The Richest Man in the Philippines Is Taking Over the Country’s Water. These People Are Out To Stop Him.

The Richest Man in the Philippines Is Taking Over the Country’s Water. These People Are Out To Stop Him.
Photo Credit: Reuters / TPG Images

What you need to know

Manny Villar, a billioniare, is behind an effort to privatize water supplies throughout the Philippines with the company Primewater Incoporated. Citizens, unions, and political leaders are organizing against it.

City councilor Wilson “Jun” Gamboa Jr. is running for vice-mayor in his hometown of Bacolod City. He is the only candidate on the town’s independent ticket. He is up against the Grupo Progreso slate, headed by sitting Mayor Evelio Leonardia. By the estimates of Gamboa’s office, Leonardia has access to billions of pesos for his election-related expenses. He is, by all accounts, a traditional, patron-client style politician. Gamboa calls Leonardia a “warlord.” 

Among the central issues raised by Gamboa is the city’s water supply. In November 2020, Primewater Incorporated took over the Bacolod City Water District (BACIWA) overhauling the city’s water supply as a public utility. By New Year’s Day 2021, 59 regular unionized employees and one non-union worker were laid off and barred from entering the premises.

Since Primewater entered, an unsavory turbidity has appeared in the city’s water supply. Water charges have gone up. And what was once a free-flowing supply through the public’s faucets has now become marred by interruptions and inconsistencies.

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Photo Credit: Courtesy of Wilson Gamboa’s Office
City councilor Wilson “Jun” Gamboa Jr. a candidate for Vice Mayor in Bacolod City, speaking at a protest.

“I have to fill up drums of water in the morning before 4:00 a.m., because by that time, the mud starts to seep through. In the mornings, it’s as if coffee is coming through our faucets, not water,” Berlita Ante, a leader of neighborhood associations in the Bacolod slums told The News Lens International

“Then I have to let the faucet run for at least 45 minutes, sometimes longer before what comes out of it is somewhat clear and usable. That’s why our bills are soaring. At multiple times in the day, you’d have to just leave the faucet running to get rid of the dirt inside the pipes,” she added. 

BACIWA is a top-rated water district that earns over 100 million pesos in annual net income. Gamboa’s campaign hinges on a call to reverse the Joint-Venture Agreement (JVA) between the city and Primewater that allowed the corporation to take hold of and profit from the city’s water. Leonardia was one of the primary instruments of the deal that was cemented in November 2020. 

During his term in the city council, Gamboa penned four resolutions urging local and national officials to review the JVA. He says the appeals have fallen on deaf ears within the bureaucracy. “All profits are collected by Primewater. Local governments get practically nothing. They call it a ‘joint-venture’ but in reality, it is privatization,” he said. 

Other private companies have entered into JVAs with water districts with profit sharing arrangements. But Primewater deals leave the water district with only a function to monitor and a minimal staff of up to 25 personnel only. 

Alongside Gamboa are the BACIWA Employees Union (BEU) and other consumer groups. Their adversary, Primewater, is owned by the country’s richest man, Manny Villar. He has access to vast financial and political resources. He leads the Nacionalista Party in mainstream politics, his wife Cynthia is a Senator, his son Paolo runs the water company and another son Mark was head of the Department of Public Works and Highways for most of President Rodrigo Duterte’s term and is now running for a seat in the senate himself. 

But one might say that Gamboa inherited the battle for safeguarding public utilities. “It’s in my blood, I guess,” he muses. His father Attorney Wilson Gamboa Sr. won a landmark case against the takeover of major Philippine telecommunications company PLDT by foreign entities. “Water and power are also public utilities and they should remain with the Filipino people. If we hand it over or sell out, it becomes for profit above everything else. That is the trend now, public utilities are eaten up by big companies including multinationals. It’s a question of national patrimony because these utilities are imbued with public interest and general welfare,” said Gamboa.

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Photo Credit: Amlig Tubig - Bacolod
Protesters against the JVA between the Bacolod City Water District and Primewater in Bacolod City, May 6, 2022.

Ahead of the JVA signing Gamboa also led the “filing of a case at the regional trial court in October 2020 for the nullification of the JVA, citing that it is highly disadvantageous and onerous. We lost that case, so we elevated it to the court of appeals. Last March, the appeals court finally asked us to file a follow up brief. That’s a good sign and we hope to take this to the Supreme Court.”

The scope of Primewater is much broader than managing the waters of a single city. Primewater is the fastest growing water company in the country. Prior to Duterte’s presidency and appointment of Mark Villar, the company only held contracts with 13 water districts, acquired over a decade. Since the start of both of their terms in 2016, a tally by the citizen’s group Water for the People Network and Water System Employees Response (WATER) shows that the company had assumed control over 85 out of 584 water districts. They estimate that there are hundreds of applications for JVAs all over the country to be processed in due time. 

The BEU is the only group of water district employees actively resisting privatization by Primewater. And Gamboa explains, “Unfortunately, I am the only current public official against the takeover.” Both hope to stand in Primewater’s way. 

Union Dues

The BACIWA Employees Union has been vocal against the deal. When it was approved, employees were offered two choices: assimilation by Primewater with fewer work benefits than before, or an early retirement package. 60 employees under the BEU sought a third option to remain in government service, according to Benjie Oray, BEU Vice-President. In other words, a total rejection of the privatization. “That led the Board of Directors to file a resolution, terminating our employment and declaring our position as redundant since January 1, 2021,” Oray said.

Oray remembers his final days of employment in the last months of 2020, when the Primewater deal was being finalized. He’d clock in, lounge about the office looking for a place to pass the time while brooding throughout his entire shift. He used to be the executive assistant to the General Manager.

He disclosed that his former boss and BACIWA General Manager Atty Juliana Carbon refused to approve the JVA. From what Oray observed, the other members of the Board were in favor of JVA, as well as the mayor, Evelio Leonardia. And so Carbon “was forced to exit her job, because she was pressured out of it. Other members of the board were prepared to take her to court on a myriad of lawsuits. With Mayor Leonardia, the Board replaced her with engineer Michael Soliva, who is basically the Mayor’s puppet.” Carbon left her post in November 2020. Within the month, Soliva signed the JVA. (The mayor is a member of Villar’s Nacionalista Party.)

The BEU surmises that Senator Cynthia Villar, also head of the senate committee on public utilities, “scratched the Mayor’s back” who in return worked for the passage of the JVA with the Board of Directors. 

But the BEU is not down and out. Barring any sudden lockdown restrictions, they troop to the BACIWA offices every month, sometimes every week in protest of the worsening services and the illegal termination of unionized regular workers. 

BEU chairperson Leny Espina said, “Last February, Primewater added a 12% value added tax to the rates, further spiking water bills. But services are getting worse. Everyone needs to let their faucet run for a certain amount of time just to get the dirt out. Some places lose water connections for at least five hours a day. My home has no water from 9:00 p.m. to 5:00 a.m.”

The union filed a case with the Civil Service Commission (CSC) on the month of their dismissal and in August 2021, the regional CSC office declared that all 60 employees be reinstated with full back pay. This order was appealed by the Board of Directors. The matter is now set to be taken up by the CSC’s national office. 

The regional CSC decision is a breakthrough victory for the union. But the year spent without work has taken a toll on employees. 

Water Mafia

Even Calajate, an engineer, speaks with pride about his 18 years of service to the water district of San Jose Del Monte in the province of Bulacan. He spent that time as director of the board, and 14 of those years as chairman. When he began in 1989, about 1,300 households were connected to the public pipe system. By his last year in 2006, 72,000 households had access to public water. In the same year, the Local Water Utilities Administration (LWUA), the state body managing water districts, recognized Calajate’s office as an Outstanding Water District in the country. 

Calajate is now 72 years old and would much rather spend time gardening and growing mangoes. But often he is still consulted by past and present employees. Since Primewater came to his town, he has been called into action with increasing regularity.

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Photo Credit: Courtesy of Even Calajate
Engineer Even Calajate at home.

He first encountered the Villars in the early 2000s when the family was keen to strike a deal for water access. Manny Villar has numerous subdivision projects built on San Jose Del Monte land. Calajate remembers that “he wanted us to shoulder the cost for transmission pipes from our end, going to his subdivision projects. But we said that as a wholly private endeavor, his company has to come up with his own water supply. The trouble is, that costs extra. They’d need to find a source, run a deep well, and possibly a small treatment facility if the water source was found to have an unsafe mineral content.”

Fast forward to 2016, and Florida Robes, Congresswoman to Calajate’s town, took to the floor of the House of Representatives, lamenting the “water crisis” plaguing her constituents. She hinted that a privately managed concessionaire would do much better without the red tape. This puzzled Calajate. Their water district, to his knowledge, was in great shape financially, with 187 million pesos of revenue in particular that year. He had already recommended a reduction of water charges because as he said, “We’d already built three treatment plants at the time. We had some savings for emergencies. And we are a public utility, not a for-profit institution. Some of what we earn should go back to the people.”

Despite this, Congresswoman Robes and her husband, Mayor Arthur Robes, maintained their position. (Calajate witnessed the couple having Senator Cynthia Villar as godmother to their marriage.) On March 28, 2017, a purportedly unsolicited proposal from Primewater for the “Financing Rehabilitation, Improvement, Expansion, Operation, Maintenance at Septage System of the Water District” arrived at the local government offices. Calajate had friendly relations with the mayor and went to his office to demand an explanation. Mayor Robes gave a retelling of his wife’s speech. The mayor’s account was not in keeping with the facts Calajate knew of the water district’s situation. 

The old engineer assembled neighborhood groups and civil society forces. By October 2 of that year, the newly launched Alliance for Consumer Protection (APC) was holding a protest march against the entry of Primewater.

Four days later, a major city water tank exploded, killing four people and injuring 44. According to news reports by local media, the maintenance personnel said the seven year old water tank was well-maintained and could have been used for another 50 years. The tank wasn’t pressurized either which meant that it could not have exploded on its own, thus amplifying suspicions around the incident. 

In any case, it gave impetus for both the Mayor-Congresswoman tandem to wage their crusade against the city’s supposed water crisis. And on May 16, 2018, Primewater announced its JVA with the water district was now in effect. “It was like waking up to a nightmare,” said Calajate. 

A familiar pattern followed: murky, unreliable water, higher charges, and layoffs for employees. 

“What hurts more is that the people in this town, strived to keep that water district running smoothly. We built that from nothing and the Villars just come in and take everything,” Calajate said. 

The APC filed cases in court against Primewater and complaints at the Ombudsman without any luck.

Reggie Vallejos, Development studies professor at the University of the Philippines and Water for the People spokesman, likens the dealings of the Villar family to that of a syndicate. He says they use their political and business power to bully people into getting their way. “These are not joint ventures, nor takeovers. They’re handovers to the mob.” 

LWUA administrator Jeci Lapus publicly stated in March 2021 that Primewater’s dealings should be deemed illegal for misrepresentation. The agreement purports to be an equal investment and sharing of returns, but the reality is only the company benefits. “Joint ventures are a good idea, but the implementation should be correct. The definition of a JVA should be a pooling of resources, not pulling one’s leg,” he said.

The LWUA answers to Mark Villar’s office. Lapus shared that in the past he had asked for financial statements of water districts, but he was told they don’t answer to him anymore by the Office of The Government Corporate Counsel, nor did the Villar-headed DPWH intervene to support Lapus’ challenge. Lapus surmised that the JVA was designed to keep water districts as a public entity in name, avoiding certain taxes and an audit by the state, while its management and profits were privately accumulated. He planned to submit a position paper to both the DPWH and OGCC, but he passed away in July 2021 of Covid-19.

Gamboa, the BEU, Calajate, and Vallejos agree that Mark Villar has used the DPWH to accelerate the growth of his family’s business and keep offices like the LWUA quiet by not entertaining queries into his private dealings. Primewater pops up whenever there is either a Villar business in the area, like a subdivision or any DPWH construction that needs a water supply. For Vallejos, Primewater’s behavior suggests that it only goes after water districts when it is assured of a profit. 

“It’s true that a lot of water districts are in need of structural adjustments and troubleshooting. But if they say the private sector can jump in to help, then why is Primewater only targeting efficient and profitable water districts? It’s troubling to see a single entity creeping its way towards acquisition and aided by oligarchic and state powers,” Vallejos said. 

Much of Primewater’s fate might be decided this year. At the time of writing, pre-election day, results can swing in either side’s favor. If Gamboa wins his post, it could turn the tide against water privatization. Likewise, if the BEU receives another favorable decision, it could derail any similar moves of the company in the future. Both the Supreme Court and the CSC National Office await them. Although if Mark Villar wins in the senate, the fight could turn much more challenging. Whatever the outcome, Gamboa and the BEU, the David to Primewater’s Goliath, are showing no signs of slowing down. They want to put an end to Primewater’s appropriation of their waters.


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TNL Editor: Nicholas Haggerty (@thenewslensintl)

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