Creative financing solution for water supply and sanitation in the Philippines

Abstract

This paper discusses the ongoing initiative to establish a sustainable financing mechanism for water supply and sanitation (WSS) projects, anchored on the principle of public–private partnership. It tackles the magnitude of investment requirements and financing gaps, and the rationale and objectives of the Philippine Water Revolving Fund (PWRF) and its financial structure. PWRF responds to the government's policy to shift financing of WSS projects, starting with existing creditworthy water utilities, from concessional to market-based sources. PWRF is initially designed as a co-financing credit facility combining official development assistance (ODA) with private financing institution funds. However, its ultimate goal is to access the domestic capital market through pooled bond financing.