of granting water permits to foreign
corporations authorized to do business in the Philippines in the light of the provisions of Presidential
Decree No. 1067 (otherwise known as the Water Code of the Philippines) and Sections 8 and 9 of Article
XIV of the Constitution.

Pursuant to Article 15 of the Water Code, only citizens of the Philippines of legal age as well as juridical
persons who are duly qualified by law to exploit and develop water resources, may apply for water
permits. A water permit refers to the documentary evidence of the grant by the Government of a water
right or privilege to appropriate and use water. (Article 13, P.D. No. 1067.)

The nationality requirement in the Water Code is in accord with the principle enunciated in Article XIV of
the Constitution which provides that "all . . . waters . . . and other natural resources of the Philippines
belong to the State" (Section 8) and that their disposition or utilization shall be limited to citizens of the
Philippines or to corporations or associations at least sixty percentum of the capital of which is owned
by such citizens (Section 9). LexLib

In view of the peremptory provisions of the constitution and the Water Code above cited, it is clear that
foreign corporations doing business in the Philippines may not apply for water permits or grants of
water rights. It may be observed, however, that while the Water Code imposes a nationality
requirement for the grant of water permits, the same refers to the privilege "to appropriate and use
water". This should be interpreted to mean the extraction of water from its natural source (Art. 9, P.D.
No. 1067). Once removed therefrom, they cease to be a part of the natural resources of the country and
are the subject of ordinary commerce and may be acquired by foreigners (Op. No. 55, series of 1939).
Moreover, as pointed out in your letter, in case of a contract of lease, the water permit shall be secured
by the lessor and included in the lease as an improvement. The water so removed from the natural
source may be appropriated/used by the foreign corporation leasing the property.

Please be guided accordingly.

Very truly yours,

(SGD.) ESTELITO P. MENDOZA

Minister of Justice

C o p y r i g h t 2 0 0 2 C D T e c h n o l o g i e s A s i a, I n c.