Metro Manila's water privatization is one of the world's largest and longest-running privatization programs for a water utility. While traditional efficiency metrics show significantly improved service levels under this schema, local anti-privatization activists maintain that the program does not benefit the urban poor. Assessments from an equity lens offer a fresh perspective, using information from a consumer survey of 53,733 residential households, privatization reports, and field interviews. Results show that access and affordability remain critical concerns for impoverished urban households despite major service improvements. Philippine policy makers must address these twin concerns in order to ensure a level playing field for these vulnerable households.
In 2019, Metro Manila experienced a water supply crisis, barely 2 years after the government and its private concessionaires were given international recognition for a successful water privatization, with success defined in terms of high operating efficiencies and improved service levels. These service-level improvements, however, brought about a surge in consumer demand, which necessitated the construction of a new water supply infrastructure. Regulatory failures resulting in nondelivery of the infrastructure effectively negated and trapped the efficiency gains that were built slowly over the years, at a cost of US$5.4 billion. Such failures resulted in public indignation over dry household taps, as well as a presidential anger that threatened to cancel the program in its entirety. Using the lessons learned from this crisis, the paper enumerates measures to help unlock the traps set by these regulatory failures.
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