Irene Monicani, 45, no longer worries about water supply at her home in Quezon City. She recalls a starkly different reality in the 1990s, when her family had to walk several blocks just to queue for water — scarce, expensive, and rationed out by neighbors who had little to spare.
“I was in high school, and my parents had to work, so we paid some neighbors to line up our pails and containers so we wouldn’t run out of water. That doubled the cost of our drinking water,” she recalls.
From 1991 to 1994, Metro Manila and the rest of the country were hit by a succession of El Niño events, which drove the Angat Dam—the source of over 90% of Metro Manila’s bulk water supply—to critically low reservoir levels. During the worst periods, some neighborhoods in Metro Manila reported going four to six consecutive days without piped water.
A City at a Crossroads: Metro Manila’s Water in the 1990s
The Metropolitan Waterworks and Sewerage System (MWSS) — the government utility responsible for serving some 11 million people at that time— reached only two-thirds of its own franchise’s population, leaving roughly 3.6 million residents with no piped water connection at all.
Of those lucky enough to have a connection, barely one in four received water around the clock. More than 60 percent of MWSS’s water never reached a paying customer (“non-revenue water”), vanishing instead into aging, cracked pipes, illegal taps, and broken meters before a single drop could be billed.
Sanitation fared no better. The city’s sewer network covered only a fraction of the population and its few sewage treatment plants were barely functional.
In response, the Congress of the Philippines enacted the National Water Crisis Act in June 1995, giving a legal and policy framework for strong private sector participation in water supply and sanitation, and addressing the needs of the fast-growing metropolis.
The government decided that partnering with the private sector for water distribution and sanitation services was the best approach to solving Metro Manila’s water crisis. It engaged the International Finance Corporation (IFC), as lead transaction advisor — tasking it with designing the two-zone concession model, running the competitive bidding process, and helping establish the regulatory office that would oversee the concessionaires.
Complementing IFC’s transaction work, IBRD provided the analytical groundwork that made the case for reform, having co-financed the 1993–1994 sector review which recommended private sector participation, cost-recovery tariffs, and regulatory separation as the policy blueprint for the National Water Crisis Act.
Manila Water Company won the East Zone concession while Maynilad Water Services won the West Zone after a competitive bidding process. Private sector operations commenced on August 1, 1997.
