The Philippines has been unable to meet its growing demand for adequate water services. Indeed, the share of the population with access to water has fallen, particularly among the poor, as a result of frequent political turnover, fragmented regulatory oversight, and lack of coordination among service providers. Many communities have struggled with governance issues caused by overlapping responsibilities among local, provincial, and national authorities for planning, financing, tariff setting, and sector oversight. Communities also have been unable to raise funds for the new connections needed to meet the rising consumer demand. One province, thanks to the political will of its governor, is exploring how best to respond to the issues of governance and unmet demand. After first dissolving the local Water District, the province is introducing an output-based aid approach to water supply under a concession contract. The private operator will be paid on the basis of performance, receiving a payment from the government for each connection made to a household preidentified as poor.
