identifying TOPIC: Initial Study on the Effects of Executive Order No.

149
“Transferring the Metropolitan Waterworks and Sewerage System from the Department of Public
Works and Highways to the Office of the President”

 The transfer of administrative supervision over the MWSS from the Department of Public Works
and Highways (DPWH) to the Office of the President (OP), as provided under Section 1 of
Executive Order No. (EO) 149, could have an effect on the following:

- The DPWH is mandated to ensure that the planning, design, construction and
maintenance of infrastructure facilities such as national highways, flood control and
water resource development systems

- Entities, like the Local Water Utilities Administration (LWUA), have been transferred to
the DPWH to ensure coordination of efforts in formulating policies as well as planning
and implementing programs and projects for the water sector.

 The MWSS Corporate Office (MWSS-CO) is organized and existing pursuant to Republic Act No.
(RA) 6234, as amended, which mandates it "to insure an uninterrupted and adequate supply and
distribution of potable water for domestic and other purposes and the proper operation and
maintenance of sewerage systems."

On 29 December 2006, then President Gloria Macapagal-Arroyo issued EO 596. which explicitly
clarified the categorization of the MWSS by listing it not as a government-owned and controlled
corporation but as a Government Instrumentality with Corporate Powers/Government Corporate
Entity. In 2011, Congress passed Republic Act No. 10149 or the GOCC Governance Act of 2011,
echoing the same categorization, to wit:

“(n) Government Instrumentalities with Corporate Powers (GICP)/Government Corporate Entities

(GCE) refer to instrumentalities or agencies of the government, which are neither corporations
nor agencies integrated within the departmental framework, but vested by law with special
functions or jurisdiction, endowed with some if not all corporate powers, administering special
funds, and enjoying operational autonomy usually through a charter including, but not limited to,
the following: the Manila International Airport Authority (MIAA), the Philippine Ports Authority
(PPA), the Philippine Deposit Insurance Corporation (PDIC), the Metropolitan Waterworks and
Sewerage System (MWSS), the Laguna Lake Development Authority (LLDA), the Philippine
Fisheries Development Authority (PFDA), the Bases Conversion and Development Authority
(BCDA), the Cebu Port Authority (CPA), the Cagayan de Oro Port Authority, the San Fernando Port
Authority, the Local Water Utilities Administration (LWUA) and the Asian Productivity
Organization (APO).” (Emphasis supplied)

As further reiterated by the Supreme Court in the 2018 case MWSS vs Local Government of
Quezon City, the MWSS is a government instrumentality vested by law with special functions
and/or jurisdiction exercise supervision and control over all waterworks and sewerage systems
within Metro Manila, province of Rizal and a portion of Cavite

On the other hand, the MWSS Regulatory Office (RO) was established, organized and organized
by virtue of Article 12 of the Revised Concession Agreements (RCA), between the MWSS
representing the Philippine Government and the two concessionaires, Manila Water Company
Inc. (MWCI) and Maynilad Water Services Inc. (MWSI). The RO was established under the
 jurisdiction of the MWSS Board of Trustees (BOT) pursuant to MWSS charter, and applicable
laws and legislation, subject particularly an Executive Order to be issued and “subject to such
changes thereto that the Office of the President may make from time to time”, as explicitly
provided under Article 12.1 of the RCA. The RO has four (4) Regulation Areas (“divisions”)
namely: The Technical Regulation, Customer Service Regulation, Financial Regulation and
Administration and Legal Affairs.

Under Section 2 of EO 149, the transfer of the MWSS shall include the transfer of the RO and
the above divisions. As mentioned earlier, the RO is a creation of the Concession Agreement and
not thru legislation, unlike the MWSS – CO. Consequently, its existence, organization, and
regulatory powers are limited to those set forth in the Concession Agreement and is under the
jurisdiction of the MWSS BOT. As such any changes or transfer in the organization of,
supervision and/or administration over it should be in accordance with the provisions of the
Concession Agreement and with the concurrence of the BOT. However, the RCA also allows for
any changes in its manner of operations, functions and powers initiated by the Office of the
President and/or by virtue of an Executive Order to be issued.

 Under Section 3 of EO 149, the transfer administrative supervision shall also subject the MWSS
and the RO to a (a) system of periodic reporting to the OP for the monitoring of its performance
of its respective mandates and (b) any general policy that the OP may promulgate.

Section 38 EO 292 or the Administrative Code of 1987 provides the parameters of

“Administrative Supervision”, to wit:

“(a) Administrative supervision which shall govern the administrative relationship between a
department or its equivalent and regulatory agencies or other agencies as may be provided by
law, shall be limited to the authority of the department or its equivalent to generally oversee the
operations of such agencies and to insure that they are managed effectively, efficiently and
economically but without interference with day-to-day activities; or require the submission of
reports and cause the conduct of management audit, performance evaluation and inspection to
determine compliance with policies, standards and guidelines of the department; to take such
action as may be necessary for the proper performance of official functions, including rectification
of violations, abuses and other forms of maladministration; and to review and pass upon budget
proposals of such agencies but may not increase or add to them;

(b) Such authority shall not, however, extend to: (1) appointments and other personnel actions in
accordance with the decentralization of personnel functions under the Code, except when appeal
is made from an action of the appointing authority, in which case the appeal shall be initially sent
to the department or its equivalent, subject to appeal in accordance with law; (2) contracts
entered into by the agency in the pursuit of its objectives, the review of which and other
procedures related thereto shall be governed by appropriate laws, rules and regulations; and (3)
the power to review, reverse, revise, or modify the decisions of regulatory agencies in the exercise
of their regulatory or quasi-judicial functions; and

(c) Unless a different meaning is explicitly provided in the specific law governing the relationship
of particular agencies, the word “supervision” shall encompass administrative supervision as
defined in this paragraph.”

 Currently, as provided under the RCAs, the RO is headed by a Senior Deputy Administrator (SDA)
acting as Chief Regulator, and four Deputy Administrators (DA).
Additionally, under Section 5 of EO 149, a RO en banc, composed of the Chief Regulator and
four (4) other members, all appointed by the President, is created.