(a) All waters belong to the State.

PRESIDENTIAL DECREE No. 1067 (b) All waters that belong to the State can
not be the subject to acquisitive
WATER CODE OF THE PHILIPPINES prescription.

December 31, 1976 (c) The State may allow the use or
development of waters by
administrative concession.
A. PRELIMINARY
(d) The utilization, exploitation,
The State’s policy on the management of water development, conservation and
resources is implemented through the regulation of protection of water resources shall
water rights. P.D.1067 is a decree instituting a water be subject to the control and
code, thereby revising and consolidating the laws regulation of the government
governing the ownership, appropriation, utilization, through the National Water
exploitation, development, conservation and protection Resources Council, hereinafter
of water resources and rights to land related thereto. referred to as the Council.
(Codification is the arrangement of  laws systematically.)
(e) Preference in the use and
a. Policy Considerations development of waters shall
consider current usages and be
PD No. 1067 recognizes that water is vital to responsive to the changing needs of
national development and it has become increasingly the country.
necessary for government to intervene actively in
improving the management of water resources based Waters, as used in this Code, refers to water under the
on rational concepts or integrated and multipurpose grounds, water above the ground, water in the
management of water resources and sufficiently flexible atmosphere and the waters of the sea within the
to adequately meet future developments. territorial jurisdiction of the Philippines (Article 4).

Article XIV, Section 8 of the New Constitution d. State ownership of waters

of the Philippines provides, inter alia, that all waters of
the Philippines belong to the State. The following belong to the State: (Article 5)

Existing water legislations are piece-meal and

inadequate to cope with increasing scarcity of water (a) Rivers and their natural beds;
and changing patterns of water use.
(b) Continuous or intermittent waters of
b. Objectives springs and brooks running in their
natural beds and the beds
The objectives of this Code are: (Article 2) themselves;

(a) To establish the basic principles and (c) Natural lakes and lagoons;
framework relating to the
appropriation, control and (d) All other categories of surface waters
conservation of water resources to such as water flowing over lands,
achieve the optimum development water from rainfall whether
and rational utilization of these natural, or artificial, and water from
resources; agriculture runoff, seepage and
drainage;
(b) To define the extent of the rights and
obligations of water users and (e) Atmospheric water;
owners including the protection and
regulation of such rights;  (f) Subterranean or ground waters; and,

(c) To adopt a basic law governing the (g) Seawater.

ownership, appropriation, utilization,
exploitation, development,
conservation and protection of water
resources and rights to land related The following waters found on private lands belong to
thereto; and the State: (Article 6)

(d) To identify the administrative agencies

which will enforce this Code. (a) Continuous or intermittent waters
rising on such lands;
c. Underlying Principles
(b) Lakes and lagoons naturally
The underlying principles of this code are: (Article 3) occurring on such lands;

(c) Rain water falling on such lands; 

 (d) Subterranean or ground waters; and,
(e) Water in swamps and marshes.
The owner of the land where the water is
found may use the same for domestic purposes without
securing a permit, provided that such use shall be
registered, when required by the Council. The Council,
however, may regulate such when there is wastage, or
in times of emergency.
Subject to the provisions of this Code, any
person who captures or collects water by means of
cisterns, tanks, or pools shall have exclusive control
over such water and the right to dispose of the same
(Article 7).
Water legally appropriated shall be subject to
the control of the appropriator from the moment it
reaches the appropriator's canal or aqueduct leading to
the place where the water will be used or stored and,
thereafter, so long as it is being beneficially used for the
purposes for which it was appropriated (Article 8).
e. Definition of Terms
River – A natural stream of water, of greater volume
than a creek or rivulet, flowing in a more or
less permanent bed or channel, between
defined banks or walls, with a current which
may either be continuous in one direction of
affected by the ebb and flow of the tide.
Navigable River – Rivers are “navigable” in fact when
they are used, or are susceptible of being
used, in their ordinary condition as highways
for commerce over which trade and travel
are or may be conducted in the customary
modes of trade and travel on water.
(Example: Nile River)
Navigable Waters - Those waters which afford a
channel for useful commerce. (Example:
Panama Canal (artificial waterway), Manila
Bay, Suez Canal)
Rivers Banks - The boundaries which confine the water
to its channel throughout the entire width
when stream is carrying its maximum
quantity of water.
Creek – A small stream less than a river. The term
imports a recess cove, bay, or inlet in the
shore of a river, and not a separate or
independent stream, though it is sometimes
used in the latter meaning.
Lake – A considerable body of standing water in a
depression of land or expanded part of a
river. An inland body of water or naturally
enclosed basin serving to drain surrounding
country; or a body of water of considerable
size surrounded by land; a widened portion
of a river or a lagoon.
B. APPROPRIATION OF WATERS
a. Appropriation of waters
Appropriation of water, as used in this Code, is
the acquisition of rights over the use of waters or the
taking or diverting of waters from a natural source in
the manner and for any purpose allowed by law (Article
9).
Article 10. Water may be appropriated for the following
purposes:
(1) Domestic 
(2) Municipal 
(3) Irrigation 
(4) Power generation 
(5) Fisheries 
(6) Livestock raising 
(7) Industrial 
(8) Recreational, and 
(9) Other purposes
Use of water for domestic purposes is the
utilization of water for drinking, washing, bathing,
cooking or other household needs, home gardens, and
watering of lawns or domestic animals.
Use of water for municipal purposes is the
utilization of water for supplying the water
requirements of the community.
Use of water for irrigation is the utilization of
water for producing agricultural crops.
Use of water for power generation is the
utilization of water for producing electrical or
mechanical power.
Use of water for fisheries is the utilization of
water for the propagation and culture of fish as a
commercial enterprise. 
Use of water for livestock raising is the
utilization of water for large herds or flocks of animals
raised as a commercial enterprise. 
Use of water for industrial purposes is the
utilization of water in factories, industrial plants and
mines, including the use of water as an ingredient of a
finished product.
Use of water for recreational purposes is the
utilization of water for swimming pools, bath houses,
boating, water skiing, golf courses and other similar
facilities in resorts and other places of recreation.
Excepting for domestic use, every
appropriator of water shall maintain water control and
measuring devices, and keep records of water
withdrawal. When required by the Council, all
appropriators of water shall furnish information on
water use (Article 21 (2)).
For reasons of public policy, the State may
declare waters not previously appropriated, in whole or
in part, exempt from appropriation for any or all
purposes and, thereupon, such waters may not be
appropriated for those purposes (Article 11).
Waters appropriated for a particular purpose
may be applied for another purpose only upon prior
approval of the Council and on condition that the new
use does not unduly prejudice the rights of other
permittees, or require an increase in the volume of
water (Article 12).
The measure and limit of appropriation of
water shall be beneficial use. Beneficial use of water is
the utilization of water in the right amount during the
period that the water is needed for producing the
benefits for which the water is appropriated (Article
20).
Standards of beneficial use shall be prescribed
by the council for the appropriator of water for different
purposes and conditions, and the use of waters which
are appropriated shall be measured and controlled in
accordance therewith (Article 21 (1)).
Where water shortage is recurrent, the use of
the water pursuant to a permit may, in the interest of
equitable distribution of the benefits among legal
appropriators, reduce after due notice and hearing
(Article 26).
b. Nationality Requirement
Only citizens of the Philippines, of legal age, as
well as juridical persons, who are duly qualified by law
to exploit and develop water resources, may apply for
water permits (Article 15).
Section 3. Qualification of Applicants for
Permit/Authority – Only the following may file an
application with the Board for permit/authority:
a) Citizens of the Philippines;
b) Associations, duly registered cooperatives or
corporations organized under the laws of the
Philippines, at least 60 percent of the capital of
which is owned by citizens of the Philippines;
c) Government entities and instrumentalities,
including government-owned and controlled
corporations.
Water is a natural resource, the development,
exploitation or utilization of which is reserved for
citizens of the Philippines, or corporations or
associations at least 60% of the capital of which is
owned by such citizens.
However, In IDEALS, Inc. v. PSALM", as
discussed by Group 5, the Court noted that the
Department of Justice has consistently regarded
hydropower generation by foreign entities as not
constitutionally proscribed based on the definition of
water appropriation under the Water Code, thus:
"While the Water Code imposes a nationality
requirement for the grant of water permits, the same
refers to the privilege 'to appropriate and use water.
This should be interpreted to mean the extraction of
water from its natural source (Art, 9, P.D. No. 1067).
Once removed therefrom, they cease to be a part of the
natural resources of the country and are the subject of
ordinary commerce and may be acquired by foreigners.
In case of a contract of lease, the water permit
shall be secured by the lessor and included in the lease
as an improvement. The water so removed from the
natural source may be appropriated/used by the
foreign corporation leasing the property."
Under the Water Code concept of
appropriation, a foreign company may not be said to be
"appropriating our natural resources if it utilizes the
waters. Thus, in IDEALS, Inc., the Court held that since
the National Power Corporation (NPC) remains in
control of the operation of the dam by virtue of water
rights granted to it, there is no legal impediment to
foreign-owned companies undertaking the generation
of electric power using waters already appropriated by
NPC, the holder of water permit. However, in case the
facility requires a public utility franchise, the facility
operator must be a Filipino corporation or at least 60%
owned by Filipino.
Lease or transfer of water rights is allowed
under the Water Code, subject to the approval of
National Water Resources Board (NWRB) after due
notice and hearing (Article 19).
However, lessees or transferees of such water
rights must comply with the citizenship requirement
imposed by the Water Code and its IRR. It is worth
mentioning that the Water Code explicitly provides that
Filipino citizens and juridical persons who may apply
for water permits should be "duly qualified by law to
exploit and develop water resources."
c. Filing of Application
Article 16 provides that any person who
desires to obtain a water permit shall file an application
with the Council who shall make known said application
to the public for any protests. In determining whether
to grant or deny an application, the Council shall
consider the following:
a. Protests filed, if any;
b. Prior permits granted;
c. The availability of water;
d. The water supply needed for beneficial use;
e. Possible adverse effects;
f. Land-use economics; and
g. Other relevant factors.
Upon approval of an application, a water permit shall be
issued and recorded.
Article 17 provides that the right to the use of
water is deemed acquired as of the date of filing of the
application for a water permit in case of a approved
permits, or as of the date of actual use in a case where
no permit is required.
CASE TIME
BUENDIA vs. CITY OF ILIGAN, G.R. No. 132209, April 29, 2005

FACTS:

 Buendia filed with the National Water Resource Board (NWRB) an application for the appropriation of water from a spring
located within his property in Iligan City.
 In the absence of protests to the applications being timely filed, the NWRB, after evaluating Buendia's applications, issued
Water Permits in his favor.
 Almost five (5) months after Buendia's Water Permits were issued, the City of Iligan filed with the NWRB an "Opposition
and/or Appeal" contesting the issuance of said water permits to Buendia. The Opposition and/or Appeal sought to serve as
both a protest against Buendia's water permit applications, as well as an appeal to the NWRB's grant of the water permits to
Buendia.
 NWRB dismissed the City of Iligan's Opposition and/or Appeal. The "Opposition" part was dismissed for being filed out of
time, while the "Appeal" part was dismissed as a consequence of the denial of the opposition to the application, i.e., in the
absence of a verified protest having been seasonably filed, no water rights controversy arose; hence, there was no decision
from which respondent may appeal from.
 Respondent did not move for a reconsideration of said order, nor did it appeal to the appropriate Executive Department, but
instead filed a petition with the RTC Lanao del Norte assailing the legality of the NWRB Order for being issued in excess of its
jurisdiction and/or with grave abuse of discretion amounting to lack of jurisdiction.

 Lower Court's Ruling: Although the RTC upheld the dismissal of the "Opposition and./or Appeal" on procedural grounds, it
nonetheless annulled the NWRB Order.

ISSUE:

Who has the better right to appropriate water from petitioner's property?

RULING:

The question of as to who between the City of Iligan and Carlos Buendia has the better right to the water source should have
been left to the determination of the NWRB via a timely protest filed during the pendency of the water permit applications.  
However, said issue could not have been adjudicated upon by the NWRB since the application was never properly contested.  
Hence, in the absence of a timely protest filed before the NWRB, no water rights controversy arose wherein the NWRB can
properly discuss the substantial issues raised by respondent.

Furthermore, Articles 16 and 17 of the Water Code of the Philippines provide:

Art. 16.  Any person who desires to obtain a water permit shall file an application with the Council [now Board] who shall
make known said application to the public for any protests.

In determining whether to grant or deny an application, the Council [now Board] shall consider the following: protests filed,
if any; prior permits granted; the availability of water; the water supply needed for beneficial use; possible adverse
effects; land-use economics; and other relevant factors.

Upon approval of an application, a water permit shall be issued and recorded.

Art. 17.  The right to the use of water is deemed acquired as of the date of filing of the application for a water permit in case
of approved permits, or as of the date of actual use in a case where no permit is required.

From a reading of the above provisions, it is evident that after an application to obtain a water permit has been made known to
the public, any interested party must file his protest thereto, in order that the application may be properly evaluated.  Otherwise,
after the application for a water permit has been approved, the grantee of the permit now acquires an exclusive right to use the
water source, reckoned from the date of the filing of the applications.  Thus, after petitioner's right to the water permit has been
properly adjudicated, respondent may no longer belatedly question said grant.   By virtue of respondent's failure to lodge a timely
protest, petitioner has already acquired the right to appropriate the water from the spring inside the latter's property.

In conclusion, the failure of respondent City of Iligan to timely oppose the water permit applications, and later on to file the
Petition for Certiorari within a reasonable time has the effect of rendering the grant of the water permits to petitioner Buendia
final and executory.

C. WATER RIGHTS AND PERMITS

a. Water right is a privilege to appropriate and use

water.

Water right - is the privilege granted by the government

to appropriate and
 use water, Article 13(2).
Water Permit – is the document evidencing the water
right.
As a rule, no person including government
instrumentalities or government-owned or controlled
corporations, shall appropriate water without a water
right, which shall be evidenced by a document known as
a water permit, Article 13(1).
However, Article 14 provides that subject to
the provisions of this Code concerning the control,
protection, conservation, and regulation of the
appropriation and use of waters, any person may
appropriate or use natural bodies of water without
securing a water permit for any of the following:
a. Appropriation of water by means of hand
carried receptacles; and
b. Bathing or washing, watering or dipping of
domestic or farm animals, and navigation
of watercrafts or transportation of logs and
other objects by flotation.
A water right shall be exercised in such a
manner that the rights of third persons or of other
appropriators are not prejudiced thereby.
b. Right of a water permittee to demand
establishment of easements.
Article 25 provides that a holder of water
permit may demand the establishment of easements
necessary for the construction and maintenance of the
works and facilities needed for the beneficial use of the
waters to be appropriated subject to the requirements
of just compensation and to the following conditions:
a. That he is the owner, lessee, mortgagee or
one having real right over the land upon
which he proposes to use water: and
b. That the proposed easement is the most
convenient and the least onerous to the
servient estate.
Easements relating to the appropriation and
use of waters may be modified by agreement of the
contracting parties provided the same is not contrary to
law or prejudicial to third persons.
c. Revocation of water permits.
Water permits may be revoked after due
notice and hearing on grounds of non-use: gross
violation of the conditions imposed in the permit;
unauthorized sale of water: willful failure or refusal to
comply with rules and regulations of any lawful order;
pollution, public nuisance or acts detrimental to public
health and safety; when the appropriator is found to be
disqualified under the law to exploit and develop
natural resources of the country: when, in the case, of
irrigation, the land is converted to non agricultural
purposes; and other similar grounds (Article 29).
RA No. 2056 authorizes removal of
unauthorized dikes either as "public nuisances or as
prohibited constructions” on public navigable streams.
The power of the Secretary of Public Works to
investigate and clear public streams free from
unauthorized encroachments and obstructions was
granted as far back as Act No. 3208 of the old Philippine
Legislature, and has been upheld by the Court.
d. Suspension of water permits.
Water permits shall continue to be valid as
long as water is beneficially used; however, it maybe
suspended on the grounds of non-compliance with
approved plans and specifications or schedules of water
distribution; use of water for a purpose other than that
for which it was granted; non-payment of water
charges; wastage; failure to keep records of water
diversion, when required; and violation of any term or
condition of any permit or rules and regulations
promulgated by the Council.
Temporary permits may be issued for the
appropriation and use of water for short periods under
special circumstances. (Article 28)
All water permits are subject to modification
or cancellation by the council, after due notice and
hearing, in favor of a project of greater beneficial use or
for multi-purpose development, and a water permittee
who suffers thereby shall be duly compensated by the
entity or person in whose favor the cancellation was
made (Article 30).
Order of preference in the use of waters.
a. DOMESTIC AND MUNICIPAL USE
b. IRRIGATION
c. POWER GENERATION
d. FISHERIES
e. LIVESTOCK RAISING
f. INDUSTRIAL USE, AND
g. OTHER USES
What are the considerations in the preference of the
development of waters?
 Security of the State
 Multiple Use
 Beneficial Effects
 Adverse Effects
 Cost of Development
Utilization of Waters
• Utilization of subterranean or ground water
• Shall be coordinated with that of surface
waters such as rivers, streams, springs, and
lakes
• So that superior right in one is not adversely
affected by the inferior right of the other
• Council shall promulgate rules and regulations
and declare the existence of control areas for
the coordinated development, protection and
utilization of ground water and surface water
Control area: is an area of land where subterranean or
ground water and surface water are so interrelated that
withdrawal and use in one similarly affects the other .
Boundary of control area may be altered from time to
time , as circumstances warrant.
Water contained in open canals, aqueducts, or reservoir
of private person may be used by any person

Do’s
• For domestic purposes or for watering plants
as long as the water is withdrawn by manual
methods without checking the stream or
damaging the canal, aqueduct or reservoir
Don’ts
• Right may be restricted by the owner should it
result in loss or injury to him
Prohibitions and Conditions for Use of
Waters
a. No excavation for the purpose of emission of
hot spring or for enlargement of the existing
opening thereof shall be made without prior
permit.
b. No person shall develop a stream, lake or
spring for recreational purposes without
permit
c. Unless Otherwise ordered by the President,
and only in time of national calamity or
emergency, no person shall induce or restrain
rainfall by any method.
d. No person shall raise or lower the water level
of a river, stream, lake, lagoon, or marsh nor
drain the same without a permit.
e. Drainage system shall be constructed that
their outlets may be approved by the proper
government agency.
f. When artificial means are employed to drain
water from higher to lower land, the
owner of the higher land shall select
the routes and methods of drainage that will
cause the minimum damage to the lower
land, subject to the requirements of
just compensation.
g. When the use, conveyance or storage of waters
results in damage to another, the person
responsible for the damage shall pay
compensation.
h. Any person having an easement for an
aqueduct may enter upon the servient land for
the purpose of cleaning, repairing or replacing
the aqueduct or the removal of destruction
therefrom.
i. Lower estates are obliged to receive the
waters which naturally and without the
intervention of man flow from the higher
estate, as well as the stone or earth which they
carry with them.
j. The banks of rivers and streams and the
shores of the seas and lakes throughout their
entire length and within a zone of 3 meters in
urban areas, 20 meters in agricultural areas
and 40 meters in forest areas, along their
margins are subject to the easement of public
use
Easement
is an encumbrance imposed upon an
immovable for the benefits of another
immovable belonging to a different owner.
A. Legal easements relating to waters under the Civil
Code
Natural Drainage of lands (Art 637)
Natural drainage of building (Art. 674)
Easements on riparian banks for navigation, floatage,
fishing and salvage (Art. 638)
Easement of Dam (Arts 639,647)
Easement for drawing water or for watering animals
(Arts. 640,641)
Easement of aqueducts (Arts 643-646)
Easement of the construction of a stop lock or sluice
gate (Art. 647)
• B. Lower estates have the obligation to
receive the water which naturally flows
from the higher estate.
Provided that it is without the intervention of man
descend from the higher states.
Where the water which flow from the higher state are
those which are artificially collected in reservoirs or
man -made lagoons , any damage occasioned thereby
entitles the owner of the lower or servient estate to
compensation.
Article 50 of PD 1067 and Article 637 0f the Civil
Code
Lower states are oblige to receive the waters which
naturally and without the intervention of man flow from
the higher estate, as will as the stone or earth which
they carry with them
The owner of the lower estate cannot construct works
which will impede this natural flow, unless he provides
an alternative method of drainage, neither can the
owner of the higher estate make works which will
increase this natural flow”
Illustrative case: Remman Enterprises v. Court of
Appeals
Facts:
• Remman’s land is higher in elevation
than that of Respondent Lat
• Respondent complained that
Remman’s waste disposal lagoon was
already overflowing and inundating
one-fourth of Lat’s plantation with
water containing pig manure which
increase the acidity of the soil, which
the trees growing on the flooded
portion started to wither and die.
• Respondent filed complaint for
damages against Remman
 • Remman’s set up the defense that
heavy rains caused the overflooding
and, in any event, the law imposes a
natural easement on the owner of the
lower estate.
Issue: WON the damages were due to
fortuitous event.
Court Ruling:
• The Court reject such contention.
• It held that even assuming that the
heavy rains constituted an act of God,
by reason of Remman’s negligence;
the fortuitous event became
humanized, rendering it liable for
ensuing damages.
• It further ruled that Remman’s
property was practically made a
catch-basin of polluted water and
other noxious substances emptying
from its piggery, and any damage
occasioned thereby entitles the
owner of the lower servient estate
for compensation
VERGARA V. SONKIN
Facts:
• Sonkins property is lower in
elevation than Vergara’s property,
thus, it is legally obliged to receive
the waters that flow from the latter.
• Pursuant to Art. 637 of the Civil Code
“ This provision refers to the legal
easement pertaining to the natural
drainage of the lands, which obliges
lower estate to receive from the
higher estates water which naturally
and without the intervention of man
descend from the latter. i.e. not those
collected artificially in reservoir, etc.
Issue:
WON Sps. Sonkin are negligent for the leak in their
bedroom.
Ruling:
• Court held that while the proximate
cause of the damage sustained by the
house of Sonkin was the act of
Vergara in dumping gravel and soil
onto their property, thus, pushing the
perimeter wall back and causing
cracks thereon, as well as water
seepage, the former is guilty of
contributory negligence for not
only failing to observe two-meter
setback rule under the National
Building Code, but for disregarding
the legal easement constituted over
their property
• As such, Sonkin must necessarily
and equally bear his own loss.
C. Easement in Public Use
Banks of rivers, streams and the shores of the seas and
lakes throughout their entire length, along their
margins, and within a zone of-
1. Three (3) meters in urban areas
2. Twenty (20) meters in agricultural
areas, and
3. Forty (40) meters in forest areas.
CHAPTER V: CONTROL OF WATERS
I. FLOOD CONTROL AREAS
Prohibition against Activities that Obstruct the Flow
of Water, etc.
• Art. 53
The Secretary of DPWH – may declare flood control
areas and promulgate guidelines for governing flood
plain management plans in these areas
• Art. 54
Rules and regulations may be promulgated to prohibit
or control activities that may:
• Damage or cause deterioration of lakes
• Obstruct flow of water
• Change natural flow of river
• Increase flood loss
• Aggravate flood problems
• Art. 55
The government – may construct necessary flood
control structures
– shall have legal easement as wide
as may be needed
Pasig River Rehabilitation Commission (PRRC)
• Executive Order No. 717
• March 28, 2008
• Pasig River Dredging and Rehabilitation Work
• A Presidential priority project
• Under the DENR as the lead agency
River beds may NOT be cultivated
• Art. 56
River beds, sand bars and tidal flats
Exception: Prior permission from the Secretary of
DPWH
(NOT GRANTED if cultivation obstructs flow of water
or increase flood levels
Erection of Levees
• Levee - an embankment or artificial mound of
earth constructed along the margin of a river,
to prevent overflow
• Art. 57
Any person may erect levees to protect his property
from flood; it must not cause damage to another’s
property
Change of Course of Rivers
• Art. 58
Owners of the affected lands may not compel the
government to:
(a) restore the river to its former bed, nor
(b) restrain the government from taking steps to revert
the river to its former course.
Remedy:
Owners of the land may undertake to return the river to
its old bed at their own expense with permit from
DPWH
- must be commenced within 2 years from the
change of course of the river
Rivers or lakes may be declared navigable
• Art. 59
Rivers, lakes, and lagoons may be declared navigable
upon the recommendation of the Philippine Coast Guard
(PCG)
LOVINA VS MORENO
G.R. No. L-17821
Facts:
- Spouses Lovina built dams and dikes in a
fishpond they owned
- A petition of numerous residents to the
Secretary of Public Works and Communications
Complaint: Spouses Lovina had blocked the
"Sapang Bulati", a navigable river
- Secretary found the constructions to be a
public nuisance in navigable waters under RA 2056
- Spouses Lovina contend RA 2056 as
unconstitutional
Issue:
Whether or not RA 2056 is unconstitutional.
Held:
RA 2056 is constitutional.
RA 2056 merely empowers the Secretary to remove
unauthorized obstructions or encroachments upon
public streams
DPWH Secretary has the power to declare as a public
navigable stream even bodies of water found inside
titled properties.
DPWH Secretary has found that, originally,
the Sapang (creek) Bulati flowed across the property in
question, and that former registered owner, Jose de
Jesus, closed about meters of the course of
the sapang that lay within the lot in question by
constructing dams or dikes at both sides and converting
the lot into a fishpond.
Reservoirs
• Art. 62
Waters of a stream may be stored in a reservoir
- shall not prejudice the right of any permittee
downstream
Drilling of Subterranean or Ground Water
• Art. 64
Drilling of a well without prior permission from the
Council is prohibited.
Easement of Aqueduct
• Aqueduct - an artificial channel for conveying
water, a small canal  area, not covered by the CARP for compulsory
• Article 642, Civil Code
• Any person has the right to make
water used in his estate flow through
intervening estates
II. CONSERVATION AND PROTECTION OF WATERS AND
WATERSHEDS AND RELATED LAND RESOURCES
Conservation Measures:
1. DENR may declare any watershed as protected area.
(Art. 67)
2. Conservation of fish and wildlife to receive equal
attention with other water resources development
programs (Art. 73)
3. Swamps and marshes, which are owned by the State,
to be protected from drainage operation and
development. (Art. 74)
4. Acts which result in the introduction of sewage,
industrial waste, or any pollutant into any source of
water is prohibited
Exception: prior permission from
Environmental Management Bureau (EMB) (Art. 75)
5. Establishment of cemeteries and waste disposal
areas are subject to rules and regulations by
Department of Health (DOH). (Art. 76)
6. Tailings from mining operations and sediments
from placer mining shall not be dumped into rivers
Exception: prior permission from the Council,
upon recommendation by the EMB (Art. 77)
Sta. Rosa Realty Development Corp. vs CA
G.R. No. 112526
Facts:
Sta. Rosa (petitioner) registered owner of two parcels of
land in Cabuyao Laguna.
The land was inspected by Municipal Agrarian Reform
Officer, and upon consensus of the authorities
concerned, they decided that the said land must be
placed under compulsory acquisition.
Petitioner’s defense:
> The area is not appropriate for agricultural purposes;
land is a watershed.
> The area was rugged in terrain with slopes 18% and
above. (which falls under the exception in compulsory
acquisition of CARP)
> The occupants of the land were illegal settlers
(squatters) who by no means are entitled to the land as
beneficiaries.
Issue:
Whether or not the property in question is a watershed
acquisition.
Held:
Watershed - "an area drained by a river and its
tributaries and enclosed by a boundary or divide which
separates it from adjacent watersheds.”
- generally outside the commerce of man
Supreme Court held that:
• The definition does not exactly depict the
complexities of a watershed. The most
 important product of a watershed is water
which is one of the most important human
necessities.
• The concept of “intergenerational
responsibility”
• The disputed parcels of land form a vital part
of an area that need to be protected for
watershed purposes.
• Basis on the recommendation of the
Ecosystems Research and
Development Bureau (ERDB), a
research arm of the DENR.
According to ERDB:
• Clearing and tilling of the lands are totally
inconsistent with sound watershed
management.  by executive proclamation, a presumption arises
• The impact of watershed degredation
threatens the livelihood of thousands of
people dependent upon it.
Supreme Court also held that:
• There was proof showing that the disputed
parcels of land may be excluded from the
compulsory acquisition coverage of CARP
because of its very high slopes.
• To resolve true nature of the parcel of lands,
case remanded to DARAB for re-evaluation.
Collado vs CA
G.R. No. 107764
Facts:
• Petitioner Collado filed with the land
registration court an application for registration
of a parcel of land with an approximate area of
120.0766 hectares.
• Attached to the application was the technical
description of the Lot as Lot Psu-162620 signed
by Robert C. Pangyarihan, Officer-in-Charge of
the Survey Division, Bureau of Lands, which
stated, "[t]his survey is inside IN-12 Mariquina
Watershed."
• Petitioner filed an Amended
Application to include additional co-applicants.
Subsequently, more applicants joined.
• The Republic of the Philippines filed
oppositions to petitioners’ application.
• Petitioners alleged that they have
occupied the Lot since time immemorial. Their
possession has been open, public, notorious and
in the concept of owners. The Lot was surveyed
in the name of Sesinando Leyva, one of their
predecessors-in-interest, as early as March 22,
1902.
Issue:
Whether or not petitioners have registrable
title over the Lot.
Held:
• Under the Regalian Doctrine, all
lands of the public domain as well as all natural
resources belong to the State.
• Watersheds are considered natural
resources which are not susceptible of
occupancy, disposition, conveyance or
alienation.
• There is no proof that petitioners had
acquired ownership or title to the Lot either by
deed or by any other mode of acquisition from
the State, as for instance by acquisitive
prescription.
• No public land can be acquired by
private persons without any grant, express or
implied from the government; it is indispensable
that there be a showing of a title from the state.
• Once a parcel of land is included
within a watershed reservation duly established
that the land continues to be part of such
reservation until clear and convincing evidence
of subsequent declassification is shown.
• Clear and convincing evidence
necessary
National Water Resources Council (NWRC) created by
PD 424 now the
National Waters Resources Board (NWRB)
 NWRB was instituted as a “water resource
regulator”
 Tasked to regulate and control the utilization,
exploitation, development, conservation and
protection of all water resources.
Powers and Functions of NWRB
1. Granting of permits and the imposition of
penalties for administrative violations hereof,
are hereby vested in the Board. (Article 79, PD
1067)
2. Board is hereby empowered to make all
decisions and determinations provided for in
this Code. (Article 79, PD 1067)
3. The Board may deputize any official or agency
of the government to perform any of its
specific functions or activities. (Article 80, PD
1067)
4. Shall promulgate the necessary rules and
regulations which may provide for penalties
consisting of a fine not and/or suspension or
revocation of the water permit or other right
to the use of water.
NOTE: Violations of such rules and regulations
may be administratively dealt with by the
Board. (Article 81, PD 1067)
5. Authorized to impose and collect reasonable
fees or charges for water resources
development from water appropriators
Exception: when it is for purely domestic
purposes. (Article 83, PD 1067)
A. Authority to enter private lands
Empowered to enter upon private lands, with
previous notice to the owner, for the purpose
 of conducting surveys and hydrologic
investigations, and to perform such other acts
as are necessary in carrying out their
functions.
Including the power to exercise the right of
eminent domain. (Article 84, PD 1067)
B. Jurisdiction of the Board over Water
Disputes
The Board shall have original jurisdiction over
all disputes relating to appropriation,
utilization, exploitation, development, control,
conservation and protection of waters within
the meaning and context of the provisions of
this Code.
(Article 88, PD 1067)
• The decisions of the Board on water rights
controversies shall be immediately executory.
• Exception: may be suspended only when a
bond shall have been filed by the appealing
party, unless the suspension is by virtue of an
order of a competent court.
• NOTE: All disputes shall be decided within
sixty (60) days after the parties submit the
same for decision or resolution.(Article 88, PD
1067)
• Board shall have the power to issue writs of
execution and enforce its decisions with the
assistance of local or national police agencies.
(Article 88, PD 1067)
To further understand the concept of the
jurisdiction of the Board. Let’s discuss the
illustrative case of Tanjay Water District vs
Gabaton
• Facts: Tanjay Water District filed Civil Case
No. 8144 against the Municipality of Pamplona
and its official to prevent them from
interfering in the management of the Tanjay
Waterworks system.
• Judge dismissed the case for lack of
jurisdiction over the subject matter, the case
should have been brought first to the National
Water Resources Board in accordance with
Articles 88 and 89 of PD No. 1067, and, as the
parties are government instrumentalities.
ISSUE: Whether respondent Judge acted
without, or in excess of, jurisdiction or with
grave abuse of discretion in dismissing Civil
Case No. 8144 for alleged lack of jurisdiction
over the subject matter.
HELD: NO.
• Inasmuch as Civil Case No. 8144 involves the
appropriation, utilization and control of water.
We hold that the jurisdiction to hear and
decide the dispute in the first instance,
pertains to the Water Resources Board as
provided in PD No. 1067 which is the special
law on the subject.
• The Court of First Instance (now Regional
Trial Court) has only appellate jurisdiction
over the case.
• Thus, the judge was correct in dismissing Civil
Case No. 8144.As previously stated, it involves
the appropriation, utilization, and control of
water. (emphasis supplied)
C.Jurisdiction of Regular Courts
When the case does not involve the settlement of
a water rights dispute, but enjoyment of a right
to water use which a permit was already granted,
REGULAR COURTS HAS JURISDICTION not
NWRB.
Atis vs. Court of Appeals (GR 96401)
• FACTS: Sometime in the middle of August
1986, without plaintiff’s knowledge or
permission, defendant closed the natural
waterway by constructing and building a dike
on the land claimed by Eleuteria Lilian Bobis-
Paculanang thereby completely blocking and
obstructing the flow of the water from the
higher estate.
• Which causes the water in plaintiff’s fishpond
to remain stagnant, and leading to the
poisoning of plaintiff’s growing shrimps,
prawns, bangus (milkfish) and others to the
great and irreparable damage and injury to
plaintiff;
• The trial court directed the demolition of all
dikes.
• Respondent Delatina filed a motion to dismiss
on ff. grounds:
• (1) Trial Court has no jurisdiction over the
subject matter;
• (2) Petitioner failed to exhaust administrative
remedies.
ISSUE:WON the case falls under the
jurisdiction of the trial.
• HELD: YES.
• The case does not involve a determination of
the parties’ respective water rights, which
would otherwise be within the competence
and original jurisdiction of the National Water
Resources Board.
• As held in the case of Amistoso v. Ang, where
there is a grant existing in favor of the
petitioner, and there is a violation of grantee’s
right by closure of the irrigation canal, it is the
enjoyment of the right emanating from the
grant that is in litigation, and the case is not
 within the jurisdiction of the National Water
Resources Board.
• In fine, it is the Regional Trial Court, Branch X,
Dipolog City, and not the National Water
Resources Board, that has jurisdiction over the
instant case. It follows that the doctrine of
exhaustion of administrative remedies on the
basis of which the case was dismissed by both
Courts below, does not come into play.
Same with the said ruling the SC affirmed in
the case of (Bulao vs. Ca G.R. No. 101983) the
jurisdiction of regular courts when the issue
does not involved appropriation, utilization
and control of water.
FACTS: Respondent Belleza filed before the
Municipal Circuit Trial Court of Tayum,
Peñ arrubia, Abra.
[1] a complaint against petitioner Honorio
Bulao, docketed as "Civil Case No. 70-Damages.
Defendant Bulao maliciously constructed a
dam and diverted the flow of the water
towards the west such that the lands of the
plaintiff dried up and the rice plants withered
and died;
“The petitioner moved to dismiss the same on
the ground of lack of jurisdiction.
• He argued that the said case was cognizable by
the Regional Trial Court, the real issue being
one of ownership, possession of the land
where the ditches are located, and real rights
involving the use of ditches.
• The court denied the motion and required him
to answer the complaint. Hence, this appeal.
• ISSUE: WON MCTC was correct in taking
cognizance of the case.
• HELD: YES.
In this case, the petitioner invokes the
connection of cases of Abe-Abe vs.
Manta  and Tanjay Water District vs.  Gabaton.7
It was held in both cases that jurisdiction
pertained to the National Water Resources
Board as the issues involved were the
appropriation, utilization and control of water.
But these cases have no application to the
instant controversy. It is clear from a reading
of the private respondent's complaint in Civil
Case 70 that it is an action for damages
predicated on a quasi-delict.
• The relief he prayed for did not change Civil
Case No. 70 into a water dispute coming
under the jurisdiction of the National Water
Resources Board.
• It follows that since the court a quo had
jurisdiction over the action instituted by the
private respondent, its decision, which has
already become final and executory, can no
longer be disturbed.
• Petition denied.
• D. Rule of Exhaustion of Administrative
Remedies
• The doctrine of exhaustion of administrative
remedies says that a person challenging an
agency decision must first pursue the agency's
available remedies before seeking judicial
review.
ABE-ABE, Et. Al., petitioner’s vs JUDGE LUIS
D. MANTA
FACTS: Petitioners filed an injunction suit
against Pedro P. Romualdo, to secure a judicial
declaration as to the petitioners' prior vested
rights under article 504 of the Civil Code to use
the water of the Anibungan and Tajong Crocks
to irrigate their rice lands located upstream.
• Petitioners sought to enjoin Romualdo from
using the water of the creeks at night to
irrigate his two (2) hectare Rice land
located downstream.
• Romualdo interposed the defense that the
lower court had no jurisdiction over the
subject matter of the suit.
• ISSUE:
WON, the CFI of Camiguin has jurisdiction to
adjudicate a dispute over water rights for
irrigation purposes even if the controversy has
not yet been passed upon by the National
Water Resources Board.
• Held: NO.
• We hold that the petition is devoid of merit. It
is incontestable that the petitioners'
immediate recourse is to ventilate their
grievance with the National Water Resources
Board which, as already noted, is the
administrative agency exclusively vested with
original jurisdiction to settle water rights
disputes-under the Water Code and under
Presidential Decree No. 424.
• That jurisdiction of the Board under section
2(b) of Presidential Decree No. 424 is
reaffirmed in section 88 of the Water Code and
in section 3(d) thereof which provides that the
utilization, exploitation, development,
conservation and protection of water
resources shall be subject to the control and
regulation of the government through" the
Council, now the Board.
• If a litigant goes to court without first pursuing
his administrative remedies, his action is
premature or he has no cause of action to
 ventilate in court. His case is not ripe for
judicial determination.
• Therefore, petition is dismissed for lack of
jurisdiction.
However, in (Metro Iloilo Water District v CA)
the Court ruled that the issue involved raise a
judicial question.
(Metro Iloilo Water District v CA)
FACTS: Petitioner filed nine (9) individual yet identical
petitions for injunction with prayer for preliminary
injunction and / or temporary restraining for
abstracting ground water w/in petitioners territorial
jurisdiction without first securing a water permit from
NWRB and for selling water extracted to commercial
purposes.
• Private respondents uniformly invoked the
lack of jurisdiction of the trial court,
contending that the cases were within the
original and exclusive jurisdiction of the
National Water Resources Board under
Presidential Decree No.1067.
• Petitioners argued that extraction of ground
water and sale thereof w/in its territorial
jurisdiction is a violation of its rights as a
water district.
ISSUE:
WON private respondents' extraction and sale of ground
water within petitioner's service area violated
petitioner's rights as a water district.
• HELD : YES
• The court held that since the petitions focus on
the violations incurred by private respondents
by virtue of their alleged unauthorized
extraction and withdrawal of ground water
within petitioner’s service area, visa-a-vis
petitioner's vested rights as a water district.
• It is at once obvious that the petitions raise a
judicial question. Hence, the rule on
exhaustion of administrative remedies does
not apply.
• It is clear that there is no dispute regarding
petitioner's right to ground water within its
service area.
• It is petitioner's enjoyment of its rights as a
water district which it seeks to assert against
private respondents.
• Thus, we declared that the trial court's
jurisdiction must be upheld where the issue
involved is not the settlement of a water rights
dispute, but the enjoyment of a right to water
use for which a permit was already granted.
(emphasis supplied)
• Query: Can the decisions of the Board on
water rights controversies may be appealed to
the Court of First Instance, now RTC?
• Answer: Yes. Given that it is in the province
where the subject matter of the controversy is
situated within fifteen (15) days from the date
the party appealing receives a copy of the
decision, on any of the following grounds:
• 1) Grave abuse of discretion;
• (2) Question of law; and
• (3) Questions of fact and law. (Article 89, PD
1067)
Penalties
• The following acts shall be penalized by
suspension or revocation of the violator’s
water permit or other right to the use of water
and/or a fine of not exceeding One Thousand
Pesos (P1,000.00), in the discretion of the
Board: (Article 90, PD 1067)
• a. Appropriation of subterranean or ground
water for domestic use by an overlying
landowner without registration required by
the Board.
• b. Failure to comply with any of the terms or
conditions in a water permit or a water rights
grant.
• c. Unauthorized use of water for a purpose
other than that for which a right or permit was
granted.
• d. Unauthorized sale, lease, or transfer of
water and/or water rights, and etc. (please
refer to Article 90, PD 1067 )
• (A) Fine of not exceeding Three Thousand
Pesos (P3,000.00) or imprisonment for not
more than three (3) years, or both shall be
imposed upon any person who commits any of
the following acts: (Article 91, PD 1067)
• 1. Appropriation of water without a water
permit, unless such person is expressly
exempted from securing a permit by the
provisions of this Code.
• 2. Unauthorized obstruction of an irrigation
canal.
• 3. Cultivation of a river bed, sand bar or tidal
flat without permission.
• 4. Malicious destruction of hydraulic works or
structure valued at not exceeding Twenty-Five
Thousand Pesos (P25, 000.00).
• (B)Fine exceeding Three Thousand Pesos
(P3,000.00) but not more than Six Thousand
Pesos (P6,000.00) or imprisonment exceeding
three (3) years but not more than six (6) years,
or both such fine and imprisonment on any
person who commits any of the following acts:
 • 1. Distribution for public consumption of
water which adversely affects the health and
safety of the public.
• 2. Excavation or enlargement of the opening of
a hot spring without permission.
• 3. Unauthorized obstruction of a river or
waterway, or occupancy of a river bank or
seashore without permission.
• 4. Establishment of a cemetery or a waste
disposal area near a source of water supply or
reservoir for domestic municipal use without
permission.
• (C ) Fine exceeding Six Thousand Pesos
(P6,000.00) but not more than Ten Thousand
Pesos (P10,000.00) or imprisonment
exceeding six (6) years but not more than
twelve (12) years, or both such fine and
imprisonment upon any person who commits
any of the following acts:
• 1. Misrepresentation of citizenship in order to
qualify for water permit.
• 2. Malicious destruction of hydraulic works or
structure, valued at more than One Hundred
Thousand Pesos (P100,000.00).
• If the offense is committed by a corporation,
trust, firm, partnership, association or any
other juridical person, the penalty shall be
imposed upon the President, General Manager.
• If the offender is an alien, he shall be deported
after serving his sentence, without further
proceedings.
• After final judgment of conviction, when the
public interest so requires, order the
suspension or dissolution of such corporation,
trust, firm, partnership, association or juridical
person. (Article 92, PD 1067).
WATER DISTRICTS (PD 198, as amended by PD 768,
and PD 1479)
CREATION OF WATER DISTRICTS
PD 198, otherwise known as the “Provincial
Water Utilities Act of 1973” as amended by PD 768 and
PD 1479, authorizes the formation, lays down the powers
and functions, and governs the operation of water
districts throughout the country.
Section 2. Declaration of Policy. - The creation,
operation, maintenance and expansion of
reliable and economically viable and sound
water supply and wastewater disposal system
for population centers of the Philippines is
hereby declared to be an objective of national
policy of high priority. For purpose of
achieving said objective, the formulation and
operation of independent, locally controlled
public water districts is found and declared to
be the most feasible and favored institutional
structure. To this end, it is hereby declared to
be in the national interest that said districts be
formed and that local water supply and
wastewater disposal systems be operated by
and through such districts to the greatest
extent practicable. To encourage the
formulation of such local water districts and
the transfer thereto to existing water supply
and wastewater disposal facilities, this Decree
provides the general act the authority for the
formation thereof, on a local option basis. It is
likewise declared appropriate, necessary and
advisable that all funding requirements for
such local water systems, other than those
provided by local revenues, should be
channeled through and administered by an
institution on the national level, which
institution shall be responsible for and have
authority to promulgate and enforce certain
rules and regulations to achieve national goals
and the objective of providing public
waterworks services to the greatest number at
least cost, to effect system integration or joint
investments and operations whenever
economically warranted and to assure the
maintenance of uniform standards, training of
personnel and the adoption of sound operating
and accounting procedures.
PD 198 is the source of authorization and
power to form and maintain a water district. Once
formed, a district is subject to its provisions and is not
under the jurisdiction of any political subdivision.
Section 3. Definitions. - As used in
this Decree, the following words and terms
shall have the meanings herein set forth,
unless a different meaning clearly appears
from the context. The definition of a word or
term applies to any of its variants.
(a) Act. This Provincial Water Utilities Act of
1973.
"(b) Appointing Authority. The person
empowered to appoint the members of the
board of Directors of a local water district
depending upon the geographic coverage and
population make-up of the particular district.
In the event that more than seventy-five
percent of the total active water service
connections of a local water districts are
within the boundary of any city or
municipality, the appointing authority shall be
the mayor of the city or municipality, as the
case may be; otherwise, the appointing
authority shall be the governor of the province
within which the district is located: Provided,
That if the existing waterworks system in the
city or municipality established as a water
district under this Decree is operated and
managed by the province, initial appointment
shall be extended by the governor of the
province. Subsequent appointments shall be as
specified herein. (768)
 "If portions of more than one province are
included within the boundary of the district,
and the appointing authority is to be the
governor, then the power to appoint shall
rotate between the governors involved with
the initial appointments made by the governor
in whose province the greatest number of
service connections exists." (768)
(c) Administration. The Local Waters Utilities
Administration chartered in Title III of this
Decree.
(d) NEDA. The National Economic and
Development Authority.
(e) Board or Board of Directors. The Board of
directors of a district.
(f) Contracts. All agreements, including leases,
conveyances and obligations.
(g) District. A local water district formed
pursuant to Title II of this Act.
(h) Local Water Utility. Any district, city,
municipality, province, investor-owned public
utility or cooperative corporation which owns
or operates a water system serving an urban
center in the Philippines, except that said term
shall not included the Metropolitan
Waterworks and Sewerage System (MWSS) or
any system operated by the Bureau of Public
Work as successor to the Wells and Springs
Department of the National Waterworks and
Sewerage Authority.
(i) Person. A natural person, corporation,
cooperative, partnership, association, city,
municipality or other juridical entity.
(j) Property. All real and personal property,
including but not limited to: water, water
rights, works, easements, rights of way.
(k) Street. Includes road, valley, avenue,
highway or other public way.
(l) Trustee or Board of Trustees. The Board of
trustees of the Administration.
FUNCTIONS
Under PD 198, water districts may be created
by the different Local legislative bodies by the passage of
a resolution to this effect, subject to the terms of the
Decree.
The primary function of these water districts is
to sell water to residents within their territory, under
such schedules of rates and charges as may be
determined by their boards. They shall manage,
administer, operate, and maintain all watersheds within
their territorial boundaries, safeguard and protect the
use of the waters therein, supervise and control
structures within their service areas, and prohibit any
person from selling or otherwise disposing of water for
public purposes within their service areas where district
facilities are available to provide such service.
Section 25 - 31 (Powers)
Section 25 – Authorization
Section 26 – Acquisition of Waterworks
Section 27 – Sale of Water
Section 28 – Sewerage
Section 29 – Rights of Way
Section 30 – Contracts
(a) Cooperation. Agreement with the
Government of the Philippines or any of its
agencies or political subdivisions for the
cooperative or joint performance of any
function of the district.
"(b) In-Lieu Share. As an incident to the
acquisition of the existing water system of a
city, municipality, or province, a district may
enter into a contract to pay in-lieu share for
such utility plant, an annual amount not
exceeding three percent (3%) of the district's
gross receipts from water sales in any year:
Provided, however, That no contract of this
nature shall be executed during the first five
years of the existence of the district; and
Provided, further, That the Board of Directors
shall determine that such contract will not
adversely affect or impair the fiscal position
and operations of the district as verified by the
Administration." (768)
(c) MWSS Agreement. In the event the city,
municipality or province has not reached
agreement with the Metropolitan Waterworks
and Sewerage System pursuant to Sections 15
and 17 of R.A. 6234, a district may, with the
consent of the local government, act for and in
behalf of the local interests in negotiating and
executing such contract for final settlement of
the consequences of MWSS involvement in the
operation of the water system.
Section 31 – Protection of Waters and
Facilities of Districts
"(c) Prohibit any person, firm or corporation
from vending, selling, or otherwise disposing
of water for public purposes within the service
area of the district where district facilities are
available to provide such service, or fix terms
and conditions by permit for such sale or
disposition of water.
(e) take over the management, administration,
operation and maintenance of all watersheds
within its territorial boundaries." (1479)
Section 37 – 41 (Revenues)
"Section 37. Rates and Charges Water. A
district may sell water under its control under
schedules of rates and charges as may be
determined by the Board, to any and all water
users within the district. Said schedule may
provide for differential rates for different
categories of use and different quantity blocks.
The district, as far as practicable, shall fix such
rates and charges for water as will result in
revenues…
 CONDITIONS UNDER WHICH WATER DISTRICTS
MAY OPERATE
The Decree specifies the terms under which
water districts may be formed and operate. It prescribes,
particularly the (1) name by which a water district shall
be known, and (2) the number and qualifications of the
members of the board of directors, and other specifics.
Section 6. Formation of District. This
Act is the source of authorization and power to
form and maintain a district. For purposes of
this Act, a distinct shall be considered as a
quasi-public corporation performing public
service and supplying public wants. As such, a
district shall exercise the powers, rights and
privileges given to private corporations under
existing laws, in addition to the powers
granted in, and subject to such restrictions
imposed, under this Act. To form a district, the
legislative body of any city, municipality or
province shall enact a resolution containing
the following:
(a) The name of the local water
district, which shall include the name of the
city, municipality, or province, or region
thereof, served by said system, followed by the
words "Water District". (1479)
"(b) A description of the boundary of the
district. In the case of a city or municipality,
such boundary may include all lands within
the city or municipality. A district may include
one or more municipalities, cities or provinces,
or portions thereof: Provided, That such
municipalities, cities or provinces, or portions
thereof, cover a contiguous area. (768) 3
"((c) A statement completely transferring any
and all waterworks and/or sewerage facilities
managed, operated by or under the control of
such city, municipality or province to such
district upon the filing of resolution forming
the district. (d) A statement identifying the
purpose for which the district is formed, this
shall include those purposes outlined in
Section 5 above. (1479)
"(e) The names of the initial directors of the
district with the date of expiration of the term
of office for each which shall be on the 31st of
December of first, second, or third even-
numbered year after assuming office, as set
forth in Section 11 hereof. (f) A statement that
the district may only be dissolved on the
grounds and under the conditions set forth in
Section 44 of this Title. (768)
(f) A statement that the district may only be
dissolved on the grounds and under the
conditions set forth in Section 44 of this Title.
(g) A statement acknowledging the powers,
rights and obligations as set forth in Section 36
of this Title.
WATER DISTRICTS ARE QUASI – PUBLIC
CORPORATIONS
The juridical entities created and organized
under PD 198 are considered quasi-public corporations,
performing public services and supplying public wants.
They are authorized to exercise the powers expressly
granted by the Decree, those which are necessarily
implied from or incidental to said powers, the power of
eminent domain which shall however be subject to review
by the administration, and powers, rights, and privileges
given to private corporations under existing laws.
INCREASE OF WATER RATES
Public hearing is required on increasing water rates. The
rates are subject to review by the Local Water Utilities
Administration (LWUA), which is tasked to determine
whether the establishment of the rates complies with the
law. The rates presented in the hearing should be the
same rates submitted to the LWUA for review and
approval.
DISSOLUTION OF WATER DISTRICTS
"Section 45. Dissolution. A district may be dissolved by
resolution of its board of directors filed in the manner of
filing the resolution forming the district: Provided,
however, That prior to the adoption of any such
resolution: (1) another public entity has acquired the
assets of the district and has assumed all obligations
and liabilities attached thereto; (2) all bondholders and
other creditors have been notified and they consent to
said transfer and dissolution; and (3) a court of
competent jurisdiction has found that said transfer and
dissolution are in the best interest of the public." (768)
Under the law, it is the LWUA which is the administrative
body involved in the voluntary dissolution of a water
district; it is with it that the resolution is filed.
Where, however, the action is in the nature of a
mandamus suit, seeking to compel the board of directors
of the water district and its alleged co-conspirators to go
through the process for the dissolution of the water
district, the action falls within the general jurisdiction of
the Regional Trial Court.
THE LOCAL WATER UTILITIES ADMINISTRATION
(LWUA)
Powers and Functions
PD 198, under Sections 49 and 50 also created The Local
Water Utilities Administration, attached to the Office of
the President, to function primarily as a specialized
lending institution for the promotion, development, and
financing of local water utilities. It has the following
specific powers and duties under Section 50.
(1) prescribe minimum standards and regulations in
order to assure acceptable standards of construction
materials and supplies, maintenance, operation,
personnel training, accounting and fiscal practices for
local water utilities;
(2) furnish technical assistance and personnel training
programs for local water utilities;
(3) monitor and evaluate local water standards; and
(4) effect systems integration, joint investment and
operations, district annexation and deannexation
whenever economically warranted."
EO 123 s. 2002
Under section 6 of this executive order, the
LWUA shall cease and desist with its practice of
regulating the water tariffs of water districts which shall
hereinafter be undertaken by the NWRB. However,
LWUA, consistent with its mandate under PD 198, may
continue reviewing the rates of water districts which it
has financial exposure, with the end view of ensuring
their financial viabilities.
LWUA ADJUDICATORY FUNCTIONS
The LWUA does not have any adjudicatory
functions. However, it has quasi-judicial power only as
regards to rates or charges fixed by the water districts
which it may review to establish compliance with the
provisions of PD 198. This is appealable to the National
Water Resources Board, and shall be further be
appealable to the Office of the President.
The NWRB has original jurisdiction over all
disputes relating to appropriation, utilization,
exploitation, development, control, conservation and
protection of waters within as provided in PD 1067. Its
decision is appealable at the regional trial court where
the province of the district is located.
Last Paragraph of Section 63:
The rates or charges established by such local
district, after hearing shall have been
conducted for the purpose, shall be subject to
review by the Administration to establish
compliance with the abovestated provisions.
Said review of rates or charges shall be
executory and enforceable after the lapse of
seven calendar days from posting thereof in a
public place in the locality of the water district,
without prejudice to an appeal being taken
therefrom by a water concessionaire to the
National Water Resources Council whose
decision thereon shall be appealable to the
Office of the President. An appeal to the
Council shall be perfected within thirty days
after the expiration of the seven-day period of
posting. The Council shall decide on appeal
within thirty days from perfection. (1479)
Case:
MERIDA VS. BACARRO
Facts:
Merida Water District, a GOCC, received a letter from
LWUA that its proposed water rates were confirmed
which contained a progressive rate increase over a
certain period. Prior to this, a public hearing was
conducted for this purpose.
Merida implemented a P90 increase for the first 10
cubic meters of consumption. Thereafter, petitioner
issued a notice of disconnection to concessionaires who
refused to pay the water rate increase and did not
render service to those who opted to pay the increase in
installment basis.
Respondents filed a petition for injunction against
Merida Water District before the Regional Trial Court to
enjoin the latter to implement the water rate increase.
Respondents claim that that the petitioners violated
Letters of Instruction (LOI) no. 700 by: (1)
implementing a water rate increase of 60% of the
current rate; and (2) failing to conduct a public hearing
for the imposed P90.
Petitioners filed a Motion to dismiss claiming that the
petition lacked a cause of action as they failed to
exhaust administrative remedies under PD 198, as
amended by PD 768, and PD 1479.
The RTC denied the Motion to dismiss, and the CA
upheld the RTC decision.
Issue:
1. Whether or not the RTC has jurisdiction
2. Whether or not the respondents failed to
exhaust administrative remedies
Ruling:
1. Yes, the RTC has jurisdiction.
Under PD 1479, SEC. 11. The last paragraph of Section
63 of the same decree is hereby amended to read as
follows:
The rates or charges established by such local district,
after hearing shall have been conducted for the purpose,
shall be subject to review by the Administration to
establish compliance with the abovestated provisions.
Said review of rates or charges shall be executory and
enforceable after the lapse of seven calendar days from
posting thereof in a public place in the locality of the
water district, without prejudice to an appeal being
taken therefrom by a water concessionaire to the
[NWRB] whose decision thereon shall be appealable to
the Office of the President. An appeal to the [NWRB]
shall be perfected within thirty days after the expiration
of the seven-day period of posting. The [NWRB] shall
decide on appeal within thirty days from perfection.
After review by the LWUA, a water concessionaire may
appeal the same to the NWRB, and the NWRB's decision
may then be appealed to the Office of the President.
Neither P.D. No. 1067, as cited by petitioners, nor P.D.
No. 1479, which governs the procedure for the review
of water rates, expressly states that the NWRB has
original and exclusive jurisdiction over a dispute
concerning the increase of water rates. Moreover,
petitioners failed to cite any law which impliedly grants
the NWRB original and exclusive jurisdiction to resolve
a dispute regarding the increase of water rates. A grant
of exclusive jurisdiction cannot be implied from the
language of a statute in the absence of a clear legislative
intent to that effect. An administrative agency with
quasi-judicial power is a tribunal of limited jurisdiction,
and "its jurisdiction should be interpreted in strictissimi
juris."
Respondents failed to exhaust administrative remedies
by stopping their pursuit of the administrative process
before the NWRB. Their failure to exhaust
administrative remedies, however, does not affect the
jurisdiction of the RTC. Non-exhaustion of
administrative remedies only renders the action
premature, that the "claimed cause of action is not ripe
for judicial determination."
2. Yes, the respondents failed to exhaust their
administrative remedies. Although the doctrine of
exhaustion does not preclude in all cases a party from
seeking judicial relief, cases where its observance has
been disregarded require a strong showing of the
inadequacy of the prescribed procedure and of
impending harm.
Respondents justify their failure to observe the
administrative process on the following exceptions to
the doctrine of exhaustion of administrative remedies:
(1) patent illegality; and (2) a denial of due process.
However, respondents fail to show that the instant case
merits the application of these exceptions.
First, respondents claim that Merida Water District's
increase of the water rate is patently illegal for violating
LOI No. 700, which provides that the LWUA shall:
(f) Ensure that the water rates are not abruptly
increased beyond the water users' ability to pay, seeing
to it that each increase if warranted, does not exceed
60% of the current rate.
The cases where this Court has upheld the non-
observance of exhaustion of administrative remedies
because of patently illegal actions35 do not involve
issues that require the consideration of the existence
and relevancy of specific surrounding circumstances
and their relation to each other. In these cases, the
question of patent illegality arose from a set of
undisputed facts. Here, certain facts need to be resolved
first, in order to arrive at a conclusion of patent
illegality. The LWUA confirmed the Rate Schedule of
Approved Water Rates for Merida Water District, a
schedule that outlines different rates due to the
progressive increase of water rates. Thus, the
determination of the current rate from which to
measure the allowable increase prescribed by LOI No.
700 is a factual matter best left to the expertise of the
NWRB.
Second, respondents claim that Merida Water District
violated due process by failing to conduct a hearing for
the purpose of establishing a water rate increase.
Section 11 of P.D. No. 1479 provides that hearing is a
requirement in establishing water rates:
The rates or charges established by such local
district, after hearing shall have been conducted for
the purpose, shall be subject to review by the
Administration to establish compliance with the
abovestated provisions. (Emphasis supplied)
Jurisprudence affirming the failure to observe the
doctrine of exhaustion due to a denial of due process
involves instances when the party seeking outright
judicial intervention was denied the opportunity to be
heard.37 Here, respondents admit that Merida Water
District conducted a public hearing on October 10, 2001
regarding the increase of water rates. The existence of a
hearing for this purpose renders the allegation of a
denial of due process without merit.
THE SEC HAS NO SUPERVISORY POWERS OVER
WATER DISTRICTS
Case:
MARILAO VS. IAC
Facts:
Marilao Water District was formed by
resolution of the Sangguniang Bayan of the Municipality
of Marilao, which was thereafter forwarded to LWUA
and duly filed after ascertaining that it conformed to the
requirements of the law.
The petitioners, Marilao Water Consumers
Association Inc., issued a petition to the Regional Trial
Court for the dissolution of the water district based on
the allegations that there had been no real public
hearing prior to the creation of the water district, the
waterworks system was turned over without
compensation and a subsidy was illegally authorized,
the water district was run with negligence, apathy, and
mismanagement, and the consumers were forced to
organize themselves into a corporation to demand
adequate and sufficient supply of water and the efficient
management of the waterworks of Marilao, Bulacan.
The Marilao Water District filed a
counterclaim denying the material allegations and that
the matter of the water district’s dissolution fell under
the original and exclusive jurisdiction of the Securities
and Exchange Commission (SEC).
The petitioners argued that the Marilao Water
District had not been organized under the Corporation
Code, thus the SEC has no jurisdiction over a proceeding
for its dissolution, and that it is within the jurisdiction of
the regular courts.
The RTC ruled in favor of the respondents
ruling that the SEC has exclusive jurisdiction. The IAC
affirmed the RTC ruling.
Issue:
Whether or not the SEC has original and
exclusive jurisdiction.
Ruling:
No. The juridical entities known as water
districts created by PD 198, although considered as
quasi-public corporations and authorized to exercise
the powers, rights and privileges given to private
corporations under existing laws are entirely distinct
from corporations organized under the Corporation
Code. The Corporation Code has nothing whatever to do
with their formation and organization, all the terms and
conditions for their organization and operation being
particularly spelled out in PD 198. The resolutions
creating them, their charters, in other words, are filed
not with the Securities and Exchange Commission but
with the LWUA. The SEC which is charged with
enforcement of the Corporation Code as regards
corporations, partnerships and associations formed or
operating under its provisions, has no power of
supervision or control over the activities of water
districts.
All these argue against conceding jurisdiction in the
Securities and Exchange Commission over proceedings
for the dissolution of water districts. For although
described as quasipublic corporations, and granted the
same powers as private corporations, water districts
are not really corporations. They have no incorporators,
stockholders or members, who have the right to vote for
directors, or amend the articles of incorporation or by-
laws, or pass resolutions, or otherwise perform such
other acts as are authorized to stockholders or
members of corporations by the Corporation Code. In a
word, there can be no such thing as a relation of
corporation and stockholders or members in a water
district for the simple reason that in the latter there are
no stockholders or members. Between the water district
and those who are recipients of its water services there
exists not the relationship of corporation-and-
stockholder, but that of a service agency and users or
customers. There can therefore be no such thing in a
water district as "intra-corporate or partnership
relations, between and among stockholders, members
or associates (or) between any or all of them and the
corporation, partnership or association of which they
are stockholders, members or associates, respectively,"
within the contemplation of Section 5 of the
Corporation Code so as to bring controversies involving
them within the competence and cognizance of the SEC.
The controversy, therefore, between the Consumers
Association, on the one hand, and Marilao District and
its co-respondents, on the other, is not within the
jurisdiction of the SEC.

Additional Case:

TANJAY VS. GABATON

Facts:
Petitioner, Josefino Datuin, filed a complaint
for illegal dismissal against respondent Tarlac Water
District in the Department of Labor and Employment
(DOLE) which decided in his favor. Upon the
respondent’s motion for reconsideration, the National
Labor Relations Commission (NLRC) reversed the
decision and dismissed the complaint for “lack of
jurisdiction” due to water districts being created under
a special law (PD 198) thus its officers and employees
belong to the civil service.

Issue:
Whether or not the officers and employees of
Water Districts are under the jurisdiction of the Civil
Service Rules and Regulations.

Ruling:
Yes. Although Section 25 of PD 198 exempted
its employees and officers from the jurisdiction of the
civil service, PD 1479 repealed this specific section.
Thus, water districts being Government Owned and
Controlled Corporation, they are now within the
jurisdiction of the Civil Service as all government
employees are.