P93-B investment needed until 2025 for PH water security

P93-B investment needed until 2025 for PH water security
Lack of financing in the Philippines' water sector remains a major concern, USAID official says

MANILA, Philippines – The Philippines would need P93 billion ($2.12 billion) in investments until 2025 to give all Filipinos access to water, according to World Bank estimates.

“[World Bank’s estimate is an] opportunity for the private sector in addressing water security through the financing of projects for expanding water and sanitation infrastructure or improving efficiency of water systems,” United States Agency for International Development (USAID) for the Philippines Mission Director Gloria Steele said, during the “Innovating and Building Partnerships for Water Security” forum Monday, June 23.

According to the Philippine Progress Report on the Millennium Development Goals 2010, 92% of the Philippine population had access to improved source of drinking water. 

However, the Annual Poverty Indicators Survey in 2011 showed only 44.4% of the total population had connection to water supply (Level III) with more than half relying on either communal water systems (Level II at 12.5%) or protected wells and springs (Level I at 31.8%).

“This shortfall seriously impacts economic growth, health, and overall development of the country,” Steele said on the sidelines of the forum, which aimed at encouraging private sector investments such as public-private partnerships (PPP) and joint ventures to improve water services to support broad-based, inclusive, and resilient growth in urban areas outside Metro Manila.

Lack of financing in the Philippine water sector remains one of the biggest constraints to achieving total service coverage in the country, Steele cited.

“While government investment in the sector has increased in recent years, with a particular focus on bringing coverage to waterless communities, there is still an enormous gap,” Steel said.

In close coordination with the Philippine government, the US government through USAID works on interrelated governance and capacity building issues to facilitate improved access to clean drinking water supply and sanitation services.

USAID though will not provide funding but would help government in establishing an enabling environment in terms of policy and in identifying projects that are “fundable,” Steele clarified.

Huge investment cost turns off investors

The P93 billion requirement is doable considering it accounts only 10% of the entire budget of the Department of Public Works and Highways (DPWH), USAID Be Secure Project chief of the party Ramon Alikpala, said, quoting Public Works Secretary Rogelio Singson.

USAID’s Be Secure Project addresses the key task of mobilizing financing for sustainable water and sanitation services in the country. This initiative supports USAID’s efforts under the Cities Development Initiative to promote economic growth of second-tier cities and stimulate investments and inclusive development in the Philippines.

But DPWH’s national sanitation master plan provides for a 40% grant to private sector or local government unit (LGU) to invest in water systems with the requirement to put up sewage/management system, Alikpala said.

Such huge cost of investing in sewage turns off investors. It will also result in higher cost of water services in those areas, Alikpala added.

While Metro Manila and other planned communities have septage management systems that address the issue of sewage, areas outside of the metropolis only attract investors in water distribution despite the requirement under the Clean Water Act, Alikpala pointed out.

The Philippines has about 1,600 LGUs and only 500 water districts and 100 small scale providers. This means more than a thousand LGUs run their own water systems and LGUs have little or no expertise in this area.

As such, “the government is continuously exploring possibilities and opportunities to encourage private sector to invest in water supply development programs, to include financial, technical innovations and other partnerships,” Singson said. – Rappler.com

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