The Philippines has been unable to meetits growing demand for adequate water services. Indeed, theshare of the population with access to water has fallen,particularly among the poor, as a result of frequentpolitical turnover, fragmented regulatory oversight, andlack of coordination among service providers. Manycommunities have struggled with governance issues caused byoverlapping responsibilities among local, provincial, andnational authorities for planning, financing, tariffsetting, and sector oversight. Communities also have beenunable to raise funds for the new connections needed to meetthe rising consumer demand. One province, thanks to thepolitical will of its governor, is exploring how best torespond to the issues of governance and unmet demand. Afterfirst dissolving the local Water District, the province isintroducing an output-based aid approach to water supplyunder a concession contract. The private operator will bepaid on the basis of performance, receiving a payment fromthe government for each connection made to a householdpreidentified as poor.
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