Water in Metro Cebu: The Case for Policy and Institutional Reforms by Ronald Yacat

Journal of Philippine Development Number46, VolumeXXV,No. 2, SecondSemester1998

-q

Water

Cristina

in Metro Cebu: and Institutional C. David,

Arlene and

The

Case for Policy Reforms*

B. Inocencio, Ed

Francisco

M. Largo,

L. WaIag'*

INTRODUCTION Metro Cebu is the second largest urban center in the country, with a population of more than 1.3 million people and covering 3 cities and 5 municipalities within 544 sq. km. of land area._ It comprises almost half of the entire population of Cebu province, but only 14 percent of its land area. About half of Metro Cebu's population and land area are in Cebu City which has historically been the commercial and service center of the Visayas and Northern Mindanao regions, as well as the home base of the country's major shipping companies. Outside Metro Manila, Metro Cebu has the highest concentration of major hospital, educational, and medical trai_ing services. Over the past decade, Metro Cebu has been drawing substantial industrial investments, attracted by the rapid infrastructure (air, port, and land transport facilities) development, the presence of trainable manpower, strong trade and services network, and adequate living amenities. Metro Cebu currently accounts for 70 percent of Central Visayas' industrial output; the Mactan Export Processing Zone alone with its 101 firms and over 38,000 employees, contributes over 60 percent of the region's total exports. Tourism has also become a major source of growth of its economy, as Metro Cebu has become the top destination of foreign tourists. Aside from its historical significance and natural attractions, peace and order condition is relatively good, infrastructure is well-developed, and modern shipping facilities provide access to other tourist destinations in nearby island.s.

*Paper presented at the workshop on "Urban Water Issues in Metro Cebu," Plenary Flail, Ramon Aboitiz Foundation, Inc., Cebu City, June 17, 1998. **ResearchFellows, Senior Instructor, Project Manager, Philippine Institute for Development Studies19 University of San Carlos, and Water Resources Center respectively. Included are Cebu City, Mandaue City, Lapu-Lapu City, Cordova, Talisay, Consolacion, Liloan, and Compostela.

231)

JOURNAL OF PHILIPPINE DEVELOPMENT

In contrast Metro

Cebu,

the

its water

utility

economy;

2 the

considered

to the

resource

management

is a serious

concern

of the various

effluents

people's

that

use

resources.

costly.

be raising not

Excluding

Even

though

cost

as marginal, Second, and

production

stage,

off may damage salt water

the

by large effects of water

the construction the ecosystem,

species. intrusion,

Overpumping cause

land

has adversely other

and

institutional

and

sustainable

of certain

cost

Hence,

availability or

of groundwater subsidence,

and

socially

distribution,

and

have

public

is difficult

water

may already

increase

is often

market

prices water.

arising

costs

to harness

affected

purely

of quality

externalities impose

unique

efficient,

groundwater

or surface

users.

water

as watersheds),

resulting

of dams dislocate

regulation

from its consumption

the

diminishing

consumption

and

of ground

environmental

production

endangered

especially

reflect

Because such

development,

surface

withdrawal,

policy

an economically

nonpayers

overuse

of water

adequately

both

The lack

and

equitable,

Cebu.

sustainable

First,

pollution

streams the

factors

will fail to achieve

depletion

as well as weak

of water

been

is limited;

reported

the efficient, in Metro

connection

surface resources

may

from

to society.

population, raise

of the

long

aquifers.

of rivers,

have

despite

is to analyze

resource (and

sources

quality

sectors

of coastal

efforts,

quality

and environmentally

of water

viewed

and

of water

good characteristics. and

treatment

be constraining

mechanisms

equitable,

intrusion

and

Cebu

water

unregulated,

and nonpoint

of water

characteristics market

and

Metro

to piped

saline

of this paper

may

management

and

health

The purpose

access

is virtually

reserves

of industrial

surrounding

state;

pumping collection

factors

development

of its water

of sewerage affected bodies.

economic

state

watersheds

of groundwater

progressive

service

in a critical

groundwater

overall

water

the

At the run-

and threaten will lead

cost of abstraction

for future users. At the consumption stage, negative externalities may arise from untreated domestic sewer and industrial wastewater or effluents

21ndeed, a multi-stakeholder coalition called the Cebu Uniting for Sustainable Water (CUSW)was formed to lobby for improvements in water resource management policy. Thus far, this is the only such organized effort in the country, reflecting the serious nature of the problem in Metro Cebu.

DAVID ET AL.: WATER IN METRO CEBU

accompanying health

water

and

quality

Finally, typically

use

production

of a centralized

water that

prevent

extraction

incentive,

would

need

resource

may

often

in addressing

supply

planning,

and

watershed

and groundwater

control"

or administrative/legal and

water

operation

characterized and

by faulty

finally

scarce

with

WATER

SUPPLY

Almost

The

abstracts

about

service

23 percent

long

in establishing

that

a) lack

structure

of water

pollution

control,

on "command

which

government

scarce

have of the

operations

that

does

to be sector

are

typically

competition;

not recognize

water

for the pervasive

consumption

and water

proven public

and lack of effective

nor account

to achieve

issues

in allocating

involvement

the

of an integrated,

management,

pollution

policy

will facilitate Failure

b) over-reliance

direct

and

as a

externalities

of water.

SITUATION

used in Metro Cebu is derived

government-owned 110,000

of total

households

and

or domestic

_Only a small amount been heavily silted.

Metro

cum/d

area. a Its piped

commercial

Household

production

all freshwater

aquifers.

and

pricing

(and not a free) resource

associated

the

incentive

as natural and

interrelated

mechanisms

although

d) a water

to the

demand

water

are

the operation efficiency

objectives.

the inherently

and

role

framework

management

controlling

groundwater

Often,

to achieve

a critical

protection;

c) dominance

supply

has

operation,

and

may be characterized

be attributed

approach

inadequate;

on public

rents.

institutional

holistic

resources

pollution

of scale.

to be regulated

therefore, and

of water

system

of monopoly

regulatory,

objectives

of water

of surface

economies

distribution

government,

achievement these

and distribution by strong

monopolies The

the impact

of water-bodies.

characterized

the

through

231

through

water and

establishments use

of water

Cebu

Water

its 81 wells system

a smaller

proportion

accounts

(1% of total)

for about

is derived

District

(MCWD)

in various

distribution

for an average

from groundwater

serves

parts

of the

industrial

of 18 hours

70 percent

from the Buhisan

only about per day.

of the volume

Dam

which

has

2,32

JOURNAL OF PHILIPPINE DEVELOPMENT

of water the

sold;

whereas

remaining

piped

with

to rely

cart,

the

1997).

or large

Except estimate

the

commercial required

and

the total number

and

vendors. or vended pumps,

(Largo

et al. 1998;

Vended

water

may

and

firms, private

storage

Inocencio

be picked

tanks

et al. 1998;

up from the

or delivered

MCWD wells,

of groundwater

Cebu),

other

National

source,

through

private

subdivisions

no available

directly. large

Water

only a small

of registered

are

pumping

and

with the

there

a hose,

fraction (126)

MCWD

and

others

industries,

do so.

for domestic

are

(represented

only 151, and

Estimate of Urban Water Consumption of Supply, 1995 (Thousand cum/d) Household

Board

actually

Table

of groundwater

Resource

wells was

information

Although

users

by residential

wells

commercial or through

cisterns

dominated

Total

take

Many of those with MCWD water in conjunction with its

supply

establishments

by MCWD in Metro

Private

users

trucks.

to register

other

(self-supplied

with MCWD connection

for the rate

industrial

wells

in booster

rationed

a neighbor

jeep

on private

or invest

Expertelligence frequently

of households,

and private water also use own wells

water,

cope

majority

have

waterworks) connections

commercial

30 percent.

The large therefore,

industrial,

As of 1997, these

use

were

(Table

1).

by Source

Others

Total

47.6 (24)*

19.5 (23)

67.1 (24)

148,1 (76)

64.4 (77)

212.5 (76)

195.7 [70]**

83.9 [30[

279.6

Figures in parenthesis are percentage shares of MCWD or other sources to water use by households or other users.

Figures in brackets are percentage shares of households or other users to total water use,

Note:

The total water use is derived based on a conservative assumption about size of water demand for industrial, commercial, and other users. See PIDS i estimate of water demand in Table 3.

DAVID ET AL.: WATER IN METRO CEBU

The number only

of registered

private

16, 5 for irrigation,

by the Water household data,

be within

the

has

been

typically

consumption

range

Cordova,

cutflower,

hog,

and

uses.

industrial

Interestingly, 1990

have

(CIADPS

methods

cum/d Cebu's

of natural

abstraction

rate,

130,000

and

1998).

The same the

relative

as sources consumption,

a measure

abstraction costs

estimate importance

of water

(Table

(CIADPS

at least

have

increased

of total

water

of private

75 percent

280,000

it is clear

half of the estimated 1991;

table

water

Walag

the coastal

has

by use

consumption

that

Estimates groundwater

fallen. allows

vendors

on PIDS 1, low estimate

of water

Whichever

depleted.

Haman

consumption

for

to a high

however,

as water

1995

figure

3).

1994;

use

use -- our higher

in Table

rapidly

and

recent

water

has long intruded

wells

since cum/d

a more

water an even

only about

saltwater

2). Based

of safe or sustainable cum/d,

Consequently,

pumping

is being

crudely

total industrial

on per capita

is correct,

aquifer

to 160,000

of groundwater

1996; JICA

Based

rows

In most

quite

to 243,000

a low of about

PIDS2

any reliable

abstraction

of 235,000

indicates

farming

vegetables,

uses.

to projected

nonhousehold from

however,

is hardly

are estimated

assumption

and

groundwater

recharge

yield, vary from

infer

(see PIDS1

of groundwater

the Metro

areas

ranging

of total water

for prawn

1996).

consumption

abstraction

estimates,

of groundwater

Walag

for estimating

abstraction

of 390,000 estimate

1991.;

water

1996).

for nonhousehold

range

of wells

for the

ratio per sq. meter estimates

number

primarily

of water

-- with a different

of urban

groundwater

of water uses

of wells--*

on fragmented

estimates

there

wa.

individual

especially

Moreover,

a narrow

Haman

census

and different

rates

within

1994;

population estimate

various

been

(Walag

for fishery,

consumption

by multiplying water intensity and commercial lot area.

Based

None of the available

and commercial

inventory included

the total

by deriving

farms.

uses

total groundwater

nor for agriculture,

poultry

for estimating

cases,

5000.

Cebu,

data,

indirectly

of groundwater

and

which

of 20,000-25,000

estimated

the use

for Metro

of any systematic

in Talisay

basis

that

for various

includes

A recent

(WRC) in Mactan,

a total of more than

estimated

In the absence

wells for industrial/commercial 4 for fisheries.

Center

wells, reported

WRC also

might

and

Resource

233

us to

together

of total water

of both households

234.

JOURNAL OF PHILIPPINE DEVELOPMENT

Table

Distribution of Registered by Municipality, 1997

Private

Wells

in Metro

Cebu,

Number Municipality

Wells

Registrants

City

Compostela

Consolacion

Cordova

Lapu-Lapu

Liloan

Mandaue

Talisay

151

128

Cebu

Total

and

other

users

part of vended MCWD water, because

the

one.

FUTURE

to originate

likely,

nonhousehold

the

obtained between SOURCES

demand

to develop on the

proportion

sources.

75 percent

and

OF WATER

sources

conducted

consumption

of industrial

private

of a rapidly

surface

studies

non-MCWD

water

through

As early as the mid-1970s; to water

from

Although

water, particularly those sold to households, the 75 percent may still underestimate the estimated

consumption somewhere

seems

wells

and

90 percent,

and water the

is actually true value

is a minimum commercial vendors upper

water would

limit.

SUPPLY

the limited growing

of water

Metro supply

groundwater

resources

Cebu

economy

have

been

by the Kampsax-Kruger

and

recognized

Lahmeyer

relative the

need based

International

DAVID ET AL.: WATER IN METRO CEBU

(KKLI) and

by the

River

the

and

surface

and

Lusaran

Dam

can

supply

Consultants

Mananga

water,

designed

Cebu

and

prepared

were

late

1970s

the

to create

tender

cum/d

its implementation.

By 1985, Mananga

system

Cebu

use of the storage infiltration water,

cum/d.

until

and

122,000

plant

water 1997,

and

north

projects, reasons.

Although have been

for domestic

included

yet

the Compostela

strongly

of small

water

not

has

expressed

wells purposes

within

the

as part

Mananga

River

was completed

the area.

These

but also for irrigation

and

the rate

I." Between 79,000

from

small

of vegetable

of a II", the

These

two

for a number

way back

effects wells

52 percent

to allow its operation. adverse

construction

project.

wellfield

possible

and

increased

of "Program

fully operational

about

been

declined

and

refused

yield

reservoir,

about

been

continually

of 100,000

and reducing

from

nonrevenue

I of the

cum/d

upstream

its "Program

investments

have

the local government

under

These

at Compostela

has

resources

increased

and

reservoir

concrete

capacity

investments

This

lines.

the rate

of Phase

however,

production

of Cebu

implementation

pipe

dam

the

above the ground

Valley.

supply

high

connecting

make

groundwater

water

a 90 meter

and

33,000

safe

II, an additional

more groundwater

water

cum/d

well-field

MCWD

through

to 38 percent.

natural

sedimentation

can produce

distribution

in the early

development

in the Jaclupan

the

the high

downstream weir,

which

i, an infiltration

material

than

at Tisa,

the

In Phase rate

a tunnel

and

1997,

recommended

which

of the

River

conditions

already

However,

recharge

by building

I project,

by exploiting

of nonrevenue

yields

higher In Phase

transmission

Up primarily

Phase

treatment

additional

down

times

McKee

Balamban

Cebu.

of a diversion

a wellfield

will be generated

Mananga

proposed

1986

and

three

10,000

cum/d

of alluvial

the construction

and

sources

for the construction for the

alternative.

the

The Balamban

potential

Dresser

for Metro

have

to increase

facilities,

about

of about the

Consultants

capacity

involves

with the poor economic

River as a lower cost

is envisaged

project

area

of water

1980s, the

Camp

documents

together

1980s.

identified

a catchment

cost of the project, prevented

in the early

River

in the

160,000

2,35

in 1992, Fears

on the pumping

are used farms,

not only the main

2,36

JOURNAL OF PHILIPPINEDEVELOPMENT

source

of livelihood

greater

autonomy

and the conflicts

apparent related

intersectoral yielding no

of households lack of clear to inter-LGU

i\flly completed

the

sand

may

artificial

and

have

unsustainable but study

Engineering Bank,

1997,

was taken.

far

in 1994.

It simply

In 1996,

another

of treated

Supply the

Islands.

Project

Inabanga

23,500

cum/d

from

the

the Phase

treatment

to provide towns

100,000

of water cum/d

being

1991,

the

by the Electrowatt Development

in 1993, no action

Operate

Transfer

(BOT)

Holdings

by the EES feasibility was River

Inabanga

that

also

from the Johan

Inabanga

began

at rates are

by the Asian

setout

will weir,

targets.

supply

BOT proposal

between

aquifer

project

but

long-term

Build

the design

4 This represents

to nearby

the

materialized.

accepted

Without

diversion

capacity,

funding

II was

pipelines the

of the

I was still to be started

adopted

water

involving River

the

to be imported

capacity,

and

has

unsolicited

overland

safe yield

of water

an unsolicited

Phase

study.

and

with

is costly.

II was completed

(EES) for possible

In the meantime,

submarine

medium

Phase

which

target

sources project

Berhad

in Mactan

the

for the Mananga

importation

not been

area

may have

Nonetheless,

below

surface

thus

and

the

be wasted.

over

but as the Mananga

proposal

the Code

to procure

recharge

in pumping

for the Mananga

Services

in 1.993 has

is unable

processing

however,

pumping

to develop

undertaken,

was begun

country

investments would

were

feasibility

system,

structures in late

Efforts

in the

to undergo

so that

operation still

With

funds of 5 percent of project cost. Apparently, the sand is much higher than anticipated because it

recharge

lower

other

that

filter over the artificial

out to be unavailable

be much

vicinity.

guidelines or mechanisms for resolving water transfers, nor about competing

I project

sand

remaining undisbursed cost of the specified or local

the

the Local Government

up to this time as the contractor

the multi-layer

turned

within

under

use of water, the Compostela wellfields remain non-operational, return on investments while the infrastructure investments

is depreciating over time. The Mananga Phase install

residing

of local governments

received in Bohol

for the through

in Bohol and Cordova

I of the Bohol-Cebu extracted water

downstream flow to Cebu

Water of and

in Bohol.

_From the Alliance of Angle-Philippines Holding Corporation, Brown and Root and Itocha Corporation.

DAVID ET AL.: WATER IN METRO CEBU

None of these of the apparently rate)

proposed

proposals

which

is not allowed

required

BOT proposals with

60-day

Supposedly,

innovative

apply

the unsolicited

provided

BOT proposals technologies

to either

of the

about

transfer

to the

constructed

surface

prioritized

in the

high

along

River

dam

cum/d

Phase

upstream, plant

absence

only in the

Future

160,000

political of water

in the

following

NET DEMAND

problems

order: River

only for projects

strictly

speaking,

concerns

does

have

with

the Inabanga reservoir

the

expansion

been

inter-LGU issues

River which

the

260,000

projects

Mananga

Phase

in Lusaran

the Inabanga

during

would

II, the

to produce

River Phase

construction raw

of a 60-meter water

are

100-meter additional

I; and the inabanga

and additional

cum/d

of MCWD

water

for Metro

high

dam

treatment Cebu.

PROJECTIONS

In this

section,

alternative

urban

water

up to the year

policy,

institutional

and

contract, proposal.

the

as well as technical

from

with a mini-hydropower

- SUPPLY

like a negotiated

associated

case,

supply

involves

additional

bidding

II project.

water

of raw water;

together

for an

solicited

competitive

I proposal,

of an upstream

Phase

Balamban

II which

Unlike

to contest which,

Phase

in the Compostela

reliability

dry season

of purchase

two proposals.

potential

as experienced

related the

the

More importantly,

may be accepted

or ideas,

In the case of the Bohol-Cebu raised

an open

anyone

because

at the old exchange

guarantees

are more

for

in part

BOT category.

through

BOT proposals

period

of P 20/cure

government

are evaluated

unsolicited

embodying not

which

however,

to be sold to MCWD.S

national

under

unsolicited

(in the order

for the bulk water

proposals

procedure,

has been approved,

high price

these

23,7

2020

projections are

regulatory

a more efficient, socially equitable management in Metro Cebu,

of demand

analyzed

reforms and

that

to put

and

in perspective

will be needed

sustainable

supply

water

for the

to achieve resource

5In fact, the proposed price of bulk water from the Mananga Phase II is substantially higher than the per unit cost estimated by the Electrowatt study.

2,38

JOURNAL OF PHILIPPINE DEVELOPMENT

Table

Alternative Projections of Demand for Water in Metro by Type of User, 1995-2015 (Thousand cum/d)

Cebu

1995

'2000

2005

2010

2015

2020

Households ELWATT

179.7

215.0

251.9

289.6

CIADP

184.2

230.4

286.9

356.0

EXPERT

167.2

193,8

222,7

260.4

PIDS1

195.7

238.4

286.2

338.7

395.0

453,9

PIDS2

195.7

238,4

286,2

338.7

395.0

453.9

others 43,9

66.8

97,6

135.0

CIADP

32.2

40.1

45,0

50,8

EXPERT

60.5

76.8

87.3

99.7

PIDS1

83.9

102.2

122.7

145.2

169.3

194.5

PIDS2

195.7

238.4

286.2

338.7

395.0

453.9

Total ELWATT

223.5

281.8

349.5

424.5

CIADPS

216.4

270.5

331.9

406.8

EXPERT

227.7

270.7

310.0

360.1

JICA98

161.9

211.5

316.2

478.4

609.3

763.3

PIDS1

279.6

340.6

408.9

483.9

564.3

648,4

PIDS2

391.4

476,8

572,4

677,4

790,0

907,8

JICA98 .......

Industrial and ELWATT

JICA98 .......

Projection was conducted for total demand as a whole. Source: Electrowatt Engineering Services, Ltd. 1991; Expertelligence Development Corporation 1997; JICA Cebu Integrated Area Development Plan 1994; JICA Water Master Plan 1998.

DAVID ET AL.: WATER IN METRO CEBU

DEMAND

since that

PROJECTIONS

Table

3 presents

1991.

Our review of the methodologies

projections

particularly

of future

past

studies

poor households capita) the

on the

average

households

has if the

purpose

water

supply

demand

Typically,

only

of the

demand

to a common

in the price for

1997;

CIADP 1994).

Study

(1998),

estimated of industrial In the more

no distinction projected

basis

To address demand

the weaknesses

projection

main difference and projected data available

(PIDS1

from past

and studies

on the

of past PIDS2)

the

to persist

wide

over time. of

available

demand

projections

are even more problematic. on water

use

per

lot area (Expertelligence Resource

even

of projected

arbitrarily high assumed per capita water which presumably includes nonhousehold

Theoretically,

analysis

JICA Water was

is to estimate

on assumptions

uses

but

households,

and commercial

across

on the

the

demand

recent

that to the

its implications

method

of water,

based

from

paid by the poor who

empirical

use

case,

indicates

in income,

is expected

and

and other water

were

study

typically

across

by source

data

our

is to analyze

price

latter

for suppressed

(Largo et al. 1998).

appropriate

nonhousehold

commercial these

was

of water

of limited

180 cure/capita)

of the poor compared

price

projection the

40 cure/

on observation

of differences

water

for the

(about

to correct

However,

higher

on vended

For household

In the

is based

consumption effect

requirements,

lot area and projections

demand

rationing.

5 to 10 times

(about

upwards

suggests

underestimated,

consumption

consumption.

to MCWD, adjusted

largely

relationships industrial,

of water

the

Because

per capita

conducted

studies

been

use of water.

households

consumption

not

in past

to be way below

levels

water

relative

difference

of the

observed

the

to depend

used

year

water

from water

reflects

importantly,

base

projections

may have

population

for the rest

observed

lower

demand

for the nonhousehold

per capita

arising

water

demand

assume

connected

the much others

water

or "blighted"

the average

demand

the various

the estimates

demand,

based

2,39

made;

and

population

Master

Plan

total water growth

and

consumption (355 cure/capita) use of water. projection,

are

is the much

also

two alternative

reported

higher

in Table

estimate

water 3. The

of base year

water demand for nonhousehold uses. Given the limited to estimate nonhousehold use of water and lack of theoretical

240

JOURNAL OF PHILIPPINE DEVELOPMENT

basis

and

crude

household

water

commercial

nature

of the

demand

was estimated

to total water

A high estimate

estimates

by adopting

consumption

is made

commonly

by assmning

(PIDS2), similar to the ratio where the service coverage

according

a ratio

to lot

internationally.

of approximately

50 percent

in Bangkok, Kuala Lumpur, and Singapore of water utility is 100 percent and to the

reported worldwide especially at the (Renzetti 1992; Water Utilities Data

A low estimate

is also provided,

commercial

to total

in developed sewer

and

water

countries

assuming

consumption

where

effluent

non-

the ratio of industrial/ observed

average ratio generally of economic development (PIDS1)

area,

of 30 percent,

a relatively

charges

have

the ratio

high water

reduced

early stages Book 1997). of industrial/

the ratio

price and

water

observed

appropriate

consumption

through

adoption of water saving technological processes, as well as recycling and reuse of water. Both ratios are higher than those obtained in the other projections, and

e.g., 1.2-15 percent

20-30

percent

in the

Our projection

separate

population, was

demand

for

for Expertelligence

the

projections

low rate whole

for water

for the

of average

(150

study.

demand

is based

on a higher

growth rate than the Electrowatt study, in all the other three studies. Moreover,

a relatively

applied

Electrowatt

of household

projected population than those assumed making

for CIADP, 26 percent

lcpd,

poor

and

per capita

and

the

but lower instead of rest

water

of the

consumption

increasing

1% per

is generally

higher

year)

population. Overall, projections; the

high

earlier

our

the

estimates

projections.

for year 2015 in PIDS1.

In Table with

those

the

amount

6The percent

as much

supply

available

of nonrevenue percent

20 percent

as 60

however,

percent

than

past

higher, more

while

than

the

that the 1998 JICA projections that

our low estimate

as shown

GAP

alternative

water

of water

2000,

are

are about

are even higher

- SUPPLY 4, the

demand

(PIDS1)

(PIDS2) beyond

of net

rate

water

It is interesting,

and

NET DEMAND

projected

low estimates

water in

demand

projections

(i.e., net

of assumed

for sale

is assumed 2005,

and

shown

decrease percent

from in

2010

together

nonrevenue

by MWCD. 6 In year

to 25

are

38 and

water),

2000

percent beyond.

1995

column,

down

DAVID ET AL.: WATER IN METRO CEBU

Table

Alternative in Metro

Projections Cebu

2,11

of Net

Demand

Supply

1995

2000

2005

2010

223.5

281.8

349.5

424.5

CIADPS

216.4

270,5

331.9

406.8

EXPERT

227.7

270.7

310.0

360.1

JICA98

161.9

211,5

316.2

478.4

763.3

PIDS1

279.6

340.6

408.9

483.9

564.3

648.4

PIDS2

391.4

476.8

572.4

677.4

790.0

907.8

67.1

102.1

291.9 [179.91

410.3

605.3

156.4

179.7

Demand ELWATT

2015

of Water

2020

Net MCWD supply*

Net

D-S gap** ELWATT

57.6

14.2

[169.6] CIADPS

149.3

168.4

EXPERT

160.6

168.6

40.0 [152.0]

(3.5)

18.1

(50.2)

24.3

68.1

4.0

1,58.0

117.0

73.6

(41.0)

43,1

[130.1] JICA98 PIDS1

94.8

109.4

212,4

238.5

[229.Ol PIDS2

324.2

374.7

280.6

267.2

184.7

302.4

[392.61

Figures in brackets are supply and net D-S gap v4thout the Lusaran Dam project,

Figures in parentheses

are surpluses,

242,

JOURNAL OF PHILIPPINE DEVELOPMENT

it is assumed operational.

that the Mananga Phase I and Corrlpostela wells will be fully The net supply figure for 2005 includes the water expected

from the Mananga brackets excludes year

2010,

Phase II and the the potential water

water

from the Phase

is added and in 2015, Although there supply

gaps,

Phase

it is clear

that

operation

"low" PIDS1

of all the proposed depletion highest

estimate

the

future

CLOSING

water

Phase

supply

supply Cebu,

sustainable Indeed,

project

WelIfield,

that

the Mananga

in the next century.

only with

expansion

projects

at least

up to 2025.

groundwater

to worsen

development

can groundwater Based

extraction

on the

of 164,000

private groundwater if there are no efforts

extraction to conserve

is closer

PIDS2 projection,

for water

strategies

will continue

II early

indicates

of safe or sustainable

supply-expansion

mining

of Mananga

in Metro

demand

water

of the Compostela

projection

surface

be controlled

cum/day (JICA 1998), about 52,000 cum/day. and

groundwater

I, and the completion the

I of the Cebu-Bohol

in In

Phase II of the project is assumed to be completed. are wide variations in the estimated net demand-

even with the successful in fact,

Lusaran Dam, while the figure supply from the Lusaran Dam.

alone

to the "high"

will fail to control

groundwater

is only water mining.

THE GAP

Undoubtedly, water demand management strategies must be adopted immediately, together with efficiency improvements and surface water supply

development

on the supply

side.

The key instrument

water demand is to institute an optimal water pricing of water to users that reflect its full economic cost, supply or financial cost of water, and water

production and consumption. Demand function estimates

commercial

firms

do show

1998;

Inocencio

water

demand-supply

charge

cost of production the environmental

and effluent

fails to account

and distribution, the or cost of externalities for households

significant

et al. 1998).

In other

gap by raising tax is substantial.

for the scarcity

price

cost of domestic

the

tariffs

The current

or opportunity

and industrial

and

responsiveness

words, water

water continues to be free for MCWD industrial, commercial and other users. environmental

for managing

policy, i.e., the price including the direct

scope

opportunity incurred in

industrial

and

(Largo

et al.

for reducing

the

and imposing

sewerage

pricing

structure

policy

cost of groundwater

as raw

and self-supplied households, Neither does it consider the wastewater

as no appropriate

DAVID ET AL.: WATER IN METRO CEBU

sewerage

charges

of water

and

consumers rate

and

raw

of nonrevenue

valuable

uses

of water

pollution

investments Although cost

operation

and

its

water

districts

lead

water

and

supply

water and

maintenance

country

Water Charges

Water district

Metro Cebu

costs), relatively (Table

levied.

firms

5).

of Selected

Minimum charge (P/corm/) (month)

undervaluation of water

over

urban to

pricing

policy

use),

noted

the

necessary

covers the

that

comparison

only

capital the

with

consumption

Water Districts

high

of less

manner,

of MCWD

For water

by the

c) worsening

(including

it should

final

in favor

invest

a timely

distribution

(as evidenced

d) failure

high

Such

usage

of freshwater

expansion

current

utility

irrigation and

of production

tariffs

been

b) misallocation

fishery

water

have

to a) wasteful

by water

problems,

the

in the

Table 5.

taxes

factors water),

(e.g.,

for

financial

effluent

243

structure

other

below

the and

water cum/

(P/cum)

Consumption 11-20 21-30

bracket [Â˘um) 31-40 41-50

90.65

I0.00

I 1.76

32.26

32,26

Zone

19,60 (7,78)

2.15 (0.95)

2.20 (1.00)

2,20 (1,00)

3.71 (2.37)

West Zone

29.40 (16.69)

3.33 (2.03)

5.36 (3.87)

6.70 (5.09)

Dasmarifias

35.00

6.00

6.75

7.75

8.90

General

50.00

5.60

6.08

7.04

8.00

Davao City

50.00

5.25

6.80

9.00

15.00

Dumaguete

54,00

5.50

6.50

7.50

8,50

O1ongapo

57.00

6.05

6.90

8.15

8_15

Laguna

58.50

5.85

6.90

8.40

9.85

Subic

72.00

8.00

9.00

10,50

10.50

Metro Iloflo

80.00

8,00

8.80

10.40

Metro Siquijor

99.00

14.70

16.30

18.40

Tagaytay

110.00

5.80

7.05

9.05

11.85

Baguio City

120.00

13.50

15.00

17.00

Metro ManilaEast

Santos

" For Metro Manila, these charges refer to households and include CERAI, and environmental fee. Figures in parenthesis refer to water tariffs alone. For other water districts, there is no price differentiation across types of users. Source: LWUA and MWSS

244

JOURNAL OF PHILIPPINE DEVELOPMENT

month,

MCWD's

exception

brackets,

cities,

(Table

6).

has

water

next In

tariff City

Cebu

average

ASEAN

Table

Baguio

Metro

MCWD's

water

fact,

is higher

than

Metro

Siquijor.

and the

highest

tariff

to Singapore, MCWD's

most

water

also and

tariff

among about

water

major

tariff

is the

higher

with

highest the

Domestic Water Price Structure for Household in the ASEAN Region, 1995 (US$/cum)"

Indeed,

among

average

highest

the

consumption

at P32.26/cum.

the

twice

cities

major

in the

region

consumption

in Selected

Utilities

Population coverage

Average price_

Water prices Consumption bracket (cum.} 1-10 11-20 21-30 31-40 41-50

51-61

Cebu

City _

.66

.33

.36

.42

1.16

Davao

City

.27

.08

.20

.26

.34

.46

Bandung

.37

.12"

.20

.24

.32

Chiangmai

.30

.15

.18

.26

.34

.36

Penang

.21

.09

.17

Manila _ East

zone

.14

.07

.08

.1.4

.14

West

zone

.25

.11

.13

.20

.25

Jakarta

.61

.16

.31.

.31

.35

Bangkok

.31

.16

.22

.23

.25

Kuala

.34

.17 d

,26

.26

.42

.55

.39

.56

.82

Lumpur

Singapore

Source: ADB Water Utilities Data "_ Currency conversions are based P26.384/$1.00 b Refers to the composite price environmental fee of 10 percent Â˘ Effective August 1996 to July d 0.17 applies to consumption up from 15 to 40 cubic meters. " _

Book, 1997. on foreign exchange

rates

as of 1 July

including a currency adjustment of base price. 1997. to 15 cubic meters; 0,26 applies

0,].2 refers to consumption up to 15 cubic meters; from 15 to 30 cubic meters. In Cebu City, same rates apply to all users. Refers to average price across all users.

0.20

refers

factor

1997,

i.e.,

and

to consumption to consumption

DAVID ET AL.: WATER IN METRO CEBU

bracket

above

30 cum/month.

MWSS,

Metro

Manila

districts

in the It should

and users,

compared percent per

2.0

overall

Kuala

the number

indicating water supply water

to improve

projects,

charge

and

the

is put in place.

And finally,

the

costs

It should to improve necessarily

water

though cost

of the actual

water,

5 to 1.0 times many

connections

average

of water

the welfare

are (Table

of water water

most

actually 7).

by income

cost

structure

investments inter-LGU

in capital

investments.

higher

service

together

of MCWD

however,

regulatory

rationed

water and

water

pricing

the

may be expected

environment,

without

that

survey

showed than the

Furthermore,

with

rely on vended the same Table

shows

despite

office

supply.

Our

class

can be

if conducted

if this leads

buying

average

to be imposed,

of poor households,

expensive

water

service will save final consumers with

poor households

from

The recent

to those

if a competent

that optimal

to MCWD water.

of MCWD

is typically with

quality

only

wells and completion

Privatization

water

In Metro dropped

will mean

will have

in coping

and

for effecting

losses

policy

and

for implementing

of operation,

manner improved

has

returns

capacity

taxes.

cost

be emphasized

the

access

effluent

incurred

reducing

reduced

of employees

privatization.

of Compostela

charge

financial

competitive

additional

connection

in order to minimize

as a raw water

to lower

1000

pricing

countries

respectively.

the legal framework

water

is 38 percent,

The number

the MWSS

institutional

an optimal

in a transparent

supply

per

development.

to 4.6 in Bangkok,

Singapore,

a year after

and upgrade

sewerage

direct

and

significantly

charges,

firms.

vigorously, for large-scale

supply

of MCWD

water

of MCWD

be pursued

particularly water

of the

among

efficiency

for developing

utility

of employees than

the need

expected

water

Lumpur

I have

expansion

should

tariffs,

average

Phase

Clearly,

cities.

water

in the operations

transfers

ASEAN

of surface

encountered

of Mananga

charges

is a high 9.3 compared

10 to 5.5, less

problems

and

water cost

water

for increasing

of nonrevenue

for the more efficient

Manila,

with

high

rate

1000 connections

over

high

to a 30 percent

1.1. and

scope

to be large

relatively the

the

with the privatization

lowest

that

relatively

the

be noted appear

For example,

has

as well as among

the

and

By contrast,

now

country

operations

considering

,?,45

official

price

water

from

8 which

the highly

the progressive

to greater the

limited

water

that

of MCWD neighbors reports

regressive character

the

nature of the

246

JOURNAL OF PHILIPPINE DEVELOPMENT

Table

7. Average Cost of Water and Distribution by Source of Water, Metro Cebu, 1997

Source

% of household

MCWD

Households

Average cost

Monthly income

(P/cure)

(P/capita)

33.9

12.0

2503.2

4.1

12.6

7645.7

15.9 2.4

56.5 0,0

1370.8 1293.4

9.7

14.1

1427.2

51 61 71 81 91

9.2 1.1 * * *

76.3 59.8 53.2 106.4 66.5

1189.0 ],696.7 1200.0 750.0 4000.0

Deepwell 52 62 72

2.1 -

76.3 -

1189.0 -

* 0

132.9 3.4

1025,0 1100,0

Private

waterworks

Self-supplied Deepwell Artesian Public

well

faucets

Water vendors MCWD water

82 92 Multi-Sources Source: Largo et al. (1998).

21.6

DAVID ET AL.: WATER IN METRO CEBU

Table

8. Average

Income

Cost

class

of Water

247

by Income

Average cost

Class,

Metro

Cebu,

% of water bill to

(P/cum)

income cost-inc

34.96

8.78

P30,000-39,999

30.59

4.07

P40,000-59,999

22.37

4.03

P60,000-99,999

24.68

3.22

PIO0

000-149,999

17.02

2.50

P150

000-199,999

17.50

1.84

P200

000-249,999

10.72

1.67

P250

000-499,999

10.50

0.82

P500

000-749,999

7.06

0.53

8.67

0.34

11.88

0.78

Under

P30,O00

P750000-999,999

PI,O00,O00

& over

Source: Largo et al. (1998).

1997

248

JOURNAL OF PHILIPPINE DEVELOPMENT

MCWD pricing

structure.

charges

facilitate

the

of urban

water

that

management cost of water would

costly

Moreover, of industrial reduced and

optimal and

water

conservation are

and

use

strong.

IMPLICATIONS

FOR

To promote

need

firms.

There

covers

without and

of water

saving

of water

(and

cost of water

where

or negative

environmental water and/or

production

there

are competing

charge

that

self-supplied

sources water

users.

charge

firms, presumably

that

should

this

all users than

abstraction revenues

for household

use

The MCWD

to finance

high

water

policy

i.e., direct

that

supply

opportunity

extraction

recently

necessary

yields water

collecting

by self-supplied We argue,

cost

and

charge

levied

is less

should, groundwater

generate

resource

large however,

of collection

to reduce

as well as

began

government

enough

cost

from surface

on MCWD

The raw water

to sustainable the

the

used

additional

ultimately

urban

and cost of externalities

for reforestation.

for as long as the

down

use,

reflect

by the

REFORMS

pricing

be imposed

revenue.

methods, for water

distribution;

users;

be collected

the additional

principle,

water

on groundwater

industrial

(Jaffe

cooling

policy and institutional

cost of water must

have

Specifically,

should

environmental

or groundwater raw water

impacts.

taxes

and sustainable

and

Potentials

components)

of water

evidence growth

and

Cebu, the following

cost of urban

cost

water

equitable,

competitiveness

industrial

technologies

that

charges.

effluent

practices.

its related

the full economic

A raw

and

POLICY AND INSTITUTIONAL

a more efficient,

effective

additional

is widespread

processing

recycling

the

to MCWD water

not threaten

impairing

sewer

sustainable

lower

the

tariffs

by modifying

or financial

water

domestic and

actually

despite

pricing

management, in Metro are called for:

Adoption

may

water

higher

reusing

also

resource reforms

water

commercial

responded

and

equitable,

as they gain access

vended

that

raw water

efficient,

resources

consumption

Firms

adopting

water

than

countries

al. 1995).

imposing

to poor households,

be less

developed

Hence,

sufficient

management

DAVID ET AL.: WATER IN METRO CEBU

activities.

Further

"249

studies

must

effective ways of collecting difficulties in enforcement. b)

Sewerage

fees must

abstraction

be introduced

as well as to self-supplied

effective

regulation

disposal

sewerage

Taxation

part

disposal

for

encouraging

water

(2 to 3 times)

may

sewerage related fees a)

activities.

finance

cost

Cebu. should

the

poor

be and

the wide differences and

large

users

groundwater

Of course,

charges,

taxes

and

management-

taxes

of environmental

users

of economies

effluent

resource

from effluent

pumping

large water

own wells because

users

and sewerage

management,

raw

to: cost of surface

water

development

of groundwater; farmers

either

for the reallocation

directly

or by developing

of irrigation alternative

water sources

water;

have part

in favor

to rely

finance

strengthen

the

capabilities

by funding

and

structure

small

for water

supply

cross-subsidies

may

firms.

be used

poor use

of irrigation

who

the

treatment,

industry/commercial

discourage

revenues

replenishment

support

and

raw water

part of the direct

to urban c)

from

may

compensate

between

be earmarked

finance

of its

in Metro

tariff

However,

to use their

Whereas

revenues

and b)

fees should

should

water

tariffs

and industrial

revenues

cost

of cross-subsidizing

to further

may still be expected of scale.

of MCWD,

the

be institutional

management

households

be narrowed

Government

must

conservation.

in water

of inherent

customers to cover

collection,

of the water

purposes

between

by commercial

effluents

character

maintained

effectively

users

cost-

system.

of environmental

The progressive

among

water

to determine

fees because

and the necessary

of industrial

integral d)

be conducted

of the

improving resource

on higher

cost

of the cost

of watershed

government's

water

poor,

sources protection; resource

the

following

activities:

the statistical

database

required

management

including

monitoring

especially of water

those supply;

and management

for proper of stream

water flow

2,50

JOURNAL OF PHILIPPINE DEVELOPMENT

of relevant rate *

surface

strengthening demand e.g.,

the analytical

ante

and

conducting

long-term

management

issues.

institutional

production

and delivery;

LGU water

transfers;

sector Where

reforms

resource

inefficiencies of water the

ability (not

The

regulatory

and overall

of the

has

and

led to

operations Clearly,

MCWD

of the the

long

should

full

office rates

largely

return

in unsolicited

Phase

and chosen

procedure

because

these

through these

Cebu

been

unsolicited

BOT proposals

with haste

are typically

functions.

as that have

previously

in ensuring

costly,

the public

competition

and

the with one been

bidding identified

undertaken.

as well as BOT proposals more

for

competitive

been

contractual

should

the usual have

private

be viewed such

need

proposals

must

proposals

have already

the

urgent

optimal

BOT

the

reasonable

regulatory

projects

II for Metro

studies

for

economic

from on

attainment

is an

for designing

In fact,

gains

time ensuring

there

considered.

depends

to monitor

supply

potential

term

at the same

of water

vigilant

sector

development

Therefore,

feasibility

public

For example:

procedure.

regulatory

caution.

capacity.

bidding

solicited

be more

planning,

competitive

surge

for Mananga

and

in water and inter-

and performing

recent

extreme

efficiency

local capability

development

resource

under

targets

arrangements

water

inter-basin

supply

monopolistic)

strengthen

and

be pursued

over

concessionaires.

to improve

realization

performance

projects;

intersectoral,

of the

planning,

should

privatization

water

privatization

and

However,

accurate

of potential

sewerage

management

in water

and_recharge

so forth;

evaluations

involvement

utilities,

transparent

for more

research

facilitate

direct

bases

and

and strengthen

water

and

supply and sewerage

ex post supply

extraction

quality,

and water

water

Introduce

public

sources,

water

projections

completed *

water

of groundwater,

Since solicited

sector

must

invest

DAVID ET AL.: WATER IN METRO CEBU

resources

for

water

supply

studies, monitoring evaluations. *

With

the

of the

limited

supply

mechanisms

of water

of legal

basis

such

water

transfers

and

nature

operational

and

the fragmented to ensure

inter-LGU The

for effecting

to be very

costly

in the

operations

resource

of the

and

resource

holistic

interrelated

issues

demand

management,

and

groundwater

relatively

weak

management

effective

management

and

operation,

and watershed

of the water

the

Cebu,

to be developed.

over the

integrated

the inherently

planning

and

in Metro

guidelines

proven

project

Code

specifically,

will have

of water

a more

addressing

ex post

Government

controversy

feasibility

in Compostela.

The complex requires

and

or more

has

of the ongoing wells

planning,

of freshwater

resources

lack

control

Local

for inter-basin

transfers

MCWD

project

of implementation

passage

naturally

case

2,51

coordination

clearly

approach of water

in supply

pollution

protection.

institutional

Thus, structure

will have to be addressed of policies

and

programs.

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