Department of Public Works and

Highways, Government of Philippines

March, 2013

Support for the Nationwide Roll-out of the National Sewerage and

Septage Management Program
Program Operations Manual
 NSSMP Operations Manual

TABLE OF CONTENTS
Page
1 INTRODUCTION TO THE MANUAL 11
CURRENT SITUATION 11
NATIONAL SEWERAGE AND SEPTAGE M ANAGEMENT PROGRAM, NSSMP 12
2 PROGRAM OPERATIONS MANUAL 13
DESCRIPTION 13
OBJECTIVES AND SCOPE 13
M ANUAL STRUCTURE AND ORGANISATION 13
APPLICABLE LAWS, RULES AND POLICIES 17
3 PART A: INSTITUTIONAL FRAMEWORK 18
ROLES AND RESPONSIBILITIES 19
LEAD AGENCY AND NSSMP OFFICE 24
LOCAL IMPLEMENTERS AND PROJECT OFFICES 25
KEY SKILL AND KNOWLEDGE REQUIREMENTS 27
4 PART B: PROJECT CYCLE 28
OVERALL PROCESS 28
SANITATION PLANNING 29
PROCESS WORKFLOW AND DESCRIPTION 29
SUPPORTING DOCUMENTATION 32
TRAINING REQUIREMENTS 32
SEWERAGE AND SEPTAGE SYSTEM DESIGN 33
TECHNOLOGY INTERVENTIONS 34
SEWER SYSTEMS 36
TREATMENT TECHNOLOGY SELECTION 39
SEPTAGE TREATMENT TECHNOLOGIES 41
W ASTEWATER TREATMENT TECHNOLOGIES 43
SEPTAGE MANAGEMENT DESIGN TOOLKIT 49
SEWERAGE DESIGN TOOLKIT 53
TRAINING REQUIREMENTS 54
SUPPORTING ORGANISATIONS 54
PROJECT FEASIBILITY 55
PROCESS WORKFLOW AND DESCRIPTION 55
FINANCIAL TOOLKIT 59
SUSTAINABILITY CHECKLIST 61
TRAINING REQUIREMENTS 61
PROJECT APPLICATION AND SELECTION 62
PROCESS WORKFLOW AND DESCRIPTION 62
APPLICATION FORM 63
PROJECT PRIORITIZATION TOOL 63
ORGANISATION AND DOCUMENTATION REQUIREMENTS 65
TRAINING REQUIREMENTS 66
PROJECT PROCUREMENT 67
PARTICIPATING AGENCIES 67
PROCESS WORKFLOW AND DESCRIPTION 68
SUPPORTING INFORMATION 72
PROJECT CONSTRUCTION 73
PROCESS WORKFLOW AND DESCRIPTION 73
TRAINING REQUIREMENTS 74

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PROJECT OPERATION AND MAINTENANCE 75

SYSTEM MAINTENANCE 75
PROCESS WORKFLOW AND DESCRIPTION 76
INFRASTRUCTURE REHABILITATION 77
MAINTENANCE OF SEPTAGE MANAGEMENT AT THE LOCAL LEVEL 78
PROJECT MONITORING AND EVALUATION 79
PROCESS WORKFLOW AND DESCRIPTION 80
SUPPORTING INFORMATION 88
TRAINING REQUIREMENTS 88
5 PART C: BUDGETING 89
LOCAL BUDGETING 89
PARTICIPATING AGENCIES 89
PROCESS W ORKFLOW AND DESCRIPTION 90
SUPPORTING INFORMATION 92
NATIONAL BUDGETING 93
BUDGET PREPARATION 93
BUDGET LEGISLATION 94
BUDGET EXECUTION 95
BUDGET ACCOUNTABILITY 96
6 PART D: FINANCING 97
PROJECT FINANCING 97
PROCESS WORKFLOW AND DESCRIPTION 98
PARTICIPATING AGENCIES 101
TRAINING REQUIREMENTS 101
PPP OPTION 102
PARTICIPATING AGENCIES 102
PROCESS WORKFLOW AND DESCRIPTION 103
TRAINING REQUIREMENTS 108
6.3 FINANCING SCHEMES 109
7 PART E: COMMUNICATION 110
NSSMP NATIONAL COMMUNICATION STRATEGY 110
PARTICIPATING AGENCIES 111
PROCESS WORKFLOW AND DESCRIPTION 111
7.2 NSSMP LOCAL COMMUNICATION STRATEGY 119
7.2.1 PROCESS DESCRIPTION 119
TRAINING REQUIREMENTS 124
SUPPORTING INFORMATION 124
8 SUPPORTING DOCUMENTS, GUIDELINES AND TEMPLATES 125
INSTITUTIONAL ORGANIZATION AND SUPPORT 126
TASKS, INPUTS, OUTPUTS AND TIMING FOR RESPONSIBLE ORGANIZATIONS 126
SAMPLE BASELINE SURVEY FORM 145
PRIORITIZATION OF SANITATION NEEDS 147
GUIDANCE ON STAKEHOLDER AND PARTNER CONSULTATION 148
LIST OF POTENTIAL STAKEHOLDERS 149
SAMPLE EXECUTIVE ORDER ESTABLISHING A TWG 150
FEASIBILITY ASSESSMENT TASKS AND DOCUMENTATION 153
LIST OF REQUIRED DOCUMENTATION, PERMITS AND CLEARANCES 155
SAMPLE RESOLUTION FOR ADOPTING A LOCAL SUSTAINABLE SANITATION PLAN 156
SAMPLE ORDINANCE FOR SEPTAGE MANAGEMENT 158

SAMPLE MOU BETWEEN WD AND LGU 169

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8.2 ENVIRONMENTAL 177

8.2.1 PHILIPPINE ENVIRONMENTAL IMPACT STATEMENT (EIS) SYSTEM 177
APPLICATION PROCESS 180
APPLICATION FORM 180
FORMAT FOR PROJECT CONCEPT NOTE 198
SAMPLE LETTERS REGARDING APPROVAL OR NON-APPROVAL OF FUNDING APPLICATIONS 199
NUMBER OF FAMILIES AND FAMILY DISBURSEMENTS BY INCOME CLASS AND BY REGION AND TYPE OF
DISBURSEMENT 201
PROCUREMENT PROCESS 219
DETAILED PROCUREMENT PROCEDURES 219
DOCUMENTARY REQUIREMENTS DURING PROCUREMENT 224
SAMPLE PROCUREMENT NOTICE 226
SAMPLE LETTER OF ACKNOWLEDGEMENT OF RECEIPT 228
SAMPLE SHORTLISTING NOTICE 229
SAMPLE LETTER TO FIRMS NOT SHORTLISTED 230
SAMPLE LETTER INVITING FIRMS TO TENDER 231
OUTLINE OF TERMS OF REFERENCE 233
SAMPLE NOTIFICATION LETTER FOR SUPPLY OF W ORKS 234
SAMPLE COVER LETTER REQUESTING SUBMISSION OF SIGNED CONTRACT 235
SAMPLE FORMAT FOR NEGOTIATION REPORT 237
BUDGET AND FINANCING 238
INFORMATION ON POSSIBLE FINANCE SOURCES 238
BASIC FEATURES OF PUBLIC PRIVATE PARTNERSHIP (PPP) OPTIONS 244
ITEMS FOR REVIEW DURING EVALUATION OF PPP PROJECTS 245

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LIST OF FIGURES
Figure 1: NSSMP Implementation Institutional Structure ................................................................................ 18
Figure 2 Institutional Development Flowchart.................................................................................................. 19
Figure 3: Roles of Institutions and Agencies Involved in NSSMP Implementation ......................................... 20
Figure 4: NSSMP Office Organization Chart ................................................................................................... 25
Figure 5: Local Project Office Structure ........................................................................................................... 26
Figure 6: The Project Cycle ............................................................................................................................. 28
Figure 7: Sanitation Planning Workflow Chart ................................................................................................. 29
Figure 8: Sewerage and System Design Process ........................................................................................... 33
Figure 9: Decision Tree for Technology Interventions ..................................................................................... 35
Figure 10: Example of sanitary sewers ............................................................................................................ 36
Figure 11: Example of combined sewer ...................................................................................................... 37
Figure 12: Example of small diameter effluent sewers .................................................................................... 37
Figure 13: Example of condominial sewers ..................................................................................................... 37
Figure 14: Decision Tree for Sewerage Technology Selection ....................................................................... 38
Figure 15: Decision Tree for Septage Treatment ............................................................................................ 40
Figure 16: Example of anaerobic digestion in treatment lagoons .................................................................... 41
Figure 17: Example of anaerobic digestion in treatment lagoons .................................................................... 41
Figure 18: Example of Chemical conditioning and dewatering with activated sludge treatment .................... 41
Figure 19: Example of Chemical stabilization with hydrated lime and effluent treatment ............................... 42
Figure 20: Example of Anaerobic digestion ..................................................................................................... 42
Figure 21: Example of rectangular and circular clarifiers ................................................................................ 43
Figure 22: Decision Tree for Wastewater Treatment System .......................................................................... 45
Figure 23: Example of Sewage Lagoon Systems............................................................................................ 45
Figure 24: Example of Activated Sludge treatment ......................................................................................... 45
Figure 25: Example of Sequencing Batch Reactor (SBR) ............................................................................... 46
Figure 26: Example of Anaerobic/aerobic System .......................................................................................... 46
Figure 27: Example of Oxidation Ditch ............................................................................................................ 47
Figure 28: Example of Rotating Biological Contactors .................................................................................... 47
Figure 29: Example of On-Site Systems for Point Sources ............................................................................. 48
Figure 30: Septage Management Design Tool ................................................................................................ 49
Figure 31: Feasibility Process Workflow Chart ................................................................................................ 56
Figure 32: Project Selection Process Workflow ............................................................................................... 62
Figure 33: Project Prioritization Tool................................................................................................................ 64
Figure 34: Procurement and Tendering Process ............................................................................................. 68
Figure 35: Infrastructure Projects Procurement Process ................................................................................. 70
Figure 36: Project Management and Pre-Construction/Construction. Process Workflow ............................... 73
Figure 37: O&M Workflow Process .................................................................................................................. 76
Figure 38: Monitoring and Evaluation of the NSSMP ...................................................................................... 80
Figure 39: Process Workflow for Local Budgeting ........................................................................................... 90
Figure 40: National Budget Process Workflow ................................................................................................ 94
Figure 41: Financing Process Workflow .......................................................................................................... 98
Figure 42: PPP Process Workflow................................................................................................................. 103
Figure 43: Approval Process for Competitively-bid Projects ......................................................................... 105
Figure 44: Approval Process for Unsolicited Proposals ................................................................................ 106
Figure 45: Communication Strategy Process Workflow ................................................................................ 111
Figure 46: Media Mix and Complementation Guide ...................................................................................... 115
Figure 47: Label of Brand .............................................................................................................................. 116

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LIST OF TABLES
Table 1: Institutional Partnership Options for Sanitation Project Development ............................................... 25
Table 2: Training Requirements ................................................................................................................... 27
Table 3: Sewerage Options ............................................................................................................................. 39
Table 4: Division 1 Wastewater Treatment Options ................................................................................... 47
Table 5: Divisions 2, 3 and 4 Wastewater Treatment Options ........................................................................ 48
Table 6: Comparison of Wastewater Treatment Technologies ....................................................................... 49
Table 7: Design Flow for Septage Treatment Facility...................................................................................... 50
Table 8: Trucks Required for Septage Management Program ........................................................................ 51
Table 9: Septage Collection and Treatment Costs .......................................................................................... 52
Table 10: Sewage Collection and Treatment Costs ........................................................................................ 53
Table 11 Sewerage Scenaria .......................................................................................................................... 54
Table 12: Septage Management Program Financial Tool ............................................................................... 59
Table 13: Weighted Average Cost of Capital (WACC) .................................................................................... 60
Table 14: Loan Payment Schedule ................................................................................................................. 60
Table 15: Income Statement and Cash Flow .................................................................................................. 60
Table 16: Project Application-Selection Organisation Summary ..................................................................... 65
Table 17: NSSMP targets ................................................................................................................................ 80
Table 18: Performance Monitoring and Evaluation Program .......................................................................... 82
Table 19: Performance Monitoring, Evaluation and Reporting Framework .................................................... 86
Table 20: Performance Monitoring and Evaluation Program .......................................................................... 86
Table 21: Local Budget Process ...................................................................................................................... 89
Table 22: National Budget Process ................................................................................................................. 93
Table 23: Evaluation and approval of projects .............................................................................................. 104
Table 24: Financing schemes ........................................................................................................................ 109
Table 25: KAIPA Analysis of Local Implementers ......................................................................................... 112
Table 26: Current Communication Efforts Related to the NSSMP ................................................................ 112
Table 27: Assessment of Strategic Partners Based on the 5 Cs .................................................................. 113
Table 28: Behavior Change Objectives for Intended Stakeholders .............................................................. 114
Table 29: Message Contents for Local Implementers ................................................................................... 114
Table 30: Menu of Communication Approaches ........................................................................................... 115
Table 31: Tips and Principles for Crafting Key Messages ............................................................................. 116
Table 32: List of Communication Materials ................................................................................................... 117
Table 33: Implementation Tasks ................................................................................................................... 117
Table 34: List of Potential Institutional Partners for Strategy Implementation ............................................... 118
Table 35: List of M&E Indicators for Communication Strategy ...................................................................... 118
Table 36: Guide for Undertaking Stakeholder Analysis ................................................................................. 119
Table 37: Summary Table for the Strategic Communication Design ............................................................ 120

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 Table of Contents

LIST OF ACRONYMS

ABC Approved Budget of Contract

ABR Anaerobic baffled reactor
AIWPS TM Advanced Integrated Wastewater Pond System
BAC Bids and Awards Committee
BAR Budget Accountability Report
BED Budget Execution Documents
BIR Bureau of Internal Revenue
BLGF Bureau of Local Government Finance
BOD Biological oxygen demand
BOT Build-operate-transfer
CAPEX Capital expenditure
CHD Center for Health Development
CHED Commission on Higher Education
CWA Clean Water Act
COA Commission on Audit
COD Chemical oxygen demand
CPDO City Planning and Development Office
DAO DENR Administrative Order
DBM Department of Budget and Management
DBP Development Bank of the Philippines
DepED Department of Education
DENR Department of Environment and Natural Resources
DILG Department of Interior and Local Government
DO Dissolved oxygen
DoF Department of Finance
DoH Department of Health
DPWH Department of Public Works and Highways
DSR Debt service ratio
DTI Department of Trade and Industry
ECA Environmentally Critical Area
ECC Environmental Compliance Certificate
ECP Environmentally Critical Project
EEID Environmental Education and Information Division
EIA Environmental Impact Assessment
EIS Environmental Impact Statement
EMB Environmental Management Bureau
ESC Environmental Sanitation Clearance
ESSO Environmental and Social Services Office
FIES Family Income and Expenditure Survey
FS Feasibility Study
GAA General Appropriations Act
GAB General Appropriations Bill
G-EPS Government Electronic Procurement System
GCC General Conditions of Contract
GFI Government financial institution
GOCC Government Owned and Controlled Corporation
GoP Government of the Philippines
HUC Highly Urbanized City
IAEB Invitation to Apply for Eligibility and to Bid
ICC Investment Coordinating Committee
IEC Information, education and communication
IEE Initial Environmental Examination
IRR Implementing Rules and Regulations
IRR Internal rate of return
ISC Inter-agency Steering Committee
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 List of Acronyms

ITB Instructions to Bidders

JVA Joint venture agreement
KAIPA Knowledge-Approval-Intent-Practice-Advocacy
LCE Local Chief Executive
LCB Lowest Calculated Bid
LCRB Lowest Calculated Responsive Bid
LDWQMC Local Drinking Water Quality Monitoring Committee
LGC Local Government Code
LGU Local Government Unit
LGUGC Local Government Unit Guarantee Corporation
LLDA Laguna Lake Development Authority
LOI Letter of Intent
LSSP Local Sustainable Sanitation Plan
LSSPP Local Sustainable Sanitation Promotion Program
LSSS Local Sustainable Sanitation Strategy
LWUA Local Water Utilities Administration
MC Memorandum Circular
MDFO Municipal Development Funding Office
M&E Monitoring and evaluation
MoA Memorandum of Agreement
MoU Memorandum of Understanding
MWSS Metropolitan Waterworks and Sewerage System
MPDO Municipal Planning and Development Office
NCA Notice of Cash Allocation
NEDA National Economic and Development Authority
NG National Government
NGAS National Government Accounting System
NGO Non-government organization
NTP Notice to Proceed
NPV Net present value
NSSMP National Sewerage and Septage Management Program
NSSP National Sustainable Sanitation Plan
NTP Notice to Proceed
O&M Operation and maintenance
OPEX Operational expenditure
OPIF Organization Performance Indicator Framework
OVI Objectively verifiable indicator
PASS Performance Assessment of Sewerage and Sanitation Services
PAWD Philippine Association of Water Districts
PAWS Performance Assessment of Water Services
PBAC Pre-qualification Bids and Awards Committee
PCAB Philippine Contractors Accreditation Board
PD Presidential Decree
PEMAPS Project Environmental Monitoring and Audit Prioritization Scheme
PhP Philippine peso
PIA Public Information Agency
POM Program Operations Manual
PPMP Project Procurement Management Plan
PPP Public-private partnership
PSSR Philippine Sustainable Sanitation Roadmap
PWRF Philippine Water Revolving Fund
PWWA Philippine Water Works Association
RA Republic Act
SBR Sequencing batch reactor
SCC Special Conditions of Contract
SCRB Single Calculated and Responsive Bid
SEC Securities Exchange Commission
SOW Scope of Work
SSM Sewage and Septage Management

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SSMP Sewerage and Septage Management Program

SuSEA Sustainable Sanitation for East Asia
ToR Terms of Reference
TSS Total suspended solids
TWG Technical Working Group
UASB Up-flow anaerobic sludge blanket
USAID US Agency for International Development
UV Ultra-violet
VGF Viability Gap Fund
WACC Weighted-average cost of capital
WASH Water, sanitation and hygiene
WATSAN Water and sanitation
WD Water District
WSP Water and Sanitation Program
WTF Water Treatment Facility
WWTF Wastewater Treatment Facility
WQMA Water Quality Management Area

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1 Introduction to the Manual

1.1 Current Situation

According to the Water and Sanitation Program (WSP) 1

664 million people lack access to improved sanitation, with
more than 100 million practicing open defecation all
around the world.
The Philippines has invested very little in proper sewage
collection and treatment. More than 20 million Filipinos do
not have access to proper sanitation, and about 7 million
practice open defecation. The WSP Sustainable
Sanitation for East Asia study (SuSEA 2008) reported that
the design of most septic tanks does not conform to the
standards prescribed by the Department of Health (DoH).
Many who have toilets do not have septic tanks; many
septic tanks have open bottoms; most septic tanks are not
regularly desludged; and the septage removed is not
treated and disposed of properly. Less than 10% of the
population has access to piped sewerage systems. Septic
tank management, especially desludging, also requires
improvement. This study revealed that about half of the
respondents with their own septic tanks have not emptied
their facilities in the past five years, if ever.
The effects of this neglect include economic losses
exceeding PhP78 billion per year and 55 deaths per day,
as well as damage to ecosystems and biodiversity.
Constraints to development of sewage collection and
treatment systems include a low level of awareness and
demand from the public, low technical capacity to develop
infrastructure, lack of enforcement of regulations, the
limited resources of water districts and local government
units, and the lack of a national program or budget. Thus,
there is a need for a national approach that addresses
these constraints.
The NSSMP is part of the National Sustainable Sanitation Plan (NSSP) and Philippine Sustainable Sanitation
Roadmap (PSSR), which are broader, overarching frameworks that include the full spectrum of sanitation
challenges such as ending open defecation and treating sewage from markets, agriculture, industry and other point
and non-point sources of water pollutants. While the NSSMP identifies six intervention areas to address all of these
sources, its focus is on the larger infrastructure projects that local implementers (mainly LGUs, water districts and
private service providers/utilities) will develop to collect and treat wastewater from densely populated urban
centres.
Unfortunately, LGUs continue to find it difficult to develop sanitation projects with local resources, given their limited
capacity and competing demands for limited funds. This problem is compounded by an overall lack of enforcement
of environmental laws and low level of awareness of the problem and appropriate solutions by the Philippine public
and government officials.

1
The Water and Sanitation Program (WSP) is a multi-donor partnership administered by the World Bank to support poor people
in obtaining affordable, safe and sustainable access to water and sanitation services. WSP works directly with client
governments at the local and national level in 25 countries through regional offices in Africa, East and South Asia, Latin America
and the Caribbean, and in, Washington D.C. WSP has led or supported many of the advances made within the water and
sanitation sector over the last three decades.

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The Philippine Clean Water Act of 2004 (Republic Act No. 9275) aims to protect the country’s water bodies from
pollution from land-based sources (e.g. industries and commercial establishments, agriculture and community/
household activities). It provides for a comprehensive and integrated strategy to prevent and minimize pollution
through a multi-sectoral and participatory approach involving all the stakeholders.

1.2 National Sewerage and Septage Management Program, NSSMP

The Philippine Clean Water Act (CWA) of 2004 is a landmark piece of legislation that mandates the preparation of
a National Sewerage and Septage Management Program (NSSMP) and requires highly urbanized cities (HUCs)
to provide sewerage and septage services to minimize the adverse impacts of domestic wastewater discharges on
water quality and water resources in general. The NSSMP, as defined in the CWA’s Implementing Rules and
Regulations (IRR), includes the preparation of a framework plan to address various national issues on
sanitation and treatment and disposal of wastewater, focusing on, among others, objectives, strategies, targets,
institutional mechanism, financing mechanism, technology implementation, programming, monitoring and
evaluation and other key national concerns.
The goal of the NSSMP is to improve water quality and protect public health in urban areas of the Philippines by
2020. Its objectives are to enhance the ability of local implementers to build and operate wastewater treatment
systems for urban centers and promote the behavior change and supporting environment needed for systems to be
effective and sustainable. The main strategy is to facilitate a bottom-up, demand-driven project development
process by providing national government support and incentives.
Following the Clean Water Act mandates, the NSSMP targets for areas outside Metro Manila are:

Target 1: By 2020, all LGUs have developed septage management systems and the 17 highly urbanized cities
(HUCs) have developed sewerage systems.
Target 2: By 2020, approximately 43.6 million people have access to septage treatment facilities and about 3.2
million will have access to sewage treatment facilities.
Target 3: By 2020, PhP 26.3 billion has been invested in sanitation improvement projects.
Target 4: By 2020, about 346 million kilograms of BOD is diverted from the environment per year as a result of the
sewerage and septage management projects.

Achievement of these targets is dependent upon the conduct of effective nationwide training, promotions, capacity
building and cost sharing with the national government for sewerage projects.
The CWA assigned the Department of Public Works and Highways (DPWH) to prepare the NSSMP, including the
creation of an Inter-agency Steering Committee (ISC) and its Technical Working Group (TWG). Since 2008, both
the ISC and the TWG have been jointly steered by the National Economic and Development Authority (NEDA) and
DPWH, with active participation of the relevant agencies, namely: the Local Water Utilities Administration (LWUA),
Department of Environment and Natural Resources (DENR), Department of Health (DoH), Metropolitan
Waterworks and Sewerage System (MWSS), Maynilad Water Services Inc. and the Manila Water Co. Inc.
NSSMP implementation will begin with the creation of the NSSMP Office in DPWH and the development of this
Program Operations Manual (POM), which aims to illustrate the necessary processes for project implementation.
The next chapter presents the purpose, objectives and contents of the POM.

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2 Program Operations Manual

2.1 Description

This Program Operations Manual (POM) forms part of the National Sewerage and Septage Management Program
(NSSMP) and its efforts to improve water quality and protect public health in urban areas of the Philippines by
2020.
The Department of Public Works and Highways (DPWH) and the Department of Health (DoH) will lead a
nationwide training and promotions campaign using this Manual and the toolkits contained in the NSSMP Guide for
Local Implementers.
This manual and the toolkits described in it can be found at the NSSMP website: www.nssmp.org

2.2 Objectives and Scope

The purpose of this POM is to provide a guide to the operations of project activities under the NSSMP. It is
intended to serve and assist project proponents, decision makers and facility operators, as well as act as a useful
reference to other stakeholders.
The POM aims to illustrate the entire process for implementing sewerage and septage management projects. It
provides guidance and information on the processes involved in developing projects successfully, and explains the
steps in each process to facilitate smooth implementation.

2.3 Manual Structure and Organisation

The remainder of the manual is divided into six Parts:

 Institutional Framework,
 The Project Cycle and its various processes,
 Budgeting,
 Financing,
 Communication, and

 Annexes with documents, templates and guidelines

A brief explanation of each Part is provided below.

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Part A: Institutional Framework

This Part describes the roles, responsibilities and skill and knowledge requirements of lead, implementing and
support agencies for the NSSMP, and discusses the structure and resourcing of the central NSSMP Office and
Local Project Offices. There are many institutions and agencies involved in NSSMP implementation, which can be
classified according to functions:
Policy: DPWH and NEDA
Implementation Focal Point: NSSMP Office
Project Implementers: LGUs and WDs
Project Facilitators: DoH, DBM, DENR, WQMAs, DILG, LWUA, MWSS, DepEd, LoC, PAWD, PWWA and donor
agencies

Part B: Processes
This Part explains the project cycle and its processes and sub-processes which need to be followed for effective
project implementation. This central Part of the Manual describes these processes and the roles and tasks of
participants in more detail, as they apply to typical sanitation programs and projects. The Part includes information
on: planning steps and guidelines; appropriate sanitation and sewage collection and treatment technologies;
technology selection and prioritization; design processes and tools; guidance on feasibility assessments (technical,
financial, environmental, etc); procedures and documentary requirements for funding applications, procurement,
construction, operation, maintenance, monitoring, evaluation and reporting processes; and anticipated training
needs. Key phases of project cycle are:
Sanitation Planning: This step discusses measures for sanitation improvement in the region.
Sewerage and Septage System Design: During this phase the technologies for achieving the strategic goals are
identified.
Project Feasibility: This phase guides the project viability analysis through the use of several toolkits.
Project Application and Selection: This stage provide guidelines for completing the application form and
selecting the projects which will receive funding support.
Project Procurement: this chapter contains the steps for conducting a tender.
Project Construction: This stage provides guidelines for conducting an efficient construction process.
Project Operation & Maintenance: this phase illustrates a proper O&M planning approach for correct system
functioning.
Project Monitoring & Evaluation: This final process provides guidance on checking project performance, the
accomplishment of NSSMP objectives and O&M effectiveness.

Part C: Budgeting
This Part provides an understanding of local and national budget processes, and explains how the public
expenditure program is prepared. It describes the agencies and processes involved, and provides relevant
supporting information. The budget phases of the project are:
Budget Preparation: This phase involves the formulation of estimates of income and a budget proposal.
Budget Authorization: In this phase the Sanggunian deliberates the legislative approval of the proposal.
Budget Execution: This phase involves the release of funds for the implementation of projects and activities.
Budget Accountability: This involves the accurate recording and reporting of the LGU’s income and expenditures
and evaluation of the LGU’s physical and financial performance.

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Part D: Financing
This Part describes the funds allocation and PPP evaluation processes for the agencies involved and their training
needs. The process consists of the following steps:
Identify financing needs: This involves the determination of the project’s financial feasibility and its financing
requirements, and the preparation of a project brief.
Secure financing: Partnership between the LGU and the WD (and possibly with a private sector investor) is
developed to help meet financing needs. Equity and loan financing for the project are secured by the LGU and the
WD. Subsequently, NG subsidy is requested from DPWH, followed by the release of the NG share to the LGU.
Implement cost recovery mechanisms: During the project’s operational stage, user fees or environmental fees
are collected from households and commercial establishments to achieve full cost recovery over the long term

Part E: Communication
This part presents the roles of the agencies in the communication process, describes the training needs for each
agency, and develops a communication strategy at national and local levels. The communication strategy intended
for the local or HUC level essentially follows the same process as that of the national. But it would differ in terms of
coverage, target stakeholders, behavior change objectives, messages, media and channels, and approaches. The
Communication Strategy contents are:
Stakeholder analysis: Identify the position of stakeholders on the Knowledge-Approval-Intent-Practice-Advocacy
(KAIPA) matrix. Identify current actions for reinforcement.
Strategic Design: Define priority issues, targets and behavior change objectives, and define the message and
approaches.
Development, Production and Pretesting of Communication Materials: Present a positioning message to
reach stakeholders.
Implementation and Management: Coordinate and develop the communication strategy and check results with
the objectives and indicators proposed.

Part F. Supporting documents, guidelines and templates

This Part includes a wide range of materials, including technical guidance and tools; technical, financial and
administrative information; and sample documents, lists, formats and templates, to support the descriptive material
in the foregoing Parts:

Institutional Organisation and Support:

1. Tasks, inputs, outputs and timing for responsible organisations: Annexes provides a detailed description
of the inputs and outputs associated with each of the key tasks under the overall responsibilities of these
organizations, estimates their timeframes in the overall process, and identifies linkages with both the content
of the Manual and other supporting documents.
2. Sample baseline survey form. This sample form is intended to assist project proponents to conduct baseline
surveys as part of the project identification and planning process.
3. Prioritization of sanitation needs: This annex provides a simple but systematic approach to prioritizing
different types of sanitation problems in an LGU, according to need.
4. Guidance on stakeholder and partner consultation: This annex provides some simple guidelines and
principles for planning and conducting consultations with stakeholders, potential partners and local
communities.
5. List of potential stakeholders: This list is designed to assist local authorities to plan and conduct stakeholder
consultation in relation to sanitation planning and specific programs or projects.

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6. Sample Executive Order establishing a TWG: This document is an example of an Order that should be
used for guiding the involvement and mobilisation of experts.
7. Feasibility assessment tasks and documentation. The table in this annex describes the tasks, responsible
agencies, inputs and outputs, and timing of steps in the assessment process, and references relevant
supporting materials
8. List of required documentation, permits and clearances. These are the planning and enabling documents
and regulatory approvals required to implement a sewerage or septage management project
9. Sample resolution for adopting a Local Sustainable Sanitation Plan: This is an exampe of a document
that may be used to define and establish the LSSS.
10. Sample Ordinance for septage management: This is an example of an existing Local Ordinance that
established a septage management system for an LGU.
11. Sample MoU between WD and LGU: The MoU sets out the obligations and responsibilities of both parties of
a partnership (e.g. between an LGU and a private contractor) for financing, developing and operating a
sanitation project
Environmental
12. Philippine Environmental Impact Statement (EIS) System: This annex provides further information on the
EIS process, to supplement the material in the main text of the manual
Application Process
13. Format for Project Concept Note: The Concept Note is a simple description of the project concept and
design that can be used in initial consultations with stakeholders and local communities.
14. Sample letters regarding approval or non-approval of funding applications: These letters would be
issued to prospective project local implementers by DPWH after their applications for National Government
funding have been reviewed and, in the case of a priority project, the relevant funds have been approved.
15. Number of families and family disbursements by income class and by region and type of
disbursements. This table illustrates the capacity of the families to pay for water and sanitation services
Procurement Process
16. Detailed procurement procedures: This annex provides further information on the procurement process, to
supplement the material in the main text of the manual
17. Documentary requirements during procurement: Self-explanatory
18. Sample procurement notice: Self-explanatory
19. Sample letter of acknowledgment of receipt: This can be used or adapted for a variety of documents that
may be submitted during a procurement process.
20. Sample shortlisting notice: Self-explanatory
21. Sample letter to firms not shortlisted: Self-explanatory.
22. Sample letter inviting firms to tender: Self-explanatory.
23. Outline of Terms of Reference: This provides guidance on the structure and contents of the project ToR to
be provided to tenderers.
24. Sample notification letter for supply of works: This would be sent to the selected tenderer/bidder
25. Sample format for negotiation report: This is the report on negotiations with the successful bidder.
26. Sample cover letter requesting submission of signed contract: Self-explanatory.

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Budget and Financing

27. Information on possible finance sources. This annex provides information on public and private financial
institutions that may be able to support the funding of NSSMP projects, including sources offering donor-
funded or commercial forms of finance, and the loan terms and conditions that are offered. The process for
issuing LGU or municipal bonds is also described in this annex.
28. Basic features of Public Private Partnership (PPP) options: The table in this annex compares the main
features, conditions and challenges associated with various PPP options
29. Items for review during evaluation of PPP projects: This annex identifies the main issues and factors that
should be considered in assessing the feasibility of a proposed PPP project, i.e. market, technical,
economic/financial and organization/management aspects, political acceptability and legality, and
environmental/social issues.
2.4 Applicable Laws, Rules and Policies

The NSSMP is reinforced by policy framework. The Government of the Philippines has created an enabling
policy and legislative framework to lead and guide national and local agencies and institutions, the private sector
and the Philippine population towards more effective and sustainable sanitation practices, aimed at achieving
acceptable water quality throughout the country. Relevant regulations for sewerage and septage management
include:
 Code on Sanitation of the Philippines – Septic tanks must be water-tight, inspected once a year, cleaned
when the sludge has reduced the liquid capacity by 50%, and the sludge must be treated/disposed of properly.
It is unlawful to discharge untreated effluent of septic tanks and/or sewage treatment plants to bodies of water
without approval of the Secretary of Health.
 Clean Water Act – The CWA provisions on LGU’s role in maintaining good water quality. By 2020, LGUs are
mandated to have their own septage and sewerage services in place. All industrial, commercial and residential
buildings should be connected to existing sewerage systems in highly urbanized cities (HUCs). For non-HUCs
septage management systems shall be employed. LGUs are required to provide land for treatment facilities.
 Operations Manual on the Rules and Regulations Governing Domestic Sludge and Septage – All
septage haulers and septage treatment entities must secure an Environmental Sanitation Clearance (ESC)
from the Center for Health Development of the DOH. Proper collection, treatment and disposal of the septage
are required.
 Plumbing Code of the Philippines – It is unlawful for any person to deposit into any plumbing fixture
connected to the excreta and storm drainage systems any oils, greases or other things which could cause
damage to the drainage system or public sewer.
 Presidential Decree 198 – A water district may require, construct, operate and furnish facilities and services,
within or without the district, for the collection, treatment and disposal of sewage, waste and storm water. The
water district may require all buildings used by human beings to be connected to the sewer system within such
reasonable time as may be prescribed by the district. Failure to connect can be a ground for the water district
to deny water services to the non-complying building. A water district may prescribe and collect rates and other
charges for sewerage services furnished.
 Local Government Code – Barangays are primarily responsible for general hygiene and sanitation services.
Provinces, municipalities and cities are responsible for building drainage and sewerage infrastructure. LGUs
may impose a special levy on the lands within their jurisdiction specially benefited by public works projects or
improvements funded by the local government unit concerned. However, the special levy shall not exceed 60%
of the actual cost of such projects and improvements.

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3 Part A: Institutional Framework

This chapter describes:
 the roles and key capabilities needed for the lead (DPWH, NEDA), implementing (LGUs, Water Districts), and
support and facilitating agencies (DBM, DoH, DENR, DILG, LWUA and others) for the NSSMP;
 the structure and resourcing of the central NSSMP Office and Local Project Offices; and
 the skill and knowledge requirements of the key implementing agencies.

The following figure depicts the overall institutional structure for NSSMP implementation.

Figure 1: NSSMP Implementation Institutional Structure

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 3 Part A: Institutional Framework

Figure 2 Institutional Development Flowchart

3.1 Roles and Responsibilities

The figure below describes the roles and responsibilities expected to be played by the various lead, oversight,
participating and supporting organizations. The colors used in the figure are the same as in the previous figure on
institutional structure.
A conservative approach has been taken in assigning responsibilities. A role has only been allocated to an
organization if it can realistically be expected to meet the responsibilities and deliver the related outputs.

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Figure 3: Roles of Institutions and Agencies Involved in NSSMP Implementation

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3 Part A: Institutional Framework

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3 Part A: Institutional Framework

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3.2 Lead agency and NSSMP Office

The creation of a NSSMP Office is the first action required to help develop sewerage and septage management
projects. This office will be in charge of overseeing the development, monitoring the progress and evaluating the
performance of individual projects to be implemented in the coming years.
The task of managing and overseeing the implementation of the NSSSMP has been assigned to the DPWH. The
NSSMP Office will therefore also be responsible for overseeing and evaluating the performance of the NSSMP as
a whole.
The resources required to perform these functions are described and quantified below.
Rather than DPWH undertaking all of these roles, there is also the option of entering into a contractual relationship
with one or more third parties to undertake some of the relevant tasks and functions. Resolving this issue
essentially boils down to the level and capability of resources available within DPWH. If it has staff with the
appropriate skills, then it can effectively carry out the task itself. If it does not, or there is a concern that the staff are
not able to devote enough time to the task, the oversight and monitoring roles may be better off being contracted
out to a third party. If such a contracting relationship (i.e. through using external contractors and/or secondees
from DPWH) does take place, however, it will be important to ensure that there is no legal or administrative
problem with the Project Office submitting NSSMP national budget recommendations to DPWH.
The NSSMP management process will comprise a number of activities including:

 Overall project management responsibility, which will involve a number of tasks such as deciding on an
appropriate strategy for implementing the NSSMP, modifying this approach as necessary over time in
accordance with results obtained, monitoring the progress of LGUs and WDs in meeting the objectives set out
for the NSSMP, and briefing the NEDA infrastructure sub-committee (as well as other interested stakeholders)
on progress. This significant task will require an experienced Project Manager.
 Reviewing the project proposals submitted by LGUs and WDs to ascertain their completeness, technical
adequacy, financial impact and sustainability and environmental influence, This will require the skills of at least
one wastewater engineer, one economic/financial specialist and an environmental expert.
 Responding to clarifications and information requests from LGUs and WDs engaged or interested in sanitation
infrastructure development. Dealing with such requests will again require a blend of skills including
engineering, economic, financial and environmental expertise.
 Conducting Program and project monitoring and reporting activities which will require detailed infrastructure
progress examination via on-site visits and remote surveying. The same mix of engineering, economic,
financial and environmental expertise will be required to carry out this task.
 Developing and implementing an ongoing communication strategy and IEC campaign in support of the
NSSMP. This will encompass a number of actions such as promoting the NSSMP to national, regional and
local stakeholders, creating local sanitation information awareness campaigns, disseminating information
concerning project progress, case studies and best practice activities, and liaising closely with partner/ support
institutions (such as the DoH, DENR and DepEd) on IEC activities. This task will require the full-time input of at
least one communications professional.
 Ensuring that the NSSMP implementation process is being carried out in close and effective cooperation with
other, linked endeavors being undertaken by other agencies. For example, the DoH has a responsibility and
interest in assisting LGUs and WDs with septage development planning and implementation. Also, a number of
National Government agencies have mandates and capabilities to meet the training needs of personnel
involved in the Program. These activities need to be communicated to and coordinated with the NSSMP
Project Office team so that the maximum possible positive impacts are delivered. This work will require the
(possibly part-time) involvement of an institutional liaison team member.
 Finally, the NSSMP implementation management process will involve a considerable amount of inter-agency
communications and coordination, as well as other activities such as making logistical arrangements for site
visits and IEC or training activities. This will require a full time administrative capability, such as secretarial
staff (perhaps two persons).

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 3 Part A: Institutional Framework

Figure 4: NSSMP Office Organization Chart

3.3 Local Implementers and Project Offices

The expectation is that LGUs and WDs will work together in developing, implementing and managing sanitation
projects, particularly those that involve a sewerage component and will be eligible for national grant financing
support. This partnership relationship will be underpinned by the signing of a Memorandum of Understanding
(MoU) between the two parties a template for which is included as an Appendix to this Manual.
The MoU will set out the financial, technical, administrative and other responsibilities to be shared between the
parties. Generally speaking, however, whilst both the LGU and WD will be expected to help finance (in cash or in
kind) the proposed development, the responsibilities of the LGU in the partnership will principally relate to providing
the necessary administrative underpinning of the project (e.g. developing ordinances, helping secure permits /
certificates, establishing Working Groups, etc.) whilst the WD will be principally concerned with the technical side of
the implementation process (e.g. producing Feasibility Studies, overseeing project implementation, managing and
operating the assets once they are developed, etc.).
However, whilst a partnership between LGUs and WDs is the most likely and perhaps most logical arrangement,
there are other options available. In summary:

Table 1: Institutional Partnership Options for Sanitation Project Development

Option Summary Summary Assessment
LGU & WD Assuming both parties can raise the necessary finance, this is a highly viable option as each party can
focus on their area of capability – the LGU on administrative matters and the WD on operational matters
LGU The LGU can potentially manage and implement a sanitation project by itself although it will likely need
to contract out the construction and operations activities to a third party
WD It is not practical for a WD to develop a sanitation project by itself because it will need the cooperation of
the relevant LGU(s) for passage of an enabling ordinance
LGU & Private The LGU can feasibly work with one or more private companies in designing, developing and operating
Partner(s) a sanitation project and this may be the best option in circumstances where either the WD is not
interested in acting as a project partner or where the WD does not have sufficient access to financing to
become a project partner
LGU, WD & Private A tripartite agreement can be reached where one or private firms assume responsibility for some part of
Partner(s) the design, development and operations process with the WD left to manage the remaining elements
and the LGU handling the administrative side of things

In addition, whilst Highly Urbanised Cities are expected to represent the principal target for national government
financial support in relation to sewerage development activities, it would potentially be highly advantageous for
neighbouring Water Districts and Local Government Units to associate themselves with such HUCs in order to

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share access to the waste treatment facilities being developed. In return, the HUCs can expect such WDs and
LGUs to contribute towards the capital and/or operating costs associated with such asset development.
More generally, even where NSSMP grant funding is not available, it may often be a sensible course of action for
multiple WDs and/or LGUs to form a consortium in order to co-finance project development and subsequently
share the capacity of the waste treatment collection and treatment assets that have been purchased or
constructed.
WDs and LGUs (individually or in combination) will need to create a Technical Working Group or Local Project
Office with responsibility for sanitation needs and analysis planning, project selection/design and development,
and project management (including monitoring, evaluation and reporting).
The functions of this office would include:
 developing the Local Sustainable Sanitation Strategy (LSSS) and Local Sustainable Sanitation Plan (LSSP);
 developing a local communication strategy and implementing individual IEC project;
 developing sanitation programs in response to local needs;
 prioritizing possible sanitation interventions;
 selecting projects and developing initial concepts/designs;
 arranging project financing and selecting implementation approach (e.g. PPP);
 preparing detailed designs and conducting feasibility studies;
 conducting the necessary tendering and procurement processes;
 managing the construction and operation phases of projects; and,
 monitoring and evaluating the progress, performance and outcomes of projects.

The expectation would be that the Technical Working Group (TWG) established at a local level to manage the
sewerage/septage infrastructure implementation process (as described in further detail in Part B of this Manual)
would also fulfil this Project Office role. An indication of the possible composition of the TWG/Project Office is
presented in the figure below.

Figure 5: Local Project Office Structure

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3.4 Key Skill and Knowledge Requirements

The table below summarizes the skills, knowledge and capabilities required of the staff employed by the key
organizations responsible for NSSMP implementation.

Table 2: Training Requirements

Organization Unit Skills Required

DPWH NSSMP Project Office  wastewater engineering

 water quality monitoring and assessment
 project feasibility assessment
 financial and economic analysis
 operational performance data analysis and reporting
 project management, monitoring, evaluation and reporting
 IEC policy and program design and implementation
 funds management
 budget planning and implementation
 funds disbursement, monitoring and reporting

LGUs Local Project Office  NSSMP Implementation processes and documentation

Municipal Planning & Development  wastewater engineering
Office  water quality monitoring and assessment
Local Health Office  health policy and links to sanitation
 sanitation and wastewater infrastructure planning
 project feasibility assessment
 financial and economic analysis
 operational performance data analysis and reporting
 project management
 construction supervision
 project monitoring, evaluation and reporting
 IEC policy and IEC program design and implementation
 budget planning and implementation
 drafting of contracts and MoUs

WDs All  wastewater engineering

 water quality monitoring and assessment
 health policy and links to sanitation
 sanitation and wastewater infrastructure planning
 project feasibility assessment
 financial and economic analysis
 project management
 construction supervision
 project monitoring, evaluation and reporting
 IEC policy and IEC program design and implementation
 budget planning and implementation
 drafting of contracts and MoUs

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4 Part B: Project Cycle

4.1 Overall process

The project cycle includes the key steps and phases of a project's development and implementation, e.g. from the
initial planning stages to project monitoring and evaluation, or from calling for funding applications to the
commissioning and operation of projects.
The project cycle is divided into eight steps, as illustrated below. Each of these steps has its own processes and
participants. This chapter of the Manual describes these processes in more detail, as they apply to typical
sanitation programs and projects.

Figure 6: The Project Cycle

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 Part C: Budgeting

4.2 Sanitation Planning

The first task of the LGU Project Office is to review the Local
Sustainable Sanitation Plan (LSSP). In the event that there is no
LSSP, the LGU should take the lead in developing a Local
Sustainable Sanitation Strategy (LSSS) assisted by the Project
Office. The DoH has produced a Guidebook that clearly explains
how to develop a LSSS and LSSP. The LSSP states the LGU
sanitation vision, mission and goals, and contains: (i) core
principles adopted for the planning process, (ii) a brief description
of the water and sanitation status of the community, (iii) sanitation
problems and issues and their potential impacts and importance,
(iv) current programs and actions addressing those problems and
issues, and (v) the local sustainable sanitation strategy.
Once there is a LSSP, the LGU should develop a Local
Sustainable Sanitation Promotion Program (LSSPP). The
LSSPP is the roadmap for the development of the promotion
strategy and program. It contains guidelines for the development of strategies and activities that will convince
people to change mindsets and behaviors regarding key sanitation issues. These guidelines provide knowledge for
information, education and communication (IEC) programs and targeting local communities.
4.2.1 Process workflow and description
Figure 7: Sanitation Planning Workflow Chart

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Baseline Study
Planning staff of the Local Project Office should review the LSSP and, together with LGU technical staff, identify
possible projects. This involves the review of baseline data collected during the preparation of the LSSP. Special
attention should be given to overall objectives, priorities and implementation strategies.
Reviewing existing sanitation conditions
In this phase the LGU will identify its current programs, if any, on sustainable sanitation.
Determining target site & defining needs
In this step the LGU will define study coverage and sampling method and will check the availability of sources to
conduct the baseline study.
Identifying partners & defining roles
In this stage the LGU will identify possible partners for conducting the baseline study and define the responsibilities
of each team member.
Developing the LGU’s baseline study plan
Once the necessary human resources are assigned the baseline study plan is developed. LGU will define specific
strategies to cover the human and financial requirements. Annexes provide an example of a baseline survey form.
Conducting the actual baseline study
LGU will then implement the baseline study
Reporting the results of the baseline study
Results will be presented in a report for future consultation and as a basic input to future monitoring and evaluation
processes.

Local Sustainable Sanitation Strategy

Stakeholders should be involved early in the planning process to convert them into development partners that will
actively support and help implement the sanitation plan. Stakeholders’ workshop should be organized and held,
where issues can be presented and outputs developed, including program goals and objectives and a consensus
on priority issues and next steps.
Organize the Local Sustainable Sanitation Strategy team and conduct a consultative dialogue
The first step is to identify the members of the LSSS team who will be in charge of drafting the plan and ensuring
its successful implementation. The Technical Working Group (TWG) should be formed to take the lead in
implementing the next steps agreed at the stakeholders' workshop(s). The TWG will further define objectives and
timeframes, review alternative approaches, and evaluate and recommend preferred alternatives for program
implementation. Sub-groups can be formed to develop the necessary ordinance and the promotional campaigns to
support the program.
Craft the vision and mission for local sustainable sanitation
Based on the results of the Baseline Study, the LSSS team will identify a list of various health and sanitation issues
affecting the community. This will allow the formulation of the vision and mission.
Identify goals and objectives
After an analysis of the current situation and based on awareness of the need to improve sanitation conditions, the
LSSS team will define the goals and objectives. Goals are the “what” and represent long-term results. Objectives
are the more immediate responses to sanitation issues.
Formulate strategies and map out activities
Strategies are general approaches to reach objectives. Activities are specific tasks that follow or give effect to
those strategies.

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For planning purposes, septage treatment programs are typically developed prior to the implementation of
sewerage systems, as properly functioning septic tanks can help ensure the long term sustainability of downstream
sewerage works. Planners should consider the following guidelines for the timing of septage management and
sewerage projects:
 Septage projects should be developed before sewerage projects, generally between years 1 and 3 of the
sanitation planning cycle.
 Sewerage projects should be developed between years 4 and 10 in the planning cycle, or once septage
programs are in place.
 For sewerage projects, interceptor systems may be built first, followed later by piped sewage collection
systems.
Integrate sanitation information into the components of the LSSP
Once the LSSS team has identified concrete actions to achieve objectives they will integrate data and information
into the Local Sustainable Sanitation Plan.
The Local Project Office should decide which projects will be further elaborated and developed. The prioritization
tool used by DPWH for project selection, together with specific criteria, will be the basis for project selection at this
stage.
Endorse the LSSP
Finally, LSSS team will elaborate a report and communicate it for adoption and approval.

Local Sustainable Sanitation Promotion Program

Walking through the existing sanitation program & national mandate
This first step consists of reviewing the Baseline Study, the Local Sustainable Sanitation Strategy and the Local
Sustainable Sanitation Plan to understand definitions, goals,objectives, processes, etc. This step also allows the
LGU to situate community issues inside the National Plan.
Determining key sanitation issues
This phase consists of identifying community issues and concerns, and ensuring that they are addressed by the
LSSPP. Annexes contain a check list for prioritizing sanitation needs.
Developing a local sustainable sanitation promotion plan
This step is the main one in this process. It consists of elaborating the promotion plan in the following areas:
identify behavior change objective, determine target, identify channels, develop activities, assign financial and
human resources, detail a work plan and specify monitoring and evaluation parameters.
Drawing up the resource requirements and options for financing
The LGU will analyse the detailed budget and plan on how to get the resources needed to implement the plan.
Developing & testing of IEC materials
LGU will develop materials such as posters, flyers, radio and TV plugs, and will test them with different audiences.
Implementation of sanitation promotion plan
LGU will conduct the promotion plan, taking into account the results of testing.
Monitoring & evaluating impact
Regular monitoring and evaluation will take place in order to analyse the effectiveness of the plan. LGU will take
measures in the event that the plan does not reach objectives

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4.2.2 Supporting documentation

The steps described above can be easily follow with the Guidebooks issued by DoH under “The Philippine
Sustainable Sanitation Knowledge Series”. This compilation of manuals describe the processes related with the
Local Sustainable Sanitation Plan. The series of Guidebooks are:
 Guidebook for a Sustainable Sanitation Baseline Study
 Guidebook for a Local Sustainable Sanitation Strategy
 Guidebook for a Local Sustainable Sanitation Promotion Program
 Guidebook for Community-Led Total Sanitation
 Guidebook for a Zero Open Defecation Program
 Guidebook for Onsite Sanitation Technologies
 Guidebook for Designating a Water Quality Management Area
 Guidebook for Marketing a Septage Treatment Facility
 Guidebook for Monitoring and Evaluation
 Septage Management Program: The General Santos City Experience
 The SuSEA LGU Experience: Dagupan, Guiuan, Polomolok, General Santos City, Alabel, Bauko
 Guidebook for a Disease Prevention and Control Program for Soil-transmitted Helminth Infections and
Diarrheal Diseases
 Guidebook on Water Supply Protection Program
 Water Pollution Prevention and Control Program: The Polomolok Experience

4.2.3 Training requirements

Organization Unit Knowledge and Skills Required

DPWH NSSMP Project Office  the water cycle
 wastewater engineering
 health links to sanitation
 sanitation and wastewater infrastructure planning
 IEC policy and IEC program design and implementation
LGUs Project Office  the water cycle
MPDO  wastewater engineering
 health links to sanitation
Local Health Office
 sanitation and wastewater infrastructure planning
 IEC policy and IEC program design and implementation

WD All  the water cycle

 wastewater engineering
 health links to sanitation
 sanitation and wastewater infrastructure planning
 IEC policy and IEC program design and implementation

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4.3 Sewerage and Septage System Design

The next step is to develop a Sewerage and Septage

Management Program (SSMP). This is a deeper
development of the LSSP. It requires specifically defined
projects. Following the LSSP, an overall Sewerage and
Septage Design will be developed by initiatives described
on subchapter 3.3 LGU & WD, LGU alone, WD alone,
LGU & Private Partner(s) or LGU, WD & Private Partner(s)
The Sewerage and Septage Design, will be assessed by
the Project Office for feasibility (technical and financial),
which will be the basis for future project implementation.
The NSSMP provides tools and other documentation to
assist local implementers to develop their SSMP. These
tools are described in this manual and can be accessed
through the NSSMP website.
During this phase, TWG/Project Offices shall identify
suitable sanitation projects for possible future implementation.
This stage is divided in two main stages:
 Selection of Technology. In this stage the implementer chooses between Septage and Sewerage and
decides which Treatment Plant is more appropriate for implementation.
 Dimension of the project. In this stage the implementer establishes the capacity of the treatment plant
The next figure illustrates the process. It must be read from left to right and from top to bottom.

Figure 8: Sewerage and System Design Process

Selection of Technology Dimension

Selection of
Interventions conveyance Population Selection of Treatment Plant
technology

Septage Design Toolkit

Pump
Decision Tree for Septage
Septage Trucks Any Number
Treatment Septage Cost
Suppliers of Trucks
design flow estimation
needed

More than
Decision Tree for Wastewater
200,000 Sewerage Design Toolkit
Decision Treatment System
people
Tree for
Sewerage
Sewerage
Decision Tree for Wastewater People in CAPEX
System Less than
Treatment System for small and the and Financing
200,000
medium systems program OPEX

For the “Selection of Technology” the process will be selection of interventions, selection of technology and
selection of treatment plant. These steps are briefly described below and illustrated in following subchapters.

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Selection of interventions. This first step defines the range of the project. Hence, it will establish all of the kinds
of intervention that are required. This will be done with:
 The Decision Tree for Technology Intervention. This assists in selecting generic technology at each level:
toilets, treatment/storage, conveyance method (septage/sewage), treatment technology and sludge
reuse/disposal.
Selection of Conveyance Technology. In this step, the implementer will choose the appropriate technology for
collecting effluents. In the case of septage this is done by trucks. In the case of sewerage projects four alternatives
are indicated.
 Sewerage Technology Selection Decision Tree. This tool will assist in decision making to choose the form of
sewerage intervention from: sanitary sewers, combined sewers, small diameter effluent sewers or condominial
sewers.
Selection of Treatment Plant. Once the implementer has identified the technology for collecting the effluents, it is
time to select the appropriate treatment plant. There are two decision trees to assist in this step, one for septage
and the other for sewerage.
 Decision Tree for Septage Treatment. This decision tree assists in considering several factors for selecting
the most appropriate treatment plant.
 Decision Tree for Waste Water Treatment System. This decision tree acts in the same way.
The dimensioning of the project is done with the toolkits. These are two excels available at the NSSMP website.
 Septage management toolkit. This tool allows estimation of septage design flow, number of trucks needed
and overall service costs.
 Interactive
This sewerage
interactive toolkit istoolkit
designed to help local implementers better understand the costs and resources
required to develop sewerage infrastructure projects.

4.3.1 Technology interventions

Analysing the Local Sustainable Sanitation Plan should enable easy identification of the sanitation requirements of
the municipality.
Technologies for sanitation improvement are generally organized into five groups:
 toilets;
 collection and storage for local treatment - on-site systems for storing and initial processing of sewage, usually
settling and decomposition or bio-degradation;
 conveyance of wastes - moving sewage or septage from the point of generation to the point of treatment;
 off-site treatment - products and systems used to treat accumulated sewage or septage, either with a
centralized or decentralized approach; and
 effluent reuse and disposal - final disposition of the treated effluent and process by products.
The NSSMP focuses on septage and sewerage project and only provides funds for sewerage projects. However, a
sanitation project or intervention needs to consider the whole process and integrate all slabs of the wastewater
chain, ensuring that it provides appropriate solutions for on-site collection for all of the population.
The next figure is provided to assist the identification of technology interventions.

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Figure 9: Decision Tree for Technology Interventions

Project Concept Development:
Ask the following questions to select
technology
Choose toilets From Group 1:
Dry Toilet
Is provision of toilets Urine Diverting Dry Toilet
required for this Urinal
project? Pour Flush Toilet Preferred toilet alterati ve:
Cistern Flush Toilet
Urine Diversion Flush Toilet

Choose a local storage or

treatment component:
Storage tank
Single Pit
Is local storage or Single Ventilated Improved Pit
treatment at the Double Ventilated Pit
house or building a Twin Pits for Pour Flush
component of the Dehydration Vaults
project? Composting Vault
Septic Tank Preferred local storag e or
Anaerobic Baffled Reactor treatment component:
Anaerobic Filter
Biogas digester

Choose conveyance method:

Jerry can
Is a conveyance
Human Powered Emptying and Transport
method required to
Motorized emptying and Transport
move wastewater Simplified Sewers
from point of
Solids Free Sewer Preferred conveyance
generation to point of
Conventional Gravity Sewer method:
treatment?
Transfer Station
Sewer Discharge Station

Choose a treatment technology:

Anaerobic Baffled Reactor
Anaerobic Filter
Waste Stabilization Ponds
Aerated Pond
Free water surface constructed wetlands
Is a treatment system Horizontal flow subsurface constructed wetlands
a component of the Vertical flow subsurface constructed wetlands
project? Trickling filter
Up-flow anaerobic sludge blanket reactor
Sedimentation thickening ponds
Unplanted drying beds Preferred treatment
Planted drying beds method:
Co-composting Biogas
systems

Choose a reuse or disposal technology:

Fill and Cover – Arborloo
Application of urine
Application of dehydrated feces
Application of compost
Biogas for energy
Is reuse or disposal a
Irrigation
component of the
Soak pit
project?
Leach field
Aquaculture pond
Floating plant pond
Groundwater recharge Preferred reuse or dis posal
Land disposal method:
Surface disposal

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4.3.2 Sewer systems

This subchapter illustrates the sewer system. This information will be used in case sewer system is required on the
project but it is highly recommended to have an overview of the whole sanitation system.
Sewer systems consist of the underground sewer pipes and pumps that transport sewage or effluent from the
point of origin to a treatment or disposal site. There are four types of sewer systems:
 Sanitary sewers use sewer pipes to connect the waste discharge from homes directly to a sewer network,
while excluding storm water. There are several places in the Philippines with sanitary sewers such as parts of
Zamboanga, Baguio, Makati and Quezon City. Sanitary sewers do not rely on septic tanks as direct
connections are required. Commercial pre-treatment programs that remove grease, lint and other undesirable
materials that can clog pipes must be removed to keep sewers operating properly.
Sanitary sewers are most applicable for newly planned dense urban settings, new subdivisions or commercial
estates, as the pipelines may be installed along with other infrastructure such as roads and utility rights of way.
Many existing communities in the Philippines are unwilling to install sanitary sewers as they are very expensive
and require excavation of roadways, which is disruptive to commerce and increases traffic problems. Instead,
existing urban areas tend to opt for combined sewer systems that can utilize existing drainage channels.

Figure 10: Example of sanitary sewers

 Combined sewer systems rely on septic tanks or common ABR systems for primary treatment and then the
effluent is discharged to existing subsurface or open channel storm drains. Storm drains are connected with
larger interceptor sewers which are equipped with combined storm water overflows for peak rain periods. The
interceptor pipelines collect the dry weather flows and convey the combined wastewater to treatment plants.

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 Part C: Budgeting

Figure 11: Example of combined sewer

 Small diameter effluent sewers collect septic tank effluent and convey it to larger sewer mains which
eventually lead to treatment systems. These may be variable grade, or include effluent pumping stations as
needed to overcome gravity.

Figure 12: Example of small diameter effluent sewers

 Condominial sewers incorporate shared branches that connect groups of homes to sewer mains at strategic
locations. Condominial branches are often installed and owned by the homeowners and locally maintained in
exchange for reductions in sewerage fees. Local ownership helps achieve sustainability.

Figure 13: Example of condominial sewers

For the design and dimensioning of sewerage systems, population size is the main factor, more options are
available where the population is lower.

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 NSSMP Operations Manual

The following Decision Tree will assist local implementers to select the most suitable sewerage technology.

Figure 14: Decision Tree for Sewerage Technology Selection

Yes Lots are large and soils are suitable for on-site
disposal

No

Yes
New community planned with dense urban core

No

Yes Existing community with highly dense urban

core – septic tanks and drainage in place

No

No
Existing community with of moderate density New community planned with low to moderate
with improper septic tanks and drainage density-soils inadequate for on- site

Yes

Consider
Combined condominial
On-site Treatment Condominial
Sanitary Sewer sewerage with sewerage, settled
and disposal Sewerage
interceptor small diameter
sewers

The cost of sewer installations can often be more expensive than the wastewater treatment systems. Community
planners should investigate decentralized sewer systems as well as centralized options. Placing smaller
wastewater treatment systems in individual communities may reduce overall sewage collection costs, while making
the treated wastewater more available for reuse near the point of generation. Additionally, there are many
innovations in sewer line technology, from trenchless technology to new pipe materials. Consultants and engineers
should be well versed in proper sewer line design and construction techniques, especially for larger projects.

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 Part C: Budgeting

Table 3: Sewerage Options

Sewer Type From the House At the Street Sewer Network

For any population

Septic effluent mixes with

Individual or cluster septic tanks Subsurface storm drains or
Combined sewer stormwater, then to combined
or ABRs open canals
overflow and treatment

House connection through Pipes with manholes for Sewage flows through pipes and
Sanitary sewer
building sewer maintenance lift stations to treatment plant

For populations of less than 200,000 people

Small diameter pipes with Centralized or decentralized

Small diameter sewers Septic tank or common ABR
cleanouts treatment systems

House connection through Branches connect to sewer Centralized or decentralized

Condominial sewers
building sewer mains in the streets treatment systems

4.3.3 Treatment technology selection

The Decision Tree for Technology Selection will guide the local implementer in selecting the most appropriate
technologies for the region. It asks question about the site where each technology will be implemented. The goal of
site evaluation is to identify all of the constraints of a particular site as a preliminary step to designing the
wastewater system, as well as fully understanding the nature of the site. The nature of the site will have a strong
bearing on the type of wastewater system chosen for a particular project.
Site-related aspects to be considered when selecting the best technology are:
 availability of electricity
 topography or slope
 proximity to surface waters and flood plains
 depth of soils and bedrock
 location of underground utilities
 access roads to the site (ingress and egress)
 surrounding land uses.
An understanding of surrounding land uses and long-term development plans is part of the site evaluation process
and could have major impacts on wastewater decisions. For example, if the proposed site is in the middle of a
densely populated residential area, certain technologies might be excluded from consideration, such as sewage
lagoons that take up a lot of space and may produce nuisance impacts.
By using the Decision Tree, local implementers will have to answer questions regarding area characteristics to
arrive at the technologies available, depending on terrain and population characteristics. The final selection will
be based on team expertise and judgment. In order to help the decision-making process, Annex B of the NSSMP
final report provides a description of advantages and disadvantages of technologies. This is also available at the
NSSMP website.
This manual first describes the septage treatment technology options and then the wastewater treatment
technology options.

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The following decision tree is intended to assist in the selection of technology for septage treatment. In addition, a
description of the different technologies presented by the NSSMP is provided.

Figure 15: Decision Tree for Septage Treatment

Medium Size of site Medium

Large

No Far from No
population

Yes

No
Site is flat

Yes

Electicity is No
not available
to site

Yes

No groundwater
or bedrock within No
2 meters of
ground

Yes

Sewage Lagoon, lime

Use mechanical Mechanical conditioning
Stabilization, constructed
conditioning with with Activated sludge or
wetlands with sand drying
stabilization ponds SBR
beds, composting

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 Part C: Budgeting

4.3.4 Septage treatment technologies

The NSSMP discussed four examples of configurations for septage treatment that have been successfully
implemented, or are in the planning stages, in the Philippines:

Figure 16: Example of anaerobic digestion in treatment lagoons

 Anaerobic digestion in treatment lagoons. Anaerobic
lagoon cells provide a minimum of 15 days of storage for
proper treatment. These are typically configured in series,
with facultative and aerobic ponds to treat to meet
discharge standards. Example: Alabel septage treatment
facility.

Figure 17: Example of anaerobic digestion in treatment lagoons

 Chemical conditioning and dewatering with lagoon or activated sludge treatment. Generally, this
includes mixing septage with a polymer to chemically condition the septage, and then dewatering the mixture
using screw or belt presses. The remaining effluent is treated with lagoons or activated sludge systems.
Examples: Dagat-Dagatan Septage Plant (Maynilad Water) and South Septage Treatment Plant (Manila Water
Company).

Figure 18: Example of Chemical conditioning and dewatering with activated sludge treatment

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 Chemical stabilization with hydrated lime and effluent

treatment with lagoons, sand filters or treatment wetlands.
Example: San Fernando, La Union Septage Pilot Study.

Figure 19: Example of Chemical stabilization with hydrated lime and effluent treatment

 Anaerobic digestion and composting with municipal solid waste. Anaerobic digestion is a series of
processes in which microorganisms break down biodegradable material in the absence of oxygen. Example:
Bayawan City.

Figure 20: Example of Anaerobic digestion

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4.3.5 Wastewater treatment technologies

Once the wastewater is collected through the sewer system and transported to the Wastewater Treatment Plant, it
should be treated with the appropriate technology regarding several factors.
This sub-section first presents a description of infrastructure elements providing an overview of the system. Then,
there is a decision tree similar to the previous ones. Finally, there is a description of the technologies available.
There are two main categories for the technologies referring to the population of the municipality, the main factor
which indicates the capacity required for the treatment plant.
A wastewater treatment infrastructure system is usually composed of the following elements:
 Headworks. This is a primary treatment that will remove the majority of the suspended solids that are
present. The equipment that receives the incoming wastewater includes:
o bar screens to remove large solids such as rags and sticks
o grit chambers to remove sand and debris that could harm pumps
o flow measuring meters.
 Primary settling. Some treatment systems use primary settling basins to remove settleable solids. These
are the large and heavy solids that can be removed very quickly.
Wastewater treatment plants will use either rectangular or circular primary clarifiers. Every clarifier can be divided
into five zones.
The Influent Zone is the inlet to the clarifier. Water enters the end of a rectangular tank, or the center of a circular
or square tank. The influent zone is equipped with a baffle. Circular tanks will have a collar-type circular baffle that
directs the water down as it enters the center of the tank. Rectangular tanks will have a perforated wall that
spreads the water laterally across the inlet end of the tank. The purpose of the baffle is to prevent short-circuiting.
Short-circuiting reduces the detention time in parts of the tank causing solids to carry over into the secondary
process, resulting in uneven sludge distribution.
The following pictures illustrates rectangular and circular clarifiers.

Figure 21: Example of rectangular and circular clarifiers

The Settling Zone represents the largest portion of the tank. The water velocity is reduced to 0.03-0.05 ft/sec and
the detention time should be about 2 hours. The problem is that the flow rises and falls during a 24-hour period. As
the flow increases the detention time decreases. Slowing the water down for this long allows the sludge to settle to
the bottom while the water is removed from the top of the tank. Clarifiers are usually only about 8-12 feet deep and
have a surface loading rate of about 800-1400 gpd/sq ft. This keeps the upward velocity of the water low enough to
minimize solids carryover.
The Skimming Zone is at the surface of the tank. Solids and greases that have a specific gravity of less than 1.0
will float to the surface of the clarifier. A skimmer arm is attached to the rake assembly. It skims the surface as the
rake rotates. In a rectangular tank the sludge rakes act as skimmers when the chain brings them to the surface.
Floating scum is deposited in a grease or scum trough. This grease and scum must be properly landfilled to
prevent odor problems.

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The Effluent Zone is the part of the tank where the settled water leaves to go to secondary treatment processes. In
rectangular tanks the water leaves at the end opposite the influent. In circular or square tanks the water leaves at
the edge of the tank. A channel called the effluent launder collects the effluent flow and directs it to the effluent
piping. Weirs are installed along the edge of the effluent launder channel to skim the water evenly off the surface of
the tank. The most common type of effluent weir is a V-notch (or saw-tooth) weir. A V-notch weir is a plate that has
notches, about 2-3 inches deep, cut in it every 6-8 inches. If the weir is clean and level, it will remove water evenly
all the way around the edge of the tank. This minimizes the upward velocities near the effluent launder and
improves removal efficiencies. If the weir plate is not level or part of the weir becomes clogged with slime or debris,
short-circuiting will result because more water will pass over the low side or the clean notches of the weir. Short-
circuiting will cause poor settling and uneven sludge blanket buildup. A baffle plate, a ring 6-8 inches inside the
weir, is installed to prevent floating solids from going over the weir.
The design criterion for weirs is the weir overflow rate. The weir overflow rate determines how many gallons can
pass over each foot of weir each day. The standard weir overflow rate is between 20,000-25,000 gpd/ft.
The Sludge Zone is the bottom of the tank where the settled sludge collects and compacts. The sludge blanket
depth should be measured and sludge should be removed at least every shift. Sludge rakes push the sludge to one
end or the center of the tank so that it can be pumped out. The rake drive is usually equipped with a torque
indicator. The torque indicator resembles the indicator on a torque wrench. A needle moves across a graduated
scale that indicates how much force is needed to move the rake through the sludge. If too much torque is applied, a
shear pin in the drive shaft will break to prevent damage to the gearbox or drive shaft. A fluctuating torque reading
indicates uneven sludge buildup in the sludge zone. Short-circuiting in the unit causes this uneven distribution of
sludge.
Failure to remove sludge often enough will result in anaerobic conditions and gas buildup in the sludge. The sludge
can become septic, releasing gas bubbles, and float to the top where it can be difficult to remove. It can also result
in increased odor problems.
 Secondary treatment. This a biological form of treatment in which microbes contact wastewater and consume
the organic material.
 Secondary settling. Some treatment systems use secondary settling to remove any remaining solids after
secondary treatment.
 Disinfection. Either chemical disinfection (chlorine), physical disinfection (ozone), radiological disinfection (UV
light) or natural disinfection (sunlight and detention time) may be used.
 Sludge drying beds. Often sand beds are used to dry biosolids so they may be easily transported for reuse
(fertilizer) or disposal (landfilling).
Local implementers need to select an appropriate wastewater treatment system. The design will be based on
present and future (expected) demand of sanitation services and on the technical condition and capacilities of the
LGU. A major factor in determining the suitability of infrastructure is the population. Some technologies are not able
to treat wastewater in high amounts. Other key factors are the availability of land, the land itself, and the presence
of bedrock or groundwater.
The NSSMP divides the consideration of treatment facilities into two categories:
 Division 1: with populations of more than 200,000
 Divisions 2, 3 and 4: with populations of less than 200,000.
The decision tree below is designed to assist decision making. A description and picture of each technology
(following the decision tree table) provide an overview of the relevant equipment.

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 Part C: Budgeting

Figure 22: Decision Tree for Wastewater Treatment System

Large tract of flat land

Yes No
available

Bedrock or < 3m Small

groundwater present Tract of land is
>8 meters Medium

Groundwater or
Yes
bedrock < 3m

>3 m but < 8 m

Population Population Population

> 200,000 <200,000 > 200,000 <200,000 > 200,000 <200,000

-Activated -UASB and

-AIWPS ™ -AIWPS ™ -Facultative -Activated -UASB and
sludge lagoon
-Lagoon -Lagoon -Aerated lagoon sludge lagoon
-SBR -wetlands
-On-site cells -SBR -wetlands
-RBC -oxidation ditch

Wastewater Treatment for Division 1

Figure 23: Example of Sewage Lagoon Systems

Sewage Lagoon Systems. This approach may
be used for large flows, provided there is ample
open space and soils and groundwater aquifers
are deep. If soils are at least nine meters deep,
and there is no groundwater or bedrock, consider
using the Advanced Integrated Wastewater Pond
System (AIWPS™ system). This utilizes a deep
fermentation pit, sized to reduce the volume of
sludge through the process of fermentation at the
rate of accumulation. Therefore, no sludge or
biosolids processing is required.

Figure 24: Example of Activated Sludge treatment

Activated Sludge. There are more activated
sludge plants for municipal wastewater treatment
than any other type of mechanized treatment
system. Municipal planners may use these
systems when space is limited, but electrical
power is available and reliable. Activated sludge
plants are maintenance intensive, requiring highly
skilled operators, an on-site laboratory and some
sophistication in instrumentation.

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Figure 25: Example of Sequencing Batch Reactor (SBR)

The Sequencing Batch Reactor (SBR). The
SBR approach uses a process similar to the
activated sludge plant, but is based on a batch
process rather than flow-through technology.
The SBR utilizes one tank to perform the major
treatment activities of filling, reacting, settling
and decanting, as opposed to multiple tanks
with the activated sludge system. Therefore, this
may be a less expensive option. SBRs also
have some benefits related to operational
expenses. They are more energy efficient than
activated sludge plants as blowers are required
for only about 5 hours a day. Like activated
sludge plants, SBR plants still require large
capital expenditures and reliable sources of
electricity, but smaller land areas.

Figure 26: Example of Anaerobic/aerobic System

Anaerobic/Aerobic Systems. These

require more land than an activated
sludge or SBR plant, but not as much as
sewage lagoons. Anaerobic systems like
the upflow anaerobic sludge blanket offer
the advantage of being passive systems
that do not require energy to operate.
They are very efficient at reducing
biochemical oxygen demand (BOD) and
total suspended solids (TSS), e.g. by up
to 70%. In an anaerobic/aerobic type of
system, the effluent from the first stage
(the USB anaerobic filter) flows to
secondary treatment that could include
aerobic or aerated lagoon cells.

The following table presents a summary of each technology discussed. This is useful for knowing the equipment
needed for each technology.

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Table 4: Division 1 Wastewater Treatment Options

Treatment Technology Headworks Treatment Disinfection & Biosolids

Grit Flow Facultative Maturation Sand
Sewage Lagoons Bar Screen Chlorine disinfection
Chamber meter lagoon cells lagoon cells filtration
Aerated
Comminuter Ozone disinfection
lagoon cells
AIWPS ™
Lagoon UV disinfection
cells
Secondary
Grit Flow Primary Secondary
Activated Sludge Bar Screen biological Chlorine disinfection
Chamber meter settling settling
treatment
Comminuter Ozone disinfection

UV disinfection
SBR
Sequencing Batch Grit Flow
Bar Screen Process Chlorine disinfection
Reactor Chamber meter
tanks
Comminuter Ozone disinfection

UV disinfection
Grit Flow
Anaerobic/aerobic Bar Screen UASB SBR Chlorine disinfection
Chamber meter
Comminuter Ozone disinfection

UV disinfection

Wastewater Treatment for Divisions 2, 3 and 4

The lower population will allow three more wastewater treatment systems/approaches to be considered in the
technology selection process.

F
igure 27: Example of Oxidation Ditch
Oxidation Ditch. This is a process where screened and
degritted raw sewage is mechanically aerated. It uses a
ring or oval-shaped ditch or tank where aerators impart
oxygen to the wastewater. Oxidation ditches are efficient
and relatively easy to maintain compared to other
aerated systems like activated sludge or the SBR. These
systems do utilize mechanical equipment such as
blowers, aerators, pumps and controllers, so skilled
operators are required.

Figure 28: Example of Rotating Biological

Contactors
Rotating Biological Contactors. This is a series of
closely spaced circular disks of polystyrene or other plastic
material that is submerged in wastewater. The disks slowly
rotate and the action of submerging and re-emerging the
media helps to grow a film of microorganisms on the
plastic media. These microorganisms play a major role in
the reduction of the organic matter in the wastewater.

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Figure 29: Example of On-Site Systems for Point Sources

On-Site Systems for Point Sources. Point
sources may include hospitals, slaughterhouses,
public markets, schools, houses, hotels and
resorts. In rural areas, or where lots are large
and well-spaced, on-site treatment, disposal and
reuse technologies may be a preferred option for
individual houses. On-site treatment systems
include the treatment component, typically septic
tanks or anaerobic baffled reactors, and soil-
based disposal devices such as leach trenches
and mound systems. Soils should be relatively
free of hard rock, clay and groundwater for
effective on-site systems. In some areas it may
be beneficial to use on-site treatment devices,
and send treated effluent off-site for reuse,
recycling or disposal.

Table 5: Divisions 2, 3 and 4 Wastewater Treatment Options

Treatment Biosolids Management &
Headworks Treatment
Technology Disinfection
Grit Oxidation Chlorine
Oxidation ditch Bar Screen Flow meter Secondary clarifier Sludge drying
Chamber raceway disinfection
Comminuter
Rotating
Grit Chlorine
Biological Bar Screen Flow meter Primary settling Contact Chamber Sludge drying
Contactor Chamber disinfection

Comminuter
Chlorine
On-site Septic tank Leach field Reuse
disinfection
ABR Mound

Wetlands

Local implementers will need to review the factors that affect decision making, such as:
 land area required;
 electricity supply;
 relative cost of installation;
 relative ease of operation; and
 relative cost of operation.
The next table presents relevant technology factors for decision-making. The awareness of local implementers
regarding the conditions of the community will assist to select the proper technology.

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Table 6: Comparison of Wastewater Treatment Technologies

Relative Relative Relative
Land Area
Wastewater Treatment Technology Electricity Cost of Ease of Cost of
Required
Installation Operation Operation
For any population
Sewage Lagoons Large Low Low Easy Low
Activated Sludge Small High High Complex High
Sequencing Batch Reactor Small High High Complex Medium
Anaerobic/Aerobic Medium Medium Medium Moderate Medium
For populations of less than 200,000 people
On-site Treatment Small Low Medium Easy Low
Oxidation Ditch Small High Medium Moderate Medium
Rotating Biological Contactor Small High High Moderate Medium

Once the most appropriate technology, having regard to the objectives of the Local Sustainable Sanitation Plan,
has been selected, it is time to establish the dimensions of the project. The toolkits described in this manual will
assist in this process.
4.3.6 Septage management design toolkit
The NSSMP developed a number of interactive computer-based toolkits. These can be used to derive initial
estimates of some key parameters affecting project design and development. For example, using the septage
management toolkit will allow estimation of the following:
 septage design flow,
 number of trucks needed,
 septage treatment plant size, and
 cost estimates.

Figure 30: Septage Management Design Tool

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 NSSMP Operations Manual

Design flow
Data about the local community should be entered in the toolkit's spreadsheet. This can be obtained from a survey
designed to provide information about the prevalence of septic tanks, their volumes and accessibility. Knowing the
design flow is required to adequately size the treatment facilities and plan for septage collection. Adjusting the
figures in the spreadsheet changes the estimated design flow.

Input Data from the community obtained from surveys

Output Cubic meters to be collected

Table 7: Design Flow for Septage Treatment Facility

What is the Design Flow of your Septage Treatment Facility?

Type in the information in the yellow boxes below.

Instructi Find the calculated values for the septage
on s management program in the blue boxes.

Number of people within the coverage

Name of the LGU area: 100,000 people
households in
1 How many households are there in the coverage area? 20,000 service area
How many commercial/institutional establishments are in the coverage businesses/
2 area? 2,500 institutional users
percent of the
What is your compliance target? As a percentage of the homes in the homes are likely to
3 target area, what percentage do you think will participate? 90% participate.
percent of homes
4 From the survey data, what percent of homes have septic tanks? 70% have septic tanks.
percent of the septic
From the survey, of the homes that have septic tanks, what is the tanks are
5 percent of the tanks that are desludgeable? 85% desludgeable.
cubic meters
From the survey, what is the average desludge volume of residential (desludge capacity -
6 septic tanks in the target community?** 3 residential)
cubic meters
(capacity
From the survey, what is the average volume of commercial/institutional commercial /
7 septic tanks in the target community? 10 institutional)
Septic tanks should be desludged every 3 to 5 years. What is the
8 target desludging frequency for your program? 5 years
days per
9 How many days a week will your program operate? 5 week
The design flow of your septage treatment cubic meters per
Answer: facility is 47 day* Working days per month 20
Working days per year 245
cubic meters per
952 month # Weeks in a year 52
cubic meters per
11,426 year
* note: calculations on this and other tabs are rounded up for convenience
** average desludge volume estimated 2/3 of the septic tank capacity
Daily residential flow 26
Daily commercial flow 20

The information to be introduced into the yellow boxes will be gathered in the baseline study.

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 Part C: Budgeting

How many trucks

This spreadsheet in the toolkit uses the estimated design flow to determine how many trucks and their optimal
capacity (tank volume). The user will be able to estimate the number of loads per day. Since no trucking operation
is 100% efficient, the user inputs an efficiency factor (newer trucks are usually more efficient). This sheet may be
used to vary the volume of the truck to minimize collection costs (larger trucks mean fewer trips and fewer trucks).

Input Cubic meters to be collected (obtained from spreadsheet What is the Design Flow of your Septage
Treatment Facility?)
Time estimated for operations (obtained from surveys and work-field)

Output Number of trucks needed

Table 8: Trucks Required for Septage Management Program

How Many Trucks will be Required for your Septage Management Program?
The figures in the blue boxes are copied automatically from the previous page or automatically calculated. Fill in the yellow
Instructions boxes to the best of your ability to see the number of trucks required.
Design flow (from Tab 1): 47 cubic meters per day
Average septic tank volume (from Tab 1): 3 cubic meters
Number of septic tank volumes accommodated in the truck 3.3
Capacity of the truck* 10 cubic meters
Number of Loads Per Day per Truck (Fill in the yellow boxes to estimate loads per day)
Estimated drive time to the home or business 0.5 hours
Estimated time to pump the tank 0.5 hours
Estimated drive time from collection site to treatment plant 0.5 hours
Estimated unloading time at the treatment facility 0.5 hours
Estimated drive time to the next home or business 0.5 hours
Hours of operation per day 8 hours
Number of loads per day per truck 3
Efficiency of trucking operation 90% ***
Adjusted loads per day per truck 2.9
Answer: Number of trucks needed: 2 trucks*
Distance Calculator
Average Distance (km) per round trip (worksheet)
Number of Barangays served by the program 20
Distance from Barangay center by road to treatment plant (km) one way 5 Calculate for each Barangay and average
Distance from septage truck yard to Barangay center 5 Calculate for each Barangay and average
Distance from treatment plant to septage truck yard 5 km
Average distance (km) per round trip 13
* This spreadsheet assumes all of the trucks for your program will have the same capacity or volume. If your program uses
trucks with different volumes, use average volume (add up all the truck volumes and divide by the number of trucks)
** Number of trucks is calculated by dividing the design flow by the capacity of the truck (volume) and then dividing by the
likely number of loads per day
*** Efficiency of the trucking operation. No trucking operation is 100% efficient. Use 80% efficiency for new trucks. Older
trucks are less efficient and this can be reflected by lowering the efficiency value.
**** The user should experiment with the spreadsheet by varying the capacity of the truck and the number of hours per day of
operation to minimize the number of trucks required.

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CAPEX and OPEX Estimation

This spreadsheet tab calculates the estimated costs for the treatment system, the trucks, and the operation and
maintenance of both. Then it calculates the estimated tariff based on the number of service connections, loan
payment and operational expenditures.

Input (yellow Number of trucks needed (obtained from spreadsheet How Many Trucks Will be Required for your
boxes) Septage Management Program?)
Data from the community (obtained from spreadsheet What is the Design Flow of your Septage
Treatment Facility?)
Estimated costs of trucks units and O&M (PhP) and water consumed (obtained from technicians)

Outputs Total cost of treatment and collection truck (PhP)

(green boxes) Estimated annual billed volume (in m3.)
Estimated O&M costs (in PhP)

Table 9: Septage Collection and Treatment Costs

Septage Collection and Treatment Costs

Number of people living within the coverage area 100,000 people in coverage area 175,000.00
Per person cost estimate for treatment facility 163.23 PhP
Estimated cost of treatment facility 16,322,857 PhP
Estimated cost of septage truck per unit 7,000,000 PhP
Total cost of septage truck 14,000,000 PhP
Total cost of treatment and collection truck 30,322,857 PhP
Estimated O&M Costs & Billed Volume
Total cost of treatment and trucks 30,322,857 PhP
O&M Cost per annum to operate treatment facility 5% 816,143 PhP/year
O&M Cost per annum to operate septage collection
truck 20% 2,800,000 PhP/year
O&M Cost per annum to operate treatment plant &
septage collection truck 3,083,206 PhP/year
Estimated Billed Volume
Number of households within coverage area 20,000
Number of commercial and institutional users 2,500
Estimated residential water consumption per month per
service connection (in m3.) 30 cu. m./month
Estimated residential water consumption m3 per month 6
Estimated commercial water consumption per month
per service connection (in m3.) 50 cu. m./month
Estimated annual billed volume (in m3.) 8,700,000 cu. m./year

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4.3.7 Sewerage design toolkit

The interactive sewerage toolkit is designed to help local implementers better understand the costs and resources
required to develop and implement sewerage projects.
It provides rough estimates of capital costs (CAPEX) and operating costs (OPEX) for sewerage systems, based on
population figures. From the CAPEX and OPEX, the spreadsheet calculates the National Government subsidy, and
then the annual and monthly payments. Based on the number of people connected to the system, and the monthly
payments, the spreadsheet can then calculates the required tariff.

Input (yellow Population

boxes)
Debt conditions, Interest rate and tenor
Outputs CAPEX, OPEX, Debt Repayment
(green boxes)
Monthly tariff required per household

Table 10: Sewage Collection and Treatment Costs

Year 1 Year 35
How many people will be connected to the sewerage system? 300,000 599966.8658

Scenario 1 4065 pesos per person

CAPEX 1,219,500,000 pesos

OPEX for treatment 1 94,500,000 pesos per year
OPEX for Collection 1 10,500,000 pesos per year

National subsidy for CAPEX 40%

Remaining Funds to be Sourced 731,700,000 pesos

Principal Amount 731,700,000

Interest Rate 10%
Number of years for loan 15

Interest and principal expense per month -7,862,885.65 per month

Annual loan payment 94,354,627.76

Year 1 Year 35
Plus annual OPEX
treatment 94,500,000 94,500,000
Plus annual OPEX
collection 10,500,000 10,500,000
Total annual payment 199,354,628 105,000,000
Monthly payment 16,612,886 8,750,000
Monthly tariff/ Per cubic meter 9.23 2.43
Monthly tariff/ Per person 55.38 pesos 14.58 pesos
Monthly tariff/ Per family 276.88 pesos* 72.92 pesos*

* This is the median tariff for a typical sewerage project for the indicated number of people. The actual tariff may
be as much as 30% more or less depending upon the specific nature of the program.

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Table 11 Sewerage Scenaria

Scenaria
1 2 3 4 5 6
Sanitary Combine Sanitary Combine Sanitary Combine
Sewerage
sewer Sewer sewer Sewer sewer Sewer
Activated Activated
Treatment Lagoon Lagoon BRC BRC
sludge sludge
CAPEX
Collection PHP person 665 345 665 345 665 345
Treatment PHP person 3400 1025 1025 3400 2750 2750
Total
PHP person 4065 1370 1690 3745 3415 3095
CAPEX

OPEX
PHP/ Person
Collection 35 15 15 35 35 15
year
PHP/ Person
Treatment 315 50 50 315 265 265
year
Total PHP/ Person
350 65 65 350 300 280
OPEX year

4.3.8 Training requirements

Organization Unit Knowledge and Skills Required

LGUs NSSMP Project Office  use of NSSMP toolkits

 budget planning and implementation
 septage treatment technologies
 wastewater treatment technologies
 sewerage technology
WDs Project Office  use of NSSMP toolkits
 budget planning and implementation
 septage treatment technologies
 wastewater treatment technologies
 sewerage technology

After the initial design concept work has been done and preliminary (pre-feasibility) assessments conducted, the
local implementer should prepare a project concept note (see Annex).
4.3.9 Supporting organisations
The design of the project requires technical expertise. The implementer can receive assistance from several
organizations and entities:
 DPWH actually designs and implements drainage projects.
 The NSSMP office can provide technical knowledge and advice - and financing - for design and feasibility
studies.
 LWUA provides consulting assistance and training on technical designs.
 MWSS can share their experience in wastewater systems planning and design in Metro Manila.
 The PWRF finances feasibility studies for septage and sewerage systems.
 Private companies - LGUs and WDs can contract private specialised engineering or construction companies to
develop designs and carry out feasibility studies.

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 Part C: Budgeting

4.4 Project Feasibility

After designing the project and estimating the

relevant costs the Local Project Office will assess
the feasibility of the project. Project feasibility
study should automatically be undertaken if
external financing is required.
The Local Project Office should also evaluate the
possibility of a public-private partnership (PPP),
as an alternative to accessing funds entirely from
public sources.
In order to evaluate the feasibility of the project, it
is necessary to gather and/or derive the following
information:
The dimensions of the project, e.g. the
wastewater volume quantity to be treated, which
affects the determination of technology and the
financing requirement.
The financial resources needed (i.e. the amount
of money that the project needs to start operations).
The LGU/WD budget and NSSMP funding provision (i.e. the funds available from local implementers and the
NSSMP).
The proposed tariff (i.e. the amount that households have to pay for the service), which should be high enough to
allow debt servicing but not so high that it causes social unrest. This tariff will differs among cities, it depends on
factors such as (population to be served, volume of septage to be handle, etc)
The affordability of the project (e.g. the willingness to pay of service users).
The financial model and financing structure, to be analysed in the feasibility study for the project.
The project's "bankability" (based on the above information, the financial analysis must show that the external
financing can be paid back, and that the financial risks are acceptable).
The project's social and environmental feasibility.
4.4.1 Process workflow and description
After defining all of the technical aspects of a project, it is necessary to evaluate its technical and financial feasibility
and social and environmental acceptability and sustainability. Based on estimates of the willingness to pay of the
population to be served, and the estimated costs of the project, financial modeling will generate the tariff needed for
construction, operation and maintenance of the project.
This tariff may need to be revised as a result of the baseline survey. The community's capacity to pay the tariff will
determine the feasibility of that version of the project, and the financial structure of the project may need to be
redesigned.
Where possible, alternative ways of implementing (and funding) the project should be analysed. As a result of the
feasibility study, it may be necessary to redesign some aspects of the project, including the financial structure,
before a decision to proceed can be reached.
The LGU/WD may seek funding assistance to LWUA, DOH, DENR and DPWH for the conduct of FS. In addition,
LGUs/WDs may hire external consultants to undertake the feasibility studies.
LGUs and WDs can also require assistance to the Water Revolving Fund Support Program (PWRF). A water fund
from USAID and JICA who provides technical guidance among others assistance activities. Notice that the program
concludes on 2013.

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Figure 31: Feasibility Process Workflow Chart

Technical feasibility
Dimension: people benefited, cubic meters treated
NSSMP Office will evaluate the dimension of the project using the tables of part C1.1. Technical description of the
application form submitted by local implementers. NSSMP will assure that data is reliable with the community and
with the technology proposed. It is important to check
 the coverage area of the project
 people benefited
 cubic meters treated
 Reasoning between septage or sewerage implementation
Technology used
Based on previous chapters related with technology selection and on previous projects implemented on The
Philippines, the NSSMP Office will analyse the capacity of the technology selected to manage the project

Financial and Economic feasibility

Bankability
The NSSMP Office will analyse the bankability of the project. The financial analysis must showed that the external
financing can be paid back, and that the financial risks are acceptable. NSSMP Office will review the data founded
on part C.1.2. Financial Feasibility, and ensure they are reliable in terms of proper project dimensioning and
realistic assumptions. Bankability factors include:
 investment cost
 O&M cost
 life time cost

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 Part C: Budgeting

 project IRR
 project NPV
 debt service ratio.
Financing
NSSMP Office will also evaluate the financing plan. This aspect is explained deeper on Part D: Financing. The
factors that will be measured are:
 creditworthiness
 capacity to finance 60% of the project.
Tariff
The Project Financial toolkit will give a Tariff as output. This tariff will allow repayment the financing debt and
provide the required return to capital.
Affordability
After a tariff estimation, it is necessary to evaluate the capacity of the community to pay it. For this reason it is
necessary to identify the financial situation of the community and review the Baseline Study which will allow the
project proponent to identify the community’s affordability and willingness to pay.
According to OCDE “Water supply and sanitation services are considered economically affordable if households
can pay the water bill without a significant reduction of expenses for other essential goods and services.”
It is important to distinguish between the households’ “ability to pay” and their “willingness to pay”. The ability to
pay is a more objective indicator based on statistical data and estimates whether or not household income is
sufficient to pay the increased price of services without serious prejudice for its ability to pay for other essential
goods and services. On the other hand, the “willingness to pay” indicator is based on subjective statements of
households and aims to identify the maximum amount a consumer would be willing to pay for a given number of
units of the service of given quality. See annexes to understand how tariff will affect families’ expenditure.
Website of National Statistics Office will provide further information on capacity of families to pay the tariff under the
Family Income and Expenditure Survey (FIES).
Once the tariff is considered as bankable and affordable LGU can start the process to launch the Ordinance. This
Ordinance will also serve as an IEC process. This Ordinance should content law enforcement and punishment to
people who do not pay.

Environmental factors
The Environmental Impact Statement (EIS) System in the country originated in 1977 with the promulgation of
Presidential Decree (PD) 1151, known as the Philippine Environmental Policy. This decree established the
requirement for all proponents, including the public and private sectors, to prepare an EIS for any proposed action,
project or undertaking that may significantly affect the quality of the environment.
The septage and sewerage projects under the NSSMP are not classified as environmentally critical projects
(ECPs) but are most probably located in environmentally critical areas (ECAs) such as watershed reserves or
aquifer recharge areas and/or near waterbodies, etc. Thus, they will be covered by the EIS system which will
require application for an Environmental Compliance Certificate (ECC).
The type of document to be submitted to the DENR-EMB Regional office with an ECC application will depend on
the operating capacity of the domestic Wastewater Treatment Facility (WWTF). For a WWTF with an operating
capacity of < 5,000 m 3/day, an Initial Environmental Examination (IEE) is required while an Environmental Impact
Statements (EIS) is applicable if the WWTF capacity is ≥ 5,000 m 3/day. The IEE is an abbreviated version of the
EIS applicable to projects that are considered non-critical but that will be located in an environmentally critical area.
The EIA Report should focus on the environmental aspects of the project that have a scientific basis and are
verifiable. The possible impacts on the four major environmental components (land, water, air and people) and their
applicable subcomponents should be investigated and evaluated. In addition, related environmental concerns as
expressed by the local community or stakeholders through public scoping, public consultation or any other form of
public participation during the conduct of the EIA study should also be considered. The EIA Report should present

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the projected impacts and the proposed environmental management and monitoring plan to minimize these
impacts within acceptable levels.
The EIA Report should be supported by the following documents:
 proof of compatibility with the existing Land Use Plan, if necessary
 proof of ownership or authority over the project site
 accountability statements of the proponent and the EIS preparers
 photographs or plates of the project site, impacted or affected areas and local communities
 duly accomplished Project Environmental Monitoring and Audit Prioritization Scheme (PEMAPS) questionnaire.
Additionally, these are required for co-located projects:
 copy of existing ECCs
 latest Self-Monitoring Reports.
The IEE or EIS for a project may be prepared by the proponent's technical staff or by an EMB-accredited
professional group commissioned by the proponent.
For further information refer to Annexes.
Environmental improvement
The NSSMP Office will evaluate the expected impacts that the project will have on the environment, based on part
B.4.4. Environmental objectives of the application form, where there is a table which indicates the expected
improvements for Color, pH, COD, BOD, TSS, Oil & Grease and Heavy Metals.

Institutional Requirements
This refers to the administrative aspects of planning and conducting the project. Annex 8.1.7 summarises the
organisations with an interest in the project feasibility assessment processes, together with associated project
inputs, outputs and supporting documentation. Key administrative requirements and measures include:
 an Executive Order establishing a TWG (see Annexes for guidance material)
 a Resolution to adopt a Local Sustainable Sanitation Plan (Annex)
 an Ordinance for Septage Management (Annex)
 an MoU for a partnership with a private firm (Annex).
Ordinance
The Municipal Ordinance should create an enabling environment to encourage the implementation of sanitation
projects, and establish the mandate and authority for key potential implementers to do so. Annexes contains a
Sample Ordinance for Septage Management.

Communication
Strategic design
The NSSMP Office will check that the strategy to communicate the project to the community is applicable and
relevant to the project proposal that has been developed. In particular the Office will review the proposed publicity
and promotion activities, the contents of the materials, the program of public meetings, the proposed timelines, and
the availability of staff and resources for implementation.

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4.4.2 Financial Toolkit

In addition to the septage management and sewerage toolkits, an additional NSSMP tool is available to evaluate
the financial feasibility of the project. This is an excel which states the tariff and capacity to pay Capital expenses,
Operational Expenses and debt. Following pages show snapshots from the tool.
This spreadsheet tab calculates some financial data that can be used to determine the feasibility of the project. It
will also calculate the Internal Rate of Return (IRR) 2 and the Net Present Value (NPV) 3 of the project.
However, it should be recognized that using this tool will only give a preliminary assessment of financial feasibility.
The final feasibility assessment will be based on a more refined project proposal/design.

Input Total cost of treatment and collection trucks (obtained from spreadsheet Estimated Cost)
Financing Mix (obtained from LGU Budget, WD budget and NSSMP funding)
Increase in costs and population (obtained from experts)

Output Project IRR and NPV

Table 12: Septage Management Program Financial Tool

Septage Management Program

Type information into the yellow cells. The calculated values will appear in the blue cells.

Amounts in thousand pesos 1,000

Cost of treatment plant (in thousand pesos) 16,323 Financing Mix
Cost of collection trucks (in thousand pesos) 11,335 Bank loan
Total 27,658 Principal 80% of project capital costs
Average water consumption in m3. per annum 8,700,000 Interest 10% per annum
Collection efficiency 90% Tenor 10 years inclusive of grace period
Estimated user fee per m3. of water consumed (in
pesos) 0.95 Grace period 3 years
Proposed margin to cover for other expenses 0% Cost share (in%) 0 from (name of agency)
Proposed tariff 0.95 Equity (in%) 20%
Average annual population growth rate 2.0% Other fees 1%
Average increase in O&M costs 5%
Estimated costs for recovery 83,040.81

Project IRR 14%

Project NPV 3,191

In the same spreadsheet is possible to find other financial data, as presented below. Even if users do not need to
introduce any data to these cells, they are encouraged to become familiar with these tabular tools.

2
Internal Rate of Return (IRR) is the discount rate that makes the Net Present Value (NPV) of all cash flows from a project equal to zero. A
project is considered financially feasible if its IRR is greater than the Weighted Average Cost of Capital (WACC).
3
Net Present Value or NPV is the difference between the present value of the benefit stream and the present value of the cost stream for a
project. The NPV calculated at WACC should be greater than zero for a project to be financially feasible.

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Table 13: Weighted Average Cost of Capital (WACC)4.

Weighted Average Cost of Capital (WACC)
Financing Sources Amount Mix Rate Cost of Capital
Equity 5,532 20% 15.00% 3.0%
Loan proceeds 22,127 80% 10.00% 8.0%
Total 27,658 100%
WACC 11.00%

Table 14: Loan Payment Schedule

Year Period Total Yearly Payments Interest Principal Balance
0 0 22,127
1 0 2,213 2,213 0 22,127
2 0 2,213 2,213 0 22,127
3 0 2,213 2,213 0 22,127
4 1 4,545 2,213 2,332 19,794
5 2 4,545 1,979 2,565 17,229
6 3 4,545 1,723 2,822 14,407
7 4 4,545 1,441 3,104 11,303
8 5 4,545 1,130 3,415 7,888
9 6 4,545 789 3,756 4,132
10 7 4,545 413 4,132 -0

Table 15: Income Statement and Cash Flow

Projected Income Statement
(in thousand pesos) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Revenues 7,474 7,623 7,776 7,931 8,090 8,252 8,417 8,585 8,757 8,932
Operations and maintenance costs -
treatment facility 816 857 900 945 992 1,042 1,094 1,148 1,206 1,266
Operations and maintenance costs –
2,267 2,380 2,499 2,624 2,756 2,893 3,038 3,190 3,349 3,517
collection trucks
Depreciation 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950
Earnings before interest and taxes 2,441 2,436 2,427 2,412 2,392 2,367 2,335 2,297 2,252 2,199
Interest expense 2,213 2,213 2,213 2,213 1,979 1,723 1,441 1,130 789 413
Other costs 277
Earnings before income tax (48) 223 214 200 413 644 894 1,167 1,463 1,786
Income tax
Net Income (Loss) (48) 223 214 200 413 644 894 1,167 1,463 1,786

Projected Cash Flow

Net Income (Loss) (48) 223 214 200 413 644 894 1,167 1,463 1,786
Plus depreciation 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950
Less: Principal repayments - - - 2,332 2,565 2,822 3,104 3,415 3,756 4,132
1,901 2,173 2,164 (183) (203) (228) (260) (298) (344) (396)
Loan Proceeds 22,127
Equity Contribution 5,532
Less capital investment (27,658) - - - - - - - - -
Net cash flow 1,901 2,173 2,164 (183) (203) (228) (260) (298) (344) (396)
Cumulative cash flow 1,901 4,074 6,238 6,055 5,852 5,624 5,364 5,065 4,722 4,325

4
Weighted Average Cost of Capital (WACC) is the weighted average of the cost of debt and the required return to equity.

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4.4.3 Sustainability checklist

The following checklist can be used to determine the sustainability of a project technology.
Technical
1. Can the technology be repaired easily by the user if it breaks down? If not, is there an infrastructure that can do that at an
affordable cost?
2. Can users maintain the technology? If not, is there an infrastructure that can do that at an affordable cost?

3. Does implementation include training on operation and maintenance?

4. Can the technology be reproduced by the local private sector with local materials and skills?

5. Is the frequency of maintenance and repairs acceptable to the user?

6. Does the technology have the potential for replication and upscaling?

7. Does the project include the monitoring of proper functioning, usage and consumer satisfaction?

Financial
1. Can the target group afford to buy the service? Can they afford the cost of use, maintenance, and repairs?
2. Does the technology save on expenditures? Does it generate income? Does it save time?
3. Do people pay the real cost, or is the service subsidized? If it is subsidized, will the subsidy go on after the project stops?

4. Is there profit-based sustainability? Do the actors involved in production, transport and sales, all make a profit so activities
will go on after the project stops?
5 What is the expected market for the product or service? Has a market study been performed? Is the expected market
sufficient to start a supply chain?

Social
1. Is the service to be introduced ``better`` than existing options? Is it cheaper, simpler, more effective, more attractive?

2. Who will own and manage the technology? Individuals, committees, schools, institutes, organisations, NGOs,
government?

4.4.4 Training requirements

Organization Unit Knowledge and Skills Required

LGUs NSSMP Project Office  use of NSSMP toolkits

 project feasibility assessment
 financial and economic analysis
 budget planning and implementation
WDs Project Office  use of NSSMP toolkits
 project feasibility assessment
 financial and economic analysis
 budget planning and implementation

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4.5 Project Application and Selection

After defining the project and evaluating its feasibility, local

implementers should apply for financing to the DPWH.
The project selection, design and feasibility assessment
processes lead to the list of projects requiring funding. It is
important that these processes are transparent and properly
documented, so they can support the funding applications that
follow.
This section describes the processes for deciding which
projects have DPWH approval and merit Government
funding support. It is a guide to facilitate the decision making
of authorities and, at the same, a checklist for local
implementers.

4.5.1 Process workflow and description

Figure 32: Project Selection Process Workflow

Offical
communication
and Open
Application Period

Receiptance
of Re-ellaborate
Applications

Tool
Is there all
information No
required? Checklist

Yes

Technical Budget
evaluation application

Feasibility
evaluation

Tool
Ranking of
Projects Project
Prioritization

Select
projects
according to
budget

The process should start with the official communication of an Open for Application period. Attached to this
communication should be a description of the application and selection process and its timeframes, and the
documentation required to make an application.

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 Part C: Budgeting

Once authorities have received applications they will check whether the application is complete and if all required
documents have been submitted. There is a checklist on the NSSMP website for this purpose. If some information
is missing, a letter will be sent to the applicant.
DPWH and its NSSMP Office will analyse the technical and financial aspects of each project, evaluate its feasibility
and significance, and establish a project ranking. There is a Project Prioritization Tool on the NSSMP website
which can rate a project according to relevant aspects such as population benefited, project sustainability, etc.
4.5.2 Application form
Application form, available at the NSSMP website and attached as annex is formed by seven parts:
A. Addresses and references. It contents the contact details of Local Implementers in charge of the application.
B. Project details. This part, divided into four sections, describe the characteristics of the project. Applicant must
indicate the technical factors of the project design such as number of trucks needed for septage management,
number of interceptors, main collectors, pumping stations among others. Applicant will also indicate the entity
or entities that will be in charge of operation, supervision, and communication.
C. Another section refers to the main beneficiaries of the project. This will be a comparison between people
benefited before and after project implementation
D. There is a section which states the project objectives. In this section the applicant will indicate the region
benefited by the project and different objectives of the project related to socio-economic, significance and
environmental aspects.
E. Results of feasibility studies. This part measures the pre-feasibility of the project taking into account
technical, financial, sustainability of the project through local revenue per capita, performance and customer
service standards and administrative aspects.
F. Timetable. This part illustrates the estimated schedule for project implementation and after that, several tables
indicate how advanced the project is. Applicant will state whether or not any required document / authorization
has been issued or if any agreement on financing scheme has been signed
G. Analysis of the environmental impact. Applicant will explain how the project contributes to different aspects
of environmental issues. There is a section to indicate the estimated date for the Environmental Impact
Assessment (EIA) or to indicate the results of it depending on whether or not an EIA has been conducted
already.
H. Justification for the public contribution. This section explains the financing structure of the project and the
private participation on the project. Applicant will indicate the requirement of NSSMP assistance and how this
will impact the project.
I. Endorsement of competent national authority. This is a formal section to be completed by local
implementers mentioning the accuracy and veracity of all data presented

4.5.3 Project Prioritization Tool

Once NSSMP Office collects the application form it will analyze the reliability of data presented and rank the project
according to the prioritization tool. The NSSMP Office will prepare a long list of priority projects
The Project Prioritization Tool measures seven aspects of the project (a screenshot of the tool is provided below):
A. Project Focus. The extent of sanitation already in place.
B. Beneficiaries. The percentage of the population that would benefit from the project.
C. Local revenue per capita. How much a citizen contributes to LGU revenues.
D. Debt Service Ratio. This measures the capacity to repay a loan.
E. Environmental Sensitivity. DENR has determined some regions as environmentally sensitivity areas.
F. Significance. This measures the scale or dimension of the project.
G. Project-specific standards. This measures the project sustainability in relation to customer service.

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Figure 33: Project Prioritization Tool

Project Prioritization Tool
Name of LGU:
Name of Project:
Total Score:
Indicators Score
A. Project Focus 5
1. Is this a sewerage project with septage management already in place? - 5 points
2. Is this a sewerage project without septage management in place? - 3 points
3. Is this a septage management project within years 1 - 4 of planning cycle? - 5 points
4. Is this a septage management project for years 4 -10 of planning cycle? - 3 points
B. Beneficiaries (Divide the total population of the LGU by the number of direct beneficiaries. Then rank
accordingly.) 5
1. If 100% of total population benefits directly - 5 points
2. If between 75% and 100% of total population benefits directly - 4 points
3. If between 50% and 75% of total population benefits directly - 3 points
4. If between 25% and 50% of total population benefits directly - 2 points
5. If less than 25% of total population benefits directly - 1 point
C. Local revenue per capita. This ratio measures the average amount that each citizen of the LGU contributes to the
LGU’s internally generated revenues, such as local business and property taxes, tariffs, licenses, and fees. This ratio
reflects the LGU’s orientation towards public service. It can serve as an indicator for the cost recovery of future
projects. A high indicator is desirable. A low indicator means that the LGU should consider increasing its fees and
taxes by either improving its efficiency and reach or adding more taxes, licenses and fees.(units in PHP / year) 5
1. If over 30,000 - 5 points
2. If between 25,000 and 30,000 - 4 points
3. If between 15,000 and 25,000 - 3 points
4. If between 10,000 and 15,000 - 2 points
5. If less than 10,000 - 1 point
D. Debt Service Ratio: In general, it is calculated by: DSR = (Annual Net operating income + Depreciation + other
non-cash items)/(Principal Repayment + Interest payments). The higher this ratio is, the easier it is to obtain a loan.
Higher priority is giving to LGUs with less borrowing capacity. 5
1. If DSR < 0.8, assign a value of 5
2. If DSR ≥ 0.8 but < 1.0, assign a value of 4
3. If DSR ≥1.0 but < 1.2, assign a value of 3
4. If DSR ≥1.2 but < 1.5, assign a value of 2
5. If DSR ≥ 1.5, assign a value of 1
E. Environmental Sensitivity. Agency identifies regions that are environmentally sensitive. If the project is in such a
region it will receive a higher priority. 2
1. If in a DENR identified region of environmental sensitivity - 2 points
2. If not in an environmentally sensitive region - 1 point
F. Significance. The national agency will prioritize projects that have a wider scope. Projects of national significance
will receive a higher priority than those with only regional or local significance. Projects rank higher if they are in World
Heritage sites, are significant tourist destinations, or otherwise are of national significance. 3
1. Nationally significant projects - 3 points
2. Projects of regional significance - 2 points
3. Projects of local significance - 1 point
G. Project-specific standards. Rate the adequacy of design, performance and customer service standards.
Projects designed with standards to improve long-term sustainability will have a higher priority. 3
1. The project-specific standards will add significantly to sustainability - 3 points
2. The project specific standards will adequately address sustainability - 2 points
3. The project lacks sufficient standards to ensure sustainability - 1 point
Total Score Maximum score is 28 28

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4.5.4 Organisation and documentation requirements

The table below summarizes the organizations involved in the Project Application and Selection process together
with associated project inputs, outputs and supporting documentation.

Table 16: Project Application-Selection Organisation Summary

Organisation Task Input/Output Timing Links &
Description Documentation
1. DPWH Receive & Input: See sample
review project i) Project brief from LGU 1-3 approval/non-
brief ii) Supporting evidence (e.g. MoU with weeks approval letters
financial institutions) (Annex)
Output:
i) Decision regarding approval or non-
approval of national government co-
financing for project
ii) If approval, then budget request needs
to be made and LGU is informed of
successful application
iii) If non-approval, then project brief is
returned to LGU with an explanation
as to the reasons for non-approval
2. LGU Develop project Input: See NSSMP Guide
brief i) NSSMP Guide for Local Implementers 3-6 (and sewerage/
(and toolkits) weeks financial toolkits)
ii) DoH Operations Manual on the Rules and DoH
and Regulations Governing Domestic Operations Manual
Sludge and Septage
Output:
i) Project brief (technical, financial &
organisational summary)
Produce Input:
sewerage i) Identify who will conduct the FS 8 - 16
Feasibility Study ii) Gather technical, financial and weeks
(FS) operational data and produce options
Output:
i) Full Feasibility Study incorporating
detailed technical design, financial
analysis, operational plans and
institutional framework
Produce local Input: See guidance
Ordinance i) Feasibility study data 16 - 6
2 material on
ii) Stakeholder consultation feedback weeks stakeholder
iii) Public hearings consultation
Output: (Annexes)
i) Ordinance
See sample
Ordinance (Annex)
Secure 30% Input: See sample MoU
financing share i) Present FS to financial institutions 6 - 12 (for a private
Output: weeks partner) (Annex)
i) Loan agreement (or MoU) with
financial institution(s) for required
financing

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Organisation Task Input/Output Timing Links &

Description Documentation
Apply for 40% Input: See funds
national i) Submit project plan and proof of 24 - 48 application process
government financing to DPHW weeks in Budgeting
grant Output: Section
i) Obtain funds from MDFO
Obtain Input: See list of required
necessary i) Submit regulatory applications and 12 - 36 regulatory permits
regulatory necessary supporting information weeks /planning docs
approvals (in Output: (Annex)
cooperation with i) Obtain necessary permits
WD)
3. WD Assist in Input: See NSSMP Guide
developing i) NSSMP Guide for Local Implementers 3-6 (and sewerage /
project brief (and toolkits) weeks financial toolkits)
ii) DoH Operations Manual on the Rules and DoH
and Regulations Governing Domestic Operations Manual
Sludge and Septage
Output:
i) Project brief (technical, financial &
organisational summary)
Initial financing Input:
approach i) Project concept (business plan) 2-4
Output: weeks
i) Feedback from financial institutions on
willingness to offer financing
Assist with Input:
production of i) Identify who will conduct the FS 8 - 16
sewerage ii) Gather technical, financial and weeks
Feasibility Study operational data and produce options
(FS) Output:
i) Full Feasibility Study incorporating
detailed technical design, financial
analysis, operational plans and
institutional framework
Secure 30% Input: See sample MoU
financing share i) Present FS to financial institutions 6 - 12 (for a private
Output: weeks partner) (Annex)
i) Loan agreement (or MoU) with
financial institution(s) for required
financing
Assist LGU in Input: See funds
applying for 40% i) Provide any necessary support to LGU 24 - 48 application process
national for DPWH funding application weeks in Budgeting
government Output: Chapter
grant i) Obtain funds from MDFO

4.5.5 Training Requirements

Organization Unit Knowledge and Skills Required

DPWH NSSMP Project Office  wastewater management / engineering
 technical and financial evaluation of sanitation projects
 use of the Prioritization Tool

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4.6 Project Procurement

Once project funding has been approved by the

NSSMP Office, the Local Project Office through
the Bids and Awards Committee (BAC) will
conduct the procurement process, e.g. for
engaging an engineering contractor to build the
project.
The objective of procurement is to acquire
services and goods as economically as
possible. This is best achieved through a
transparent, formal and competitive bidding
process.
At the procurement process the Local Project
Office will evaluate diverse factors such as the
type and value of the goods or services, the
potential bidders, and the cost of the process
itself. The Project Office will decide whether a
tender process is needed, and what kind of
process is desirable.
Local Project Office will decide if two separate tenders are launched for Construction and O&M or if just one tender
is launched for the whole package (Construction +O&M).

4.6.1 Participating agencies

Institution Expected Role

LGUs As local project implementers:

 design and preparation of procurement process
Project Office

WDs As local project implementers (or implementing partners):

 review the scope of work

Construction  review of project design

companies  construction plan
 design of sub-projects
 project supervision
 implementation

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4.6.2 Process workflow and description

Figure 34: Procurement and Tendering Process

Preparation for Procurement

Procurement Planning
The objective of procurement planning is for the LGU to schedule its procurement activities in advance, consistent
with its approved budget and its target implementation date.
Procurement planning involves the following activities:
 ensuring that detailed engineering investigations are conducted, and plans for procurement are linked to
budgets;
 preparing the Project Procurement Management Plan (PPMP) and consolidating all PPMPs into the Annual
Procurement Plan.

Formulating a PPMP entails identifying project requirements, writing the technical specification, determining the
Approved Budget of Contract (ABC), identifying the schedule of milestone activities, and determining the method of
procurement.
Detailed engineering investigations, surveys and designs have to be conducted prior to bidding and awarding of
contract. These investigations must be duly approved in accordance with the standards and specifications
prescribed by the Local Chief Executive (LCE) or his duly authorized representatives. The detailed engineering
investigations should be based on a feasibility or preliminary engineering study that establishes the technical
viability of the project and its conformance to land use and zoning guidelines
The Approved Budget for the Contract (ABC) may be equal to or less than the appropriation for the project/activity
contained in the approved annual/supplemental budget and will be the ceiling of bid prices that shall be submitted
by prospective bidders. It is also the amount of reference in computing the amount of bid security and performance
security that shall be posted by the bidder.

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Preparation of Bidding Documents

After procurement planning, the PPMP is transformed into bidding documents that should contain all information a
prospective bidder needs to prepare its bid, and should accurately and comprehensively reflect the main
elements of the PPMP. The bidding documents form part of the contract and define the following, amongst other
things:
a) The objectives, scope and expected outputs and/or results of the proposed contract
b) The expected contract duration
c) The obligations, duties and/or functions of the winning bidder
d) The minimum eligibility requirements of bidders, such as track record, to be determined by the LCE.
LGUs are required to use the Philippine Bid Documents issued by the Government Procurement Policy
Board as the standard format in the preparation of its bidding documents. The contents of the bid documents are
shown in Annexes
The bid documents should include explicit requirements for the successful bidder to collect all of the data that will
be needed for the monitoring and evaluation of the project and its performance (see Section 4.9).

Conduct of Pre-Procurement Conference

In the pre-procurement conference called by the Bids and Awards Committee (BAC), all LGU officials involved in
the project meet to discuss all aspects of the said project to determine the readiness of the LGU to undertake the
procurement. It focuses on the technical specification, the ABC, the appropriateness and applicability of the
recommended method of procurement, and the availability of pertinent budget releases, among others.
The pre-procurement conference is conducted prior to the advertisement or issuance of the IAEB, preferably at
least 7 days, to give the technical staff sufficient time to incorporate the necessary changes, amendments or
revisions. The following items are usually discussed during the pre-procurement conference:
1. SOW
2. ABC
3. applicability and appropriateness of the recommended method of procurement and the related milestones
4. bidding documents
5. availability of the pertinent budget release for the project.
The conduct of the pre-procurement conference is mandatory for projects with ABCs of more than PhP 5.0 million,
to determine the readiness of the LGU to procure infrastructure projects in terms of the legal, technical and
financial requirements.
For projects with ABCs of PhP 5.0 million and below, the conduct of a pre-procurement conference is optional.
However, the BAC is encouraged to conduct a pre-procurement conference if the circumstances (e.g., complexity
of the technical specifications) warrant the holding of such a conference before the LGU proceeds with the
procurement.

Procurement of Infrastructure Projects

The procedure outlined below applies when competitive or public bidding is used as the mode of procurement. The
detailed procurement procedures are shown in Annexes.
In competitive bidding, bidders are treated equitably and fair grounds are provided for competition among them,
thereby ensuring that no single bidder significantly influences the outcome of the bidding. All procurement should
be done through public bidding except in cases wherein the LGU is allowed to resort to an alternative method of
procurement. It has to be noted that, for infrastructure projects, negotiated procurement is the only alternative
method of procurement that may be used.

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Figure 35: Infrastructure Projects Procurement Process

Advertisement and Posting of IAEB

The Invitation to Apply for Eligibility and to Bid (IAEB) serves as the notice to the public and all interested parties
of the procurement and bidding opportunities of the LGU. The advertisement and the posting of the IAEB ensure
widest possible dissemination of the procurement opportunity and, hence, increase the number of prospective
bidders and intensify competition among them in order that the LGU will get the best possible proposals, in terms of
quality and cost, for the proposed infrastructure project.
Acceptance of LOIs, Issuance of Eligibility Documents, and Conduct of Eligibility Check
Prospective bidders should submit their written Letters of Intent (LOIs) and Application for Eligibility to the BAC and
have these received not later than seven (7) calendar days after the last day of the period for advertising and/or
posting of the IAEB. Upon receipt of these documents, the BAC must immediately give the prospective bidders the
list of eligibility requirements, and inform them in writing of the date, time, and venue for the submission of such
requirements.
Prospective bidders may also submit their LOIs and applications for eligibility electronically to the LGU through the
PhilGEPS, likewise within the deadline set for the submission of written form of the documents.
Even if only one prospective bidder submits an LOI, the bidding process continues. If it is later declared eligible and
its bid is found to be responsive to the bidding requirements, its bid will be declared as a Single Calculated and
Responsive Bid (SCRB), and considered for contract award.
If no prospective bidder submits an LOI, the BAC should declare the bidding a failure, by way of a BAC Resolution.
In such a case, the BAC shall issue a Resolution declaring a failure of bidding. The BAC then conducts a study on
the possible reasons for the absence of interested bidders. If it is found that some of the terms and conditions of
the contemplated procurement, as stated in the IAEB, need to be modified or adjusted, the LGU may do so,
provided that a re-bidding is conducted.
The Eligibility Check is a procedure used to determine if a prospective bidder is eligible to participate in the bidding
at hand. The BAC shall use non-discretionary “pass/fail” criteria wherein the absence, incompleteness or
insufficiency of a document shall render a prospective bidder ineligible to bid for the particular procurement.

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A prospective bidder is also required to submit the documents listed in Appendix A to the BAC to determine its
eligibility to undertake the project:

Issuance of Bid Documents

Prospective bidders found eligible to participate in the bidding must be allowed to acquire or purchase bidding
documents. The BAC Secretariat issues the bidding documents to eligible bidders that may wish to secure said
documents. In the case that the bidding documents are sold, the LGU will only accept bids from those eligible
bidders that have purchased the bidding documents. Bidding documents may be sold for a price as determined by
the BAC and approved by the LCE based on the cost of its preparation and development.
The bidding documents, as a whole or individually, shall not be divulged or released to any prospective bidder prior
to their official release to the contractors. Neither should these be divulged to any person with or without direct or
indirect interest in the project being bid out, except those officially authorized to handle them. However, after its
official release, it shall be made available to the public, unless the procurement at hand affects national security.
Pre-bid Conference
The pre-bid conference is the initial forum where the LGU representatives and the eligible bidders discuss the
different aspects of the procurement at hand. Apart from discussing the technical and financial components of the
contract to be bid, the pre-bid conference also provides an opportunity for eligible bidders to request clarification of
the bidding documents.
If there is a request for clarification during the pre-bid conference or thereafter, the BAC of the LGU shall issue its
response through a Supplemental/Bid Bulletin, to be made available to all those who have properly secured the
bidding documents at least 7 calendar days before the deadline for the submission and receipt of bids.
Upon the LGU’s own initiative, the BAC may issue Supplemental/Bid Bulletins for purposes of clarifying or
modifying any provision of the bidding documents not later than 7 calendar days before the deadline for the
submission and receipt of bids. Any modification to the bidding documents must be identified as an “Amendment”.
Receive and Opening of Technical and Financial Envelopes
A Bid refers to a signed offer or proposal to undertake a contract submitted by a bidder in response to, and in
consonance with, the requirements stated in the bidding documents. “Bid” is also equivalent to and may be used
interchangeably with “Proposal” and “Tender”. A Bid has two components, the Technical Proposal or the Technical
bid, and the Financial Proposal or the Financial Bid.
Evaluation of Bids
Bid evaluation is done to determine the Lowest Calculated Bid which is done through:
 establishing the correct calculated prices of the bids, through a detailed evaluation of the financial component
of the bids
 ranking of the total bid prices as calculated from the lowest to the highest. The bid with the lowest price shall be
identified as the Lowest Calculated Bid (LCB).
Post-qualification
Post-qualification is the process of verifying, validating and ascertaining all the statements made and documents
submitted by the bidder with the LCB, which includes ascertaining the said bidder’s compliance with the legal,
financial and technical requirements of the bid.
If its eligibility documents had been validated and verified, and its compliance with the legal, financial, and technical
requirements of the bid had been ascertained, the bidder must be declared with the “Lowest Calculated
Responsive Bid” (LCRB).
Awarding of Contract
The BAC shall issue a Resolution recommending to the LCE award of the contract to the bidder with the “Lowest
Calculated Responsive Bidder” at its submitted bid price or its calculated bid price, whichever is lower. Should the
LCE concur with the BAC recommendation for award, he/she shall approve the same and cause the issuance of
the Notice of Award.

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Contract Signing and Approval, and Issuance of Notice to Proceed

The contract awardee and the LGU must enter into a contract immediately after the former has submitted the
performance security and all other documentary requirements within the period specified in the IRR-A. The parties
must sign the contract within 10 calendar days from receipt by the winning bidder of the Notice of Award.
For infrastructure projects with an ABC of above PhP 50 million, the NTP must be issued together with a copy or
copies of the approved contract to the successful bidder within 3 calendar days from the date of approval of the
contract by the LCE. For infrastructure projects with an ABC of PhP 50 million and below, the maximum period is 2
calendar days. Unless otherwise specified in the contract, a contract is effective upon receipt of the NTP. If an
effectiveness date is provided in the NTP by the LGU, such date shall not be later than 7 calendar days from
issuance thereof.
Post-qualification
Post-qualification is the process of verifying, validating and ascertaining all the statements made and documents
submitted by the bidder with the LCB, which includes ascertaining the said bidder’s compliance with the legal,
financial and technical requirements of the bid.
If its eligibility documents had been validated and verified, and its compliance with the legal, financial, and technical
requirements of the bid had been ascertained, the bidder must be declared with the “Lowest Calculated
Responsive Bid” (LCRB).
Awarding of Contract
The BAC shall issue a Resolution recommending to the LCE award of the contract to the bidder with the “Lowest
Calculated Responsive Bidder” at its submitted bid price or its calculated bid price, whichever is lower. Should the
LCE concur with the BAC recommendation for award, he/she shall approve the same and cause the issuance of
the Notice of Award.
Contract Signing and Approval, and Issuance of Notice to Proceed
The contract awardee and the LGU must enter into a contract immediately after the former has submitted the
performance security and all other documentary requirements within the period specified in the IRR-A. The parties
must sign the contract within 10 calendar days from receipt by the winning bidder of the Notice of Award.
For infrastructure projects with an ABC of above PhP 50 million, the NTP must be issued together with a copy or
copies of the approved contract to the successful bidder within 3 calendar days from the date of approval of the
contract by the LCE. For infrastructure projects with an ABC of PhP 50 million and below, the maximum period is 2
calendar days. Unless otherwise specified in the contract, a contract is effective upon receipt of the NTP. If an
effectiveness date is provided in the NTP by the LGU, such date shall not be later than 7 calendar days from
issuance thereof.
4.6.3 Supporting information
A range of forms and templates relating to procurement are provided in Annexes to the Manual.
Detailed Procurement Procedures
Documentary Requirements during Procurement
Sample Procurement Notice
Sample Letter of Acknowledgement of Receipt
Sample Shortlisting Notice
Sample Letter to Firms Not Shortlisted
Sample Letter Inviting Firms to Tender
Outline of Terms of Reference
Sample Notification Letter for Supply of Works
Sample Cover Letter Requesting Submission of Signed Contract
Sample Format for Negotiation Report

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4.7 Project Construction

After completing the preceding processes, the Local Project

Office will be ready to start the implementation process. If the
Office has decided to establish a PPP, a new society will have
to be created. If it has been decided that an external contract
manager is required, a contractor will have been engaged
separately through a parallel procurement process. The
complexity of the project usually determines this requirement.
Effective project management and monitoring can assist the
project to accomplish its objectives and meet its
performance targets as efficiently as possible. This is equally
relevant during the construction phase, when there is an
opportunity to ensure that high standards of construction are
employed. This section provides guidance on the construction
management and monitoring process.
4.7.1 Process workflow and description
Figure 36: Project Management and Pre-Construction/Construction. Process Workflow

A technical contractor will prepare a detailed design for the project, which will be analysed by the technical staff of
TWG/Local Project Office, with project timelines, construction phasing, and planned operation commencement
date.
Prior to the commencement of construction work, the NSSMP Office and the local implementer (or the contracted
construction supervisor, if engaged) shall develop a construction Monitoring Program. Once construction
commences, the Local Project Office (or the contracted construction supervisor) will begin to collect data on a
regular basis (in accordance with the Monitoring Program) to ensure that the project is constructed to meets
technical standards and specifications and performance targets. In this phase the Project Office will be in charge of
assuring the correct implementation of the project according to the Technical Proposal presented at the
tender process. The design of the Construction Monitoring Program should consider the following elements, among
others, relating to the construction phase of the project.

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Main activities
Site preparation works
Construction site work includes clearing, grading, and preparing the site for built features like roads, utilities,
buildings, parking lots, and the site drainage system.
Site layout plans
Local Project Office will conduct periodical visits to the construction site checking the:
 Engineering and architectural designs
 Mechanical and electrical installation plans
 Plant and equipment performance standards

Supporting activities
Materials specifications
The constructor should present a plan indicating how they are going to guarantee the appropriate materials
according to tender’s ToR.
Regulatory requirements
The Local Project Office will check that the construction contractor has all of the documents necessary for
initialising construction.

Reporting requirements
Budget breakdown and projections
The constructor should present the budget in a clear and transparent way to facilitate periodical reviews.
Construction work plan
The construction contractor will present a construction plan.
Implementation timelines and milestones.
The Local Project Office will check the completion of every milestone according to the Technical Proposal
presented during the tender process.
4.7.2 Training requirements

Organization Unit Knowledge and Skills Required

LGUs Local Project Office  infrastructure planning and development
MPDO  project management
Local Health Office  construction performance data analysis and reporting
 monitoring and reporting
WDs All  infrastructure planning and development
 project management
 construction performance data analysis and reporting
 monitoring and reporting

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4.8 Project Operation and Maintenance

Once the infrastructure project is successfully constructed,

the operational phase can begin. For some septage
management projects, there is no significant construction
stage, so they can start very soon after procurement.
The operation consists on activities to make the system
function correctly ensuring right sanitation service.
Maintenance involves all the activities needed for keeping
in perfect conditions the system ensuring its right
performance.
The importance of obtaining the necessary permits and
approvals from regulatory authorities before commencing
operations cannot be over-emphasized. These may
include an Environmental Sanitation Clearance (ESC) from
DoH, an Environmental Clearance Certificate (ECC) and a
Discharge Permit from DENR/EMB, and local business,
building and sanitary permits (see Annexes)
Failure to initiate the necessary actions (e.g. preparing and submitting applications) at the right time can lead to
delays in project commencement and implementation. Obtaining such approvals and clearances will often require
that the project complies with regulatory standards or technical specifications.
Project implementers should be aware of these requirements and consult the relevant authorities if they are unsure
about any aspects.
4.8.1 System maintenance
System Maintenance
The operation and maintenance (O&M) of a sewerage system or sewage/septage treatment plant can be
performed by the same company that constructed the system (as operator) or by a new entity that is contracted to
be responsible for system or facility operation. This will have been decided in the procurement phase. The Local
Project Office will have decided if one tender process is launched for the whole package – Construction + O&M- or
if two separate tenders are needed. In addition, WDs can be responsible of O&M.
The monitoring and evaluation (M&E) of the operation and performance of these facilities will form part of the
overall M&E program for the project. Section 4.9 provides detailed guidance on the formulation and implementation
of such M&E programs for septage management and sewerage projects
This section describes procedures for the effective maintenance of sewerage systems, and suggestions for
maintaining good septage management practices and behaviors at the local level.
Maintenance activities include:
1. Preventative maintenance. This involves routine or scheduled activities performed before the failure of a
facility or its equipment to extend equipment life, reduce overall maintenance costs, restore system
performance and increase system reliability.
2. Corrective (or reactive) maintenance. This relates to the use of an asset until it fails and then requires repair
or replacement. This approach is generally used for non-critical assets or when corrective maintenance cannot
be scheduled.
3. Emergency maintenance. This is a form of corrective maintenance that is applied to a critical asset that has
failed, resulting in a risk to human health or the environment.

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4.8.2 Process workflow and description

Figure 37: O&M Workflow Process

Maintenance Planning
Elements to consider in maintenance planning include:
 an initial operational review;
 scheduling of routine inspections;
 scheduling of routine maintenance;
 emergency maintenance procedures;
 reporting and record keeping;
 formal procedures for maintenance activities; and
 training of maintenance staff.
If a sewerage system manager does not have a formal maintenance plan in place, an operational review of the
system can be undertaken before a plan is prepared. This review can involve assessing existing facilities, operating
conditions and maintenance practices.
The system manager should have maps or a mapping system, such as a GIS, of its sewerage system. The map
should be based on work-as-executed plans, where available. It should include streets and other landmarks, so
that maintenance crews can locate elements of the system when required.
A schedule for routine inspections of the sewerage system is mandatory. Priorities should also be clearly stated.
In order to ensure that the schedule meets its goals, it needs to be periodically reviewed, and the results reviewed
by management personnel to see if any further action is necessary. Reactive inspections are necessary to
investigate the cause of any public complaints.
Routine or preventative maintenance of the system is also necessary. This is an important component of asset
management, as it reduces the rate of deterioration and costly reactive maintenance of the asset. Problems
identified during routine inspections should receive the necessary maintenance or repair actions.
Reactive or emergency maintenance occurs when a component of the system fails unexpectedly. In order to
return it to service as soon as practical, the system manager will have written procedures for reactive maintenance.
A record keeping system documenting the maintenance should be included in an Operational and Maintenance

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Plan. These records, based on inspection reports should include information on when elements of the system were
inspected and what, if any, maintenance was performed (including details of the problem, the action taken, whether
any further action is required, and the personnel involved). Significant maintenance issues should be reported to
management and, for larger systems, this information could be included in the GIS for the system.
System managers are encouraged to write policies, procedures or protocols for system operations and
maintenance, to be used for personnel training and monitoring activities. These, reviewed and revised as
necessary, will ensure consistency in maintenance activities, for cost-effectiveness and comparison purposes.
There are two main infrastructures that will be considered on the maintenance planning: the sewer and its pumping
stations.
Sewer Maintenance
Maintenance programs may include a geological stability assessment around the infrastructure, e.g. to account for
the washing away of sand lenses, which will affect structural stability. Assessments may also include sewer
corrosion, externally by aggressive groundwater and internally by sulphates producing sulphuric acid. Inspections
of sewers involves visual inspection of large diameter sewers to identify and record blockages, cracks, tree roots
and accumulated sediment.
In areas where reports of leak are unlikely to be reported by the public, e.g., bushland areas, the route of the sewer
can be walked to check for any leak. Maintenance are visually inspected for defects, possibly aided by mirrors on
an adjustable pole. The pipes from overflow structures are checked for obstructions and the performance of any
valve is also checked.
Sewer maintenance techniques include:
 root cutting using a remotely operated cutting tool inserted at maintenance holes;
 chemical cleaning to reduce root infestation;
 removal of blockages by rodding; and
 sewer flushing to remove accumulated sediment.

Maintenance of Pumping Stations

Sewage pumping station inspection and maintenance techniques include:
 inspection of telemetry and instrumentation;
 checking of valves and penstocks;
 mechanical and electrical inspection;
 pump capacity testing;
 removal of sediment/grit accumulated in wet wells; and
 cleaning of wet wells so that grease and fat build-up does not interfere with level control devices, as this can
cause pump failures and overflows.
A sewer overflow causes or has the potential to cause harm to the environment or human health. The conditions of
the receiving environment will dictate the degree of risk of such harm. The scale of the spill depends on the volume
and duration of the overflow and the receiving environment's characteristics. It can be described in the context of
the dispersion zone or attenuation distances necessary to disperse, dilute or contain a pollutant that affects the
environmental values of that zone but does not go beyond it. The effect on both surface water and groundwater
needs to be considered in the impact assessment.
4.8.3 Infrastructure rehabilitation
Sewer pipes that are broken or cracked need to be rehabilitated to minimize infiltration/inflow and leakage. The
most common techniques involve "trenchless technology", which minimizes the costs and disruption compared with
open excavation. There are two common approaches:
 grouting the sewer to fill cracks and joint defects; and

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 lining sewers with a durable waterproofing liner material or inserting a new pipe (through an approach called
pipe bursting).
In some circumstances, such as broken or collapsed sewers, open excavation and replacement may be required.
This is also often required at the junctions with property sewer/drains on lined pipes.
Defective maintenance holes can be rehabilitated by:
 spraying the inside of the maintenance hole with a non-porous material;
 installing a durable waterproofing liner or insert; or
 reconstructing part or all of the maintenance hole.
Cracked maintenance hole lids and surrounds can be replaced, and leakage from surface runoff into maintenance
holes should be prevented.
Property sewer/drains can be rehabilitated by lining or by replacement through open excavation. It should be noted
that although private sewers may contribute significantly to wet weather overflows. property sewer/drain
rehabilitation is only undertaken with the property owners' approval.
4.8.4 Maintenance of septage management at the local level
Community awareness and good practice for septage tank maintenance can be maintained through communication
campaigns with the following messages:
 Follow your maintenance plan.
 Do not let any vehicles, drive or park on any part of the disposal system.
 Do not flush paints, solvents or any kind of toxic chemicals down the toilet.
 Do not plant large trees or shrubs nearby because the roots may affect the disposal field.
 Do not allow roof or perimeter drains, or any surface water, to discharge on or near the sewage disposal
system.
 Do not overload the system with too much water. For example, a running toilet or dripping faucet, or by
watering on or near the disposal area.
 Do not flush cigarette butts, filters, sanitary napkins, newspaper, disposable diapers, condoms, tissues, paper
towels, hair, metal or metal items, coffee grounds, tea leaves, fats or grease. These can all plug a septic tank
or a drain field.
 Establish a water conservation strategy for the house.
 Do not leave the system not working for long periods.
 If water pools up on a disposal area, seek advice from your environmental health officer and authorized person.
 Do not allow large livestock to graze on the disposal field.
 All roof, cellar and footing drainage, and surface water must be excluded from the system. This drainage water
can be discharged to the ground surface without treatment; make sure it drains away from your sewage
treatment system.

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4.9 Project Monitoring and Evaluation

The last step in the overall process is Monitoring. It involves

two kinds of monitoring tasks: NSSMP Monitoring and Works
& Operations Monitoring. The first task measures the
success of the Program as a whole on a continuing basis, for
which the main objective is improved sanitation and water
quality. The second task evaluates individual projects or
related projects in a local area. It measures the success of the
implementation phase of new systems and infrastructure. In
both cases the process consists of determining the key factors
for success and identifying issues which are not allowing
objectives and targets to be reached.
The goal of the NSSMP is to improve water quality and protect
public health in urban areas of the Philippines by 2020. Its
primary focus is to encourage and support the implementation
of sewerage infrastructure and septage management projects
through public advocacy and the creation of the necessary supporting environment.
An effective monitoring and evaluation (M&E) program should be implemented as part of the NSSMP to evaluate
the performance of these projects, and identify resulting water quality improvements. This will require a number of
different types of performance and monitoring data to be collected by different stakeholders (see Figure 22 below).
It is important that the overall design of the M&E program is accomplished well before project construction,
implementation or operation. This will allow different types of baseline data to be collected, and responsibilities and
arrangements for construction and operational data collection to be negotiated and agreed. In particular,
requirements for the collection of data by private contractors should be incorporated in relevant bid documentation
and contracts, and agreements should be reached between Government agencies (national and local) on data
collection roles and responsibilities
Once a sanitation project has begun to operate, its operations and their impacts should be monitored to evaluate its
performance, i.e. its technical effectiveness, its operational and financial sustainability, and the satisfaction of those
using its services. Also, water quality in the project area should be studied to identify any positive impacts of the
project on public health and the environment.
This section of the Manual provides guidance and recommendations for monitoring and evaluating a sanitation
project's operations, performance and water quality impacts. In particular, the section describes a process for
developing a monitoring, evaluation and reporting regime, including:
Clearly stated objectives (why we are monitoring);
 Indicators and targets (what we are monitoring);
 Standards of performance or compliance (the benchmarks for the evaluation);
 The monitoring programs themselves (what, where, how, and how often); and
 The roles and responsibilities of participants (who will monitor, assess and report).
As indicated above, NSSMP monitoring and evaluation should be undertaken at two levels:
 the overall performance of the NSSMP, and the progress made towards meeting its established goals and
objectives; and
 the performance of individual projects that are implemented as a result of the NSSMP.
Figure 21 illustrates the process for overall M&E of the NSSMP. It includes sub-processes for revising both the
implementation of the NSSMP, and the NSSMP itself, as the need arises. These processes will obviously run in
parallel with the monitoring of individual projects, and continue on beyond the life of the Roll-Out Project.The key
responsibilities for NSSMP evaluation and review process are as follows

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Based on this diagram, the key responsibilities for NSSMP evaluation and review process are as follows:
 collecting performance and associated data, and analysing and reporting on the overall performance of the
NSSMP (NSSMP Office);
 assessing and reporting to the NSSMP Committee on the effectiveness of the guidance and support provided
by National Government agencies to local implementers (DILG, League of Cities, etc); and
 tracking the progress of the NSSMP, reviewing its success and effectiveness, and revising it where necessary
(DPWH and NEDA, through NSSMP Committee).
4.9.1 Process workflow and description
Figure 38: Monitoring and Evaluation of the NSSMP
DPWH convenes
NSSMP Committee
= NEDA INFRACOM
Sub-com on water resources

Inputs (from various sources)

-Objectives and targets
Analysis of monitoring
-SuSEA, existing masterplans
reports: process bottlenecks,
-Technological options
incentives, quality of products
-Environmental standards
and services provided, etc.
-Monitoring parameters
-Etc.

Subcom convenes to
review/revise NSSMP

M&E: Measuring if NSSMP is on track in

providing guidance and pushing for project No
NSSMP implementation
(current version) NSSMP Office collects information relevant to
meeting the target; NSSMP on
NEDA/DPWH tracks rate of success in getting track?
prioritized projects approved for funding
IMPLEMENTATION

DILG/leagues track effectiveness of NSSMP in Yes

providing guidance to LGUs to develop plans
and make investments

The long-term (2020) targets for the NSSMP are as follows:

Table 17: NSSMP targets

Septage Management Targets Sewerage Infrastructure Targets

 All LGUs have a septage management program  17 HUCs have sewerage systems (interceptor type) serving
serving their urban barangays 50% of urban barangays (to be done in 2 phases)
 43.6 million people have access to these programs  3.2 million people have access to this new infrastructure
 Capital costs range from PhP 4 to 63 million per  Capital costs average PhP 380 million per project per phase
project  Total capital costs of PhP 13.9 billion
 Total capital costs of PhP 12.4 billion  Pollution reduction of 64 million kg of BOD (80% of total
 Pollution reduction of 260 million kg of BOD (24% of generated)
total generated)

The broad goals of the NSSMP Roll-Out Project include:

 accelerating the achievement of the goals of the Clean Water Act;

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 demonstrating the actual application of recommended NSSMP strategies;

 generating at least three pilot cities with feasibility studies;
 effective training and capacity building for program implementers and their partners; and
 effective communications and program promotion activities.
The remainder of this Section will focus on the monitoring and evaluation of individual NSSMP projects, and
includes guidance on:
 the data and other information that should be collected (what should be monitored);
 devising and establishing the necessary monitoring programs (where, how and how often);
 setting performance targets (e.g. technical, financial and service targets);
 the roles of participating organizations in the conduct and resourcing of these monitoring programs, and
performance evaluation and reporting;
 information on relevant standards and requirements; and
 recommended reporting templates.
The following six-step approach is proposed for performance monitoring and evaluation of a single project or a
related set of projects:

1. Selection of appropriate objectively verifiable indicators (OVIs) for a project.

2. Selection of performance targets or measures of success
3. Development of a suitable project performance monitoring program.
4. Assignment of specific roles and responsibilities for monitoring, data collection and analysis, and
performance evaluation and reporting
5. Implementation of the monitoring and data collection program.
6. Performance evaluation and reporting.

This six-step approach is explained further in the following pages.

Selection of appropriate objectively verifiable indicators (OVIs) for a project.
These should be the key measures of the progress, success, effectiveness and/or efficiency of the project. In
the case of a sewerage or sanitation project, the OVIs should reflect its technical and financial performance, and
public satisfaction with the service delivered. They may be quantitative or qualitative in nature, but should be as
specific and measurable as possible.

Selection of performance targets or measures of success.

For many OVIs it is desirable to establish a performance target, i.e. a measure or value of the OVI that is
considered to reflect acceptable performance, or to indicate successful implementation in relation to that indicator.
In some cases this target will be a regulatory standard or requirement that is already established (e.g. an effluent
standard that applies to a treatment plant). Depending on the nature of the OVI, these targets should be set in
consultation between local implementers and the relevant National Government agencies (e.g. DPWH, DoH and
DENR).
Development of a suitable project performance monitoring program.
This program may include sampling, measurement, survey or other forms of data collection. In some cases
relevant data will already be collected (e.g. water quality data, or treatment plant performance data), but may need
to be supplemented. The program should address each of the selected OVIs, and should consider:
 The types and amounts of data needed for a reliable assessment of the value of each OVI;

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 The sources and location of these data (e.g. these data may come from within the project, from the
monitoring the surrounding environment, or from surveying local communities),
 The methodology, equipment and resources required to collect these data,
 The frequency and timing of data collection (e.g. to allow trends to be detected, or to address seasonal
factors), and
 Importantly, the scope and timing of a baseline survey to establish OVI benchmarks (to which project-related
data will ultimately be compared).
Assignment of specific roles and responsibilities for monitoring, data collection and analysis, and
performance evaluation and reporting.
It is important that roles and responsibilities for these tasks and functions are clearly defined and understood.
Although general roles in relation to project monitoring and evaluation are defined in the table above, each project
will have its own particular arrangements. Once a program and the roles of its participants have been defined and
agreed, it may be desirable for those involved to sign a joint Memorandum of Understanding.
Implementation of the monitoring and data collection program.
This would start with the baseline survey work, which must be completed before the project has begun to
operate. The task of data collection would include responsibility for data validation and organization, and the
conversion of raw data into results or formats that can be compared with the targets set for the OVIs.
Performance evaluation and reporting.
Local project implementers would be primarily responsible for data analysis and interpretation, evaluating
project performance, and submitting regular evaluation reports to the NSSMP Project Office. Where local
implementers and National Government agencies are both involved in data collection (e.g. customer surveys and
water quality testing), or where local authorities needs some help with data interpretation, national agencies should
assist them with the evaluation and reporting process.
The main parameters for water quality monitoring are biological oxygen demand (BOD), dissolved oxygen (DO),
total suspended solids, and plant nutrients (phosphorus and sulphur compounds). These reflect the key
constituents of sewage, namely organic materials, suspended impurities, and soaps and detergents. The key
parameter is BOD, a measure of the amount of oxygen required for decomposition of the organic matter. The more
organic material there is, the higher the BOD level, and the lower the DO in the receiving waters.
The following table should be used as the basis of the monitoring program established for a project.

Table 18: Performance Monitoring and Evaluation Program

Objectively Performa Data Data Baseline Responsible for Responsible for

Verifiable nce target source collection value(s) data collection & evaluation &
Indicator (s) methodology analysis reporting

Objectively Verifiable Indicators

The choice of OVIs is obviously a very important part of the monitoring and evaluation process. These indicators
ought to be chosen on the basis that they link closely with the overall objectives and goals of the NSSMP, and give
a clear indication of how the project is progressing towards achieving a high level of operational
performance and service delivery.
For a typical sewerage infrastructure or septage management project, the OVIs will fall into three categories:
 indicators of the operational performance of the project
 public health and environmental quality indicators
 indicators of the behavior and satisfaction in the local community served by the project.

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Each category has several OVIs which measure different aspects of performance that, together, should help
provide a comprehensive picture of sanitation conditions. Example OVIs for each category of indicator are
presented below.

Indicators of the operational performance of the project

Number/percentage of households in a HUC connected to sewerage infrastructure
These are households with an operating sewerage connection. WDs or sewerage system operators should be requested to
provide data to the LGU, probably on a quarterly basis.

Number/percentage of households with access to septage collection services

These are households with a septic tank which also have access to a desludging service. Data on access to these services can
be derived by LGUs or WDs from the local septage management plan and projected coverage of tank desludging.

Engineering indicators of treatment plant performance

Data for this indicator should be collected monthly by the LGU or WD from the treatment plant operator. Engineering indicators
may include things such as volume of wastewater actually treated, utilization of treatment capacity, treatment efficiency,
incidences of plant breakdown, etc.

Indicators of the financial performance of the project

The overall financial performance and sustainability of the project can be derived from a consideration of wastewater collection
costs, O&M costs, revenue from fee collections, etc. These data can be collected from the treatment plant operator.

Public health and environmental quality indicators

Compliance (or otherwise) of local water quality with DENR water quality guidelines (for relevant parameters such as
BOD)
This can be determined from the results of regular (usually monthly) monitoring of water quality in local water bodies (by
LGUs/WDs and/or DENR/EMB), with reference to established water quality guidelines. As with drinking water, the availability of
useful baseline water quality data is very important. Of course, an individual sewerage or septage management project will only
be able to address a part of the water pollution problem in the project area.

Incidence of water-related illness and disease in the project area

This is the number of cases of water-related diarrhea reported at barangay level, and consolidated by the local health authority.

Compliance with DoH guidelines and local ordinances

Septage tank dislodging and septage treatment require the service provider to obtain an Environmental Sanitation Clearance
from DoH and a sanitary permit from the LGU. Service providers must also comply with the DoH Operations Manual on Septage
Management and the provisions of local ordinances.

Compliance with DENR effluent standards and permitting requirements

This can be determined from the effluent testing data submitted by treatment plant operators to DENR/EMB on a quarterly
basis. Treatment plant operators are also required to obtain Environmental Clearance Certificates and comply with the
conditions of wastewater discharge Permits issued by EMB or LLDA.

Estimated reduction in BOD and Coliforms discharged to local water bodies

Local implementers should work with DENR/EMB to develop a methodology for estimating overall BOD and Coliforms
reductions, based on the volume of tank desludging work conducted, progress with the building of sewerage infrastructure, and
the performance of operational sewerage and septage treatment plants.

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Indicators of the behavior and satisfaction in the local community served by the project
Number/percentage of households actually utilizing some form of sanitation service
Utilization is usually defined as tank desludging at least every five years. Detailed operational data should be collected monthly
by LGUs from desludging service providers. This indicator is closely related to treatment plant utilization under Indicator 1.5
above.

Level of customer satisfaction with the sanitation project (e.g. septage collection service)
This can be established by conducting surveys at LGU and barangay levels in the coverage areas. The intensity’ seriousness of
user satisfaction or dissatisfaction should be identified.

Number of complaints registered with the service provider

This is a measure of the quality and reliability of the service or system provided, and the extent of annoyance/
nuisance/inconvenience caused by system failures or shortcomings.

Number of customers who have discontinued service

This is a measure of system/service users’ response to dissatisfaction or annoyance.

Percentage of eligible households that paying the relevant service fee

This indicator can be derived from water bills (where it is expected that fees would be charged) and fee collection data from
local water service providers. An alternative indicator could be the percentage of expected/projected fees that are actually
collected.

Performance Targets
While OVIs may be used to indicate the performance, progress, results and impacts of a project, they cannot by
themselves indicate whether that performance and those outcomes are acceptable, comply with external
requirements, or meet project expectations.
Therefore, targets should be set to express what is expected or required of a project (e.g. to comply with
regulations or standards), and whether its progress, accomplishments and results are acceptable. These targets
can then be compared with the values of the OVIs obtained or derived in the monitoring process.
For the sewerage and septage management projects to be conducted under the NSSMP, the following guidance is
provided on the setting of targets for the OVIs.
Numerical performance targets
Numerical targets should be set for the extent of system coverage or penetration that is achieved over time, as a
project or series of projects is progressively implemented towards reaching its maximum capacity.
OVIs 1.1, 1.2 and 1.3 require targets of this type relating to the number or percentage of households with access to
basic sanitation, septage collection services and new sewerage infrastructure. Targets should also be set for the
number/percentage of households that actually avail themselves of desludging services (OVI 3.1), and the
percentage of households that actually pay the service fees (OVI 3.3). These targets should be derivable from
historical survey data, local sanitation plans and project briefs.
A numerical target should also be set for the expected progressive reductions in BOD and Coliforms discharges to
the surrounding water environment through the implementation of a project or projects (OVI 2.6). Setting this type
of target is a relatively complex exercise that will require specialist input from water quality specialists (e.g.
DENR/EMB personnel). However, it is considered important that the projects have a target that is directly related to
pollution reduction, as improved water quality is a primary objective of the NSSMP.
Technical and financial targets
The targets for OVIs 1.4 and 1.5 (engineering indicators and financial performance indicators) can be drawn from
the project design and feasibility studies, and its performance specifications.

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Regulatory compliance targets

The targets for OVI 2.1 will be based on the Philippine National Standards for Drinking Water, although compliance
with these standards in a particular area may need to accomplished progressively over time.
A target of full (100%) compliance with DoH and DENR requirements should be set for OVIs 2.3 and 2.4. Instances
of non-compliance with either administrative (e.g. permit, clearance) or technical (septage handling, effluent
standards) requirements should be referred immediately to DoH and DENR for appropriate enforcement action.
Water quality guidelines have been established for various types and classifications of water bodies under the
Clean Water Act. In many cases, compliance with these guidelines (OVI 2.5) will be a long-term goal that cannot be
achieved solely through the implementation of projects under the NSSMP. Local implementers should consult
DENR/EMB about whether it is necessary to establish some kind of target for this OVI (e.g. a compliance
timeframe or progressively tighter targets).
Qualitative measures of effectiveness
The DoH should set progressively reducing targets for the number of reported incidences of water-related illnesses
(OVI 2.2), based on historical data and realistic expectations.
Targets should also be set for the desired levels of customer satisfaction with sewerage projects and desludging
services (OVI 3.2), which could then be established through periodic user surveys. The PAWS and PASS
programs of MWSS in Metro Manila provide examples of these kinds of assessments, which could assist local
implementers to set appropriate targets.

Performance Evaluation and Reporting

The objective in collecting data on a project's performance, progress and compliance is to ensure that it is
operationally and financially self-sustaining, that it is making satisfactory progress towards meeting external
objectives (e.g. health and environmental goals), and that its customers are receiving an appropriate quality of
service.
The evaluation of these data should include:
 A comparison of actual performance or outcome (as indicated by the OVI data) with project goals and
expectations (as reflected in the performance targets)
 The assignment of a performance rating for each OVI, and an overall project rating
 An analysis of any identifiable issues or factors adversely affecting project performance or service delivery, or
reasons for the non-attainment of targets
 A highlighting of any positive lessons learned from the evaluation, such as any good practices or successful
experiences that could be shared with other project implementers.
The generalized framework provided below is proposed for inclusion in the M&E Report to DPWH/NSSMP Office.
This systematic recording of the results of the evaluation process should be supplemented in the Report with
explanatory material that:
 provides an overall evaluation of the project, facility, system or service that is being monitored, and more
specifically -
o the report should be structured so that it addresses each of the OVIs and targets in turn
o summaries of the results of monitoring programs, surveys and other data collection activities should be
provided
o the report should deal (where applicable) with operational aspects, project/facility/system performance, and
observable impacts of the project on health, the environment and community satisfaction/behavior
 identifies and discusses issues and concerns with the implementation of the project, facility or service
o this should include (i) an analysis of the reasons or causes of failure to meet targets, inadequate
performance, regulatory non-compliance, adverse external impacts, etc and (ii) an explanation of actions or
measures that have been, or should be, taken to remedy or rectify these problems

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 highlights positive observations and lessons learned from the monitoring program, e.g. practices, measures
and approaches that have been successful or effective, which can be shared with other project implementers
and stakeholders and/or used for future reference.
Each project or service will require an M&E Report that is tailored to the particular concerns that are reflected in the
selection of its OVIs, and structured accordingly.

Table 19: Performance Monitoring, Evaluation and Reporting Framework

Objectively Performance Measured Performance Performance Reason(s) for Proposed

verifiable target(s) value(s) of OVI evaluation rating unsatisfactory remedial
indicator (current period) performance measures

For some OVIs it will be possible to indicate in quantitative terms the level of performance, degree of satisfaction of
a target, or extent of compliance, e.g. a shortfall in fee collections, a reduced number of households provided with
desludging services, instances of effluent standards being exceeded, or an increase in operating costs.
In other cases a qualitative rating system may be employed, in which the project's performance and
accomplishments can be rated as:
 Fully satisfactory, acceptable or totally compliant;
 Partially satisfactory, acceptable or compliant, with some indication of the seriousness of the shortfall in
performance; or
 Unsatisfactory, unacceptable or non-compliant.
These ratings may need to be qualified by the text in the evaluation report, including the reported reasons for any
unsatisfactory performance or non-compliance.

Table 20: Performance Monitoring and Evaluation Program

Objectively verifiable Perf. Data sources Data collection Baseline Responsible for Responsible for
indicator target(s) methodology/ value(s) data collection & evaluation &
frequency analysis reporting

Operational performance indicators

Number of HUC (no.) WD Analysis of historical (no.) in WD/LGU LGU
households connected to Sewerage system and plant operational baseline
sewerage infrastructure operator data year (2013)
Annually
Percentage of (no.) % WD Analysis of historical (no.) % in WD/LGU LGU
households in HUC Sewerage system and plant operational
connected to sewerage operator data
infrastructure Annually
Number of households (no.) WD Analysis of service (no.) in WD/LGU LGU
with access to septage Septage system coverage 2013
collection services operator(s) Annually
Percentage of (no.) % WD Analysis of service (no.) % in WD/LGU LGU
households with access Septage system coverage 2013
to septage collection operator(s) Annually
services
Volume of wastewater (no.) ML Sewerage and Analysis of plant (no.) ML in WD/LGU LGU/WD
treated septage system operational data 2013
operator(s) Quarterly
Treatment plant capacity (no.) % Sewerage and Analysis of plant (no.) % in WD/LGU LGU/WD
utilization septage system operational data 2013
operator(s) Quarterly

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Objectively verifiable Perf. Data sources Data collection Baseline Responsible for Responsible for
indicator target(s) methodology/ value(s) data collection & evaluation &
frequency analysis reporting

Revenue from (no.) PhP WD Data from water bill (no.) PhP in WD LGU
sewerage/septage payment system 2013
system fee collections Quarterly
O&M costs for sanitation (no.) PhP Sewerage and Data from septage (no.) PhP in WD/LGU LGU
system(s) septage system operator(s) 2013
operator(s) Analysis of plant
operational data
Quarterly
Public health and environmental quality indicators
Compliance (or Yes DENR-EMB Water sampling and DENR-EMB LGU/DENR
otherwise) of local water LDWQMC analysis for key LGU
quality with DENR water indicators
quality guidelines Monthly
Incidence of water- (no.) % Health care clinics/ From local data or (no.) in DoH/LGU LGU/DoH
related illness and reduction in facilities surveys on reported 2013
disease in the project reported DoH-Regional Office illinesses
area cases Quarterly
Compliance with DoH Yes DoH-Regional Office From DoH and LGU DoH/LGU LGU/DoH
guidelines and local LGU field monitoring of
ordinances contractors
Quarterly
Compliance with DENR Yes Sewerage and Self-Monitoring Sewerage and LGU/DENR
effluent standards and septage system Reports septage system
permitting requirements operator(s) Quarterly operator(s)
DENR-EMB
Estimated reduction in (no.) Sewerage and Analysis of plant (no.) Sewerage and LGU/DENR
BOD discharged to local tonnes/yr septage system operational data tonnes/yr in septage system
water bodies operator(s) Self-Monitoring 2013 operator(s)
Reports DENR-EMB
Annually

Indicators of behavior/satisfaction of local community

Number of households (no.) Households Local surveys of (no.) in LGU/barangays LGU

utilizing some form of household behavior 2013
sanitation service Annually
Percentage of (no.) % Households Local surveys of (no.) % in LGU/barangays LGU
households utilizing household behavior 2013
some form of sanitation Annually
service
Level of customer (no.) % Households Local surveys of user (no.) in LGU LGU
satisfaction with the satisfaction 2013
sanitation project Annually
Number of complaints (no.) % Sewerage and Monthly (no.) % in WD LGU/WD
registered with the reduction in septage system 2013
service provider complaints operator(s)
Number of customers (no.) WD Annually (no.) % in WD LGU/WD
who have discontinued Sewerage and 2013
service septage system
operator(s)
Percentage of eligible (no.) % WD Quarterly (no.) % in WD LGU/WD
households paying their 2013
relevant service fee

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4.9.2 Supporting information

The NSSMP Office in DPWH and the local/regional offices of DoH and DENR/EMB will be important sources of
information and advice on the development of a monitoring and evaluation program. Also, MWSS can be consulted
about surveying customer satisfaction in relation to sanitation services.
Key DoH guidance materials include:
 the Guidebook for Monitoring and Evaluation (part of DoH's Sustainable Sanitation Knowledge Series); and
 the DoH Operations Manual on Septage Management; and
 the Philippine National Standards for Drinking Water.
DENR requirements of relevance to this work include:
 the Implementing Rules and Regulations of the Clean Water Act (RA 9275), including its permitting and
standard setting provisions (Rules 13 and 19);
 national water quality guidelines (in DENR Administrative Order 34); and
 industrial effluent standards (in DAO 35).
Project implementers should also familiarize themselves with NEDA's reporting requirements for the monitoring of
the NSSMP.
4.9.3 Training requirements
The table below summarises the skills required of the staff employed at the key organizations responsible for
NSSMP Operations Monitoring.
Organization Unit Knowledge and Skills Required
DPWH NSSMP Project Office  understanding of water pollution and domestic wastewater issues
 knowledge of DoH and DENR permitting/clearance/enforcement practices
 analysis of performance data and M&E reports
LGUs Project Office  understanding of water pollution and domestic wastewater issues
Municipal Planning &
Development Office
 appreciation of DoH and DENR water quality standards
Local Health Office &  knowledge of DoH and DENR permitting/clearance/enforcement practices
LDWQMCs  septic tank design, installation and desludging
 septage management system planning
 design and conduct of household surveys
 collection of data from barangays regarding ODF status
 collection/analysis of performance data (e.g. technical and financial)
 preparation of performance monitoring and evaluation reports
 monitoring of desludging activities and waste treatment facilities
 monitoring of incidences of water-related disease
WDs All  understanding of water pollution and domestic wastewater issues
 appreciation of DoH and DENR water quality standards
 knowledge of DoH and DENR permitting/clearance/enforcement practices
 septic tank design, installation and desludging
 collection/analysis of performance data (e.g. technical and financial)
 preparation of performance monitoring and evaluation reports
 monitoring of desludging activities and waste treatment facilities
DoH DoH Regional Office  monitoring of drinking water quality
 monitoring and analysis of data on incidences of water-related disease
DENR EMB Regional Office and/or  monitoring of drinking water quality
WQMAs  monitoring and analysis of data on incidences of water-related disease

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5 Part C: Budgeting
5.1 Local Budgeting

After the inclusion of the sewerage or septage project in the Local Sanitation Plan and the formulation of the
project’s feasibility study, the next crucial stage is the provision of the LGU budget for the project. This can be in
the form of: a) providing an annual allocation from the local budget for the capital investment; b) allocating a
certain amount annually for the project’s loan repayments; and c) a combination of a) and b). In any case, the
budgetary allocation for the sewerage project and all the other infrastructure projects should not go beyond the
20% Development Fund5 of the HUC for a particular year.
This chapter focuses on the local budgeting process and, in particular, how the budget for the proposed project is
allocated and approved, and which institutions/ persons are involved in the LGU budgetary process.
The national budget process is also included as Annex National Budget Process since LGUs and/or Water Districts
generally would not be able to finance these projects on their own. The NSSMP was conceived in order that the
National Government would support the implementation of sewerage projects by providing a 40% cost share,
particularly for the 17 HUCs. LGUs and Water Districts are expected to provide the remaining 60% of the total
project cost. This cost sharing will be in place for a limited period of ten years to encourage investments in a timely
manner.
5.1.1 Participating Agencies
Table 21: Local Budget Process

Action Action Description Institutions/ Persons Timeframe

Responsible
Budget Preparation of Statement of Income City Treasurer On or before July 15
preparation and Expenditures
Preparation of income projections, tax/ Local Finance July to October
revenue measures, annual Committee
expenditures, and ceilings of spending
Preparation of budget proposals Heads of departments July to October
and offices
Preparation of executive budget for LCE July to October
ensuing year
Budget Submission of executive budget to LCE Not later than October 16
authorization Sanggunian
Budget legislation Sanggunian November
Review of appropriation ordinance DBM November
Budget Implementation of the budget to LGU January to December
execution achieve LGU goals and objectives (ensuing year)
Budget Recording and reporting of incomes LGU January to December
accountability and expenditures (ensuing year)
Monitoring and evaluation of financial DBM, COA January to December
performance (ensuing year)

5
Section 287 of the Local Government Code of 1991 specifies that each LGU shall appropriate in its annual budget no less than
20% of its annual internal revenue allotment for development projects, including infrastructure projects.

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5.1.2 Process Workflow and Description

Figure 39: Process Workflow for Local Budgeting

City Treasurer (CT), Local Finance

Committee (LFC), and Heads of City Mayor Sanggunian DBM and COA
departments (HDs)

CT prepares and submits

Statement of Income and
Expenditures

LFC prepares and submits income

Prepares
projections, tax/ revenue
executive 1. BUDGET
measures or borrowings, annual PREPARATION
budget for the
expenditures and ceilings of
ensuing year
spendings

HDs prepare and submit budget

proposals

Evaluates the
DBM reviews the
Submits proposed proposed budget 2. BUDGET
appropriation
budget to and enacts the AUTHORIZATION
ordinance of the
Sanggunian Appropriation
HUC
Ordinance

Receives the approved/

authorized budget per 3. BUDGET
CT disburses funds EXECUTION
appropriation
ordinance

CT submits written Receives/ signs COA audits the city's

financial report to City financial report and finances and 4. BUDGET
officials and general prepares publishes audit ACCOUNTABILITY
public performance report reports

Local budgeting involves four phases: budget preparation, budget authorization, budget execution, and budget
accountability. Presented below is a description of each phase:

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Budget Preparation.
This phase involves the formulation of the estimates of income and a budget proposal to be submitted by the
City Mayor to the Sanggunian for deliberation and approval. The preparation phase consists of three major
activities.
1. On or before July 15th of each year, the City Treasurer is required to submit to the City Mayor a certified
statement containing the following:
 Actual income and expenditures during the immediately preceding year;
 Actual income and expenditures of the first two quarters of the current fiscal year; and
 Estimated income and expenditures for the last two quarters of the current fiscal year.
2. A Local Finance Committee, composed of the City Planning and Development Officer, City Budget
Officer and the City Treasurer, is convened. The Committee is tasked to deliberate and submit to the City
Mayor the following:
 Estimation of a reasonable income projection for the ensuing year;
 Recommendations on the appropriate tax and revenue measures or borrowing appropriate to support the
budget;
 Recommendations on the level of annual expenditures and the ceilings of spending for economic, social
and general services based on the LGU’s approved local development plan; and
 Recommendations on the amount to be allocated for capital outlay under each development activity or
infrastructure project.
3. Heads of the city’s departments and offices prepare and submit budget proposals for the ensuing year to
the City Mayor. It is at this stage that the office charged with leading the proposed sewerage project (probably
the City Planning and Development Office or the City Engineer’s Office) submits the proposed budget for the
project for the ensuing year.
Based on these submissions, the City Mayor prepares and submits the executive budget for the ensuing year to
the Local Legislative Council (Sanggunian) not later than October 16th of the current year. The Local Government
Code (LGC) requires the Local Chief Executive (LCE) or the City Mayor to submit the budget on the date
prescribed or he/she shall be subject to such criminal and administrative penalties as provided for under the LGC
and other applicable laws.

Budget Authorization.
The budget authorization phase starts when the City Mayor submits the proposed budget to the Sanggunian for
legislative deliberation. The Sanggunian is tasked to enact, through an appropriation ordinance, the annual budget
of the LGU for the ensuing fiscal year before the end of the current year. Ideally, the Sanggunian should study,
scrutinize and deliberate the estimated income and proposed budget. Legislative approval is important
because it is the Sanggunian that has the power to appropriate the budget. Appropriation refers to an authorization
made by ordinance, directing the payment of goods and services from local government funds under specified
conditions or for specific purposes.
Once the budget is passed by the Sanggunian, the Appropriations Ordinance is subject to review by the
Department of Budget and Management (DBM). The DBM reviews the appropriation ordinance of provinces,
HUCs, independent component cities, and municipalities within Metro Manila. For component cities and
municipalities, the Sangguniang Panlalawigan (provincial council) is tasked to review the appropriation ordinance.
The review process ensures that the budgets prepared and approved by the LGUs and within the budgetary
requirements and general limitations prescribed in the LGC.

Budget Execution.
This phase involves the release of funds appropriated for the performance of functions and for the implementation
of projects and activities. The LCE releases the allotments to the departments and offices of the LGU.

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Budget execution also involves the activities related to the actual disbursement of funds to be used for pre-
identified programs, projects, and activities contained in the approved budget. It involves the exercise of the LCE of
mechanisms to program and control cash disbursements. An important mechanism for control is the power to issue
allotments by the LCE. Allotments are essentially authorizations to departments/offices to incur obligations of
specific amounts to be paid out of local government funds.

Budget Accountability.
This involves the accurate recording and reporting of the LGU’s income and expenditures and the evaluation of the
LGU’s physical and financial performance. The fundamental principle on accountability affirms that fiscal
responsibility must be shared by all those exercising authority over financial transactions and operations of the
LGU.
The Commission on Audit (COA) has promulgated accounting rules and guidelines for LGUs under the New
Government Accounting System. It contains detailed guidelines for LGUs in accounting for all incomes,
disbursements and budgetary accounts. It also specifies in detail a financial reporting system that requires, among
others, the preparation of year-end financial statements such as balance sheet, statement of income and
expenses, and statement of cash flows. The COA also conducts audits of LGU finances and publishes the LGU
audit reports on its website.
A typical sewerage/septage project would require a multi-year budget. The initial annual budgetary estimates can
be gleaned from the local sanitation plan or the 3-year infrastructure program of the LCE. However, the budget for
the project has to be updated annually during the budget preparation phase to reflect the more accurate cost
estimates during project implementation.
For more information on the national budget process see Appendix 8.26. The significance of the national budget
process is in the submission by the LGU of the budget request to DPWH for the 40% national government share,
as discussed in Section 5.1.
5.1.3 Supporting Information
See the Department of Budget and Management website (http://www.dbm.gov.ph).
Padilla, A. 2010. Understanding Income and Expenditures of Local Government Units.
(http://www.transparencyreporting.net)

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5.2 National Budgeting

Table 22: National Budget Process

Action Action Description Institutions Responsible Timeframe (for 2013

budget)
Budget Setting of overall budget policy DBCC March-April 2012
preparation
Agency-level budget formulation Agencies Issuance of Budget Call (April
2012)
Executive review, deliberation & approval DBM, OP May 2012
Budget document preparation & submission DBM, OP Submission of President’s
to Congress budget 1 day after SONA
(July 2012)
Budget Congress deliberations House of Representatives, August-October 2012
legislation Senate

Ratification & enrolment House of Representatives, Approval at the House of

Senate Representatives (October
2012), and Senate
(November 2012 )
President’s enactment & veto DBM, OP December 2012
Budget execution Appropriations DBM
Allotment DBM
Obligations Agencies
Disbursements Agencies April 2013
Budget Performance targets & outcomes Agencies
accountability
Budget accountability reports Agencies
Quarterly agency performance review DBM
Year-end budget performance assessment COA, DBM December 2013
review

The national budget process consists of four phases, namely: (i) budget preparation (or formulation); (ii) budget
legislation (or authorization); (iii) budget execution (or implementation); and (iv) budget accountability. During
the preparation phase, the Executive Branch prepares the National Budget. In the legislation phase, Congress
authorizes the General Appropriations Act. This is followed by the execution phase wherein agencies utilize their
approved budgets. During the accountability phase, the Executive monitors and evaluates the use of the budget
5.2.1 Budget Preparation
This phase involves the formulation and consolidation of the national budget which will eventually be proposed by
the President for approval by Congress. The preparation of the annual budget for a particular year is done in the
preceding year.
The major activities in this phase consist of:
a) Setting of overall budget policy
b) Agency-level budget formulation
c) Executive review, deliberation and approval
d) Preparation of budget documents and submission to Congress.

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The Constitution provides that the President “submits to Congress within 30 days from the opening of every regular
session, as the basis of the general appropriations bill (GAB), a budget of expenditures and sources of financing
including receipts from existing and proposed revenue measures”.

Figure 40: National Budget Process Workflow

5.2.2 Budget Legislation

Upon transmittal by the President of the proposed budget to Congress, budget legislation commences. Congress
plays a central role in this phase which involves the process of securing an appropriation for the budget being
implemented. An appropriation is essentially an authorization made by law or other legislative enactment, directing
payment out of government funds under specified conditions for specified purposes.
The General Appropriations Bill (GAB) goes through roughly the same legislative process as the passage of any
other bills. The GAB undergoes three reading first at the House of Representatives before transmission to the
Senate. Committee-level deliberations are conducted through public hearings at the Committee of Appropriations
at the House of Representatives and the Committee on Finance at the Senate.
In the course of Congressional deliberations and approval, legislators can make changes in the allocation of the
budget for the various expenditure items. However, this prerogative is not unrestricted.
The Constitution provides limits to this prerogative of Congress. Among the restrictions are:
 Congress may not increase the appropriations recommended by the President. This implies that any budget
items which Congress wants to increase would have to be accompanied by concomitant cuts in other items.
 The budget of the Judiciary, which enjoys fiscal autonomy, may not be reduced to a level below the amount
appropriated for the previous year.
 Education shall be assigned the highest budgetary priority.

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Bicameral Conference Committee. After deliberations in both Houses of Congress, the two chambers form a
Bicameral Conference Committee which is tasked to discuss and harmonize conflicting provisions of the House
and Senate versions of the GAB. A Harmonized Version of the GAB is then produced. Once submitted to the
President for his approval, the GAB is considered enrolled.
President’s Enactment and Veto. The budget bill (GAB) is sent to the President for signature for it to become the
General Appropriations Act (GAA). The President is given thirty (30) days to review and sign the appropriations bill
into law. If the President fails to take action after the said period, the appropriations bill is deemed approved and
enacted.
The President can sign the bill as is or can exercise veto power before signing. Line-item veto power is granted to
the President which allows him/her to strike out specific budget items or special provisions in the budget bill and
thus approve all other items which he/she does not object to. When veto power is exercised, a President’s Veto
Message is issued wherein budget items subjected to direct veto or conditional implementation are identified, and
where general observations are made.
When the GAA is not signed before the start of the fiscal year, the previous year’s GAA is automatically re-enacted
until a GAA is signed for the new year. Re-enacted budgets means that the agency budgets for programs, activities
and projects remain the same while funding for programs or projects that have already been terminated is
realigned for other expenditures.
5.2.3 Budget execution
The GAA serves as the legal basis which allows for the use of funds from the national treasury for specified
expenditure items provided therein. However, the existence of a GAA alone does not imply that agencies can start
utilizing and drawing funds to finance their programs and activities. Agencies need to secure an allotment to be
able to obligate amounts specified in their budgets; cash allocation should be secured before disbursements can
be made to settle these obligations. The budget execution phase is concerned with these operational aspects of
budgeting which facilitates the translation of appropriations to disbursements, or more specifically the release of
funds through allotments and Notice of Cash Allocation (NCA).

Allotments. The DBM issues an allotment to implementing agencies which authorizes them to incur obligations for
specified amounts contained in the legislative appropriation, e.g. GAA. The DBM requires agencies to submit
documents it would review and would be part of the basis for releasing allotments. These requirements include the
Agency Budget Matrix, and work and financial plans as contained in the Budget Execution Documents (BEDs).
Not all of the amounts appropriated to agencies are included in one allotment. Allotment releases are spread out
throughout the year and are issued based on the cash requirements of agencies and the availability of funds in the
national treasury. Succeeding release of allotments necessitates continuous performance review of agencies by
the DBM and the submission of periodic Budget Accountability Reports (BARs).
Obligations and Disbursements. Obligations are liabilities legally incurred and committed to be paid for by the
government immediately or in the future. Examples of obligations incurred are salaries due to agency employees or
when the agency enters into contracts for the purchase of goods or services. Allotments issued to agencies
essentially sets the ceiling of how much the agency can obligate.
Disbursements, on the other hand, refer to the actual withdrawal of cash from the National Treasury due to the
encashment of checks issued by the agencies as payment for obligations. Agencies are issued the NCA which
specifies the amounts that can be withdrawn out of the allotments released for to the same.
The head of agency and the financial officers have the responsibility of ensuring that obligations incurred and the
disbursement of cash satisfy legal requirements as prescribed in pertinent budgeting, procurement and accounting
laws, rules and regulations.

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5.2.4 Budget accountability

Performance and Target Outcomes. Government agencies are held accountable not only for using public funds
ethically, but also on how agencies attain performance targets and outcomes using available resources. These
performance measures are set alongside the preparation of the national budget; and these are indicated in the
Organization Performance Indicator Framework (OPIF) Book of Outputs. Performance targets are firmed up during
the preparation of Budget Execution Documents (BEDs).
Budget Accountability Reports. BARs show how agencies used their funds and identify their corresponding
physical accomplishments, including:
 quarterly physical and financial reports of operations
 quarterly income reports
 monthly statement of allotments, obligations and balances
 monthly report of disbursements.
Review of Agency Performance. The DBM regularly reviews the financial and physical performance of agencies.
Actual utilization of funds and physical accomplishments are evaluated against their targets as identified in the
OPIF and in the BEDs. Agency Performance Reviews are conducted quarterly or every semester. Meanwhile, an
annual Budget Performance Assessment Review determines the agency’s accomplishments and performance.
Audit. The Commission of Audit (COA) and the DBM ensure that government agencies comply with the New
Government Accounting System (NGAS) and that these agencies are subjected to audit. The DBM uses COA’s
audit reports to confirm agency performance, determine budgetary levels for agencies, and address issues in fund
usage.

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6 Part D: Financing
6.1 Project Financing

This section covers the financial and procurement procedures and regulations associated with administering the
program fund. This includes the procedures involved in obtaining financing for the proposed sewerage/septage
project that starts with the identification of financing requirements, followed by the process of securing equity and
loan financing and, finally, the implementation of cost recovery mechanisms.
Guidelines on procurement planning to identify the sequence of contractual inputs are articulated in a draft
procurement plan template. This includes defining roles and responsibilities in the procurement cycle, and
specifications and bid documents for specific facility projects. The procurement procedures are in conformity with
the GOP guidelines and typical donor requirements.
Sewerage projects require huge capital investments and LGUs cannot implement them on their own. As such, the
National Government through the NSSMP will provide financial support up to 40% of the total project cost. This
chapter of the Manual will provide the LGUs and WDs with options for financing sewerage projects.
The objectives of the Financing Module are as follows:
 to define the steps in financing sewerage projects to be implemented by LGUs and WDs; and
 to describe how LGUs can access the national government cost share through DPWH.
Three (3) major steps are involved in the financing of sewerage projects:
a) identifying financing needs
b) securing finance
c) implement cost recovery mechanisms.

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6.1.1 Process workflow and description

Figure 41: Financing Process Workflow

Determine the project's financial

feasibility
1. IDENTIFY
FINANCING NEEDS
Determine financing requirements and prepare
project brief

Develop partnerships to help meet

financing needs

Can private sector

Submit project brief
participate?
Yes

No

2. SECURE
Submit budget request to secure LGU FINANCING
counterpart financing

PPP process

Submit project brief to GFIs/commercial

banks to secure loans

Submit budget request to NSSMP to

secure NG share

Project development and 3. IMPLEMENT COST

implementation
RECOVERY
MECHANISMS

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Identifying financing needs

Determine the project’s financial feasibility
The first step involves the determination of the project’s financial feasibility and its financing requirements.
Initially, the NSSMP financial toolkit described in Section 4.4. (Project Feasibility) can be used to conduct a
preliminary assessment of financial feasibility in which the financial spreadsheet is used to calculate the financial
data, including the project’s Internal Rate of Return (IRR) and the Net Present Value (NPV), to prove that the
project is financially viable. The NSSMP Local Project Office, through the Economic/ Financial Specialist, should be
able to undertake this preliminary financial assessment.
Determine the financing requirements
The project’s financing requirements can be determined through the use of the financial toolkit. The appropriate
financing mix (equity and loan financing) can be established. The financing mix should result in financial indicators
that will show the project’s financial viability, e.g., the project’s Internal Rate of Return (IRR) greater than the
Weighted Average Cost of Capital (WACC).
In case a full-blown feasibility study of the proposed sewerage project is already available, the Local Project Office
can validate the results of the feasibility study and recommend the appropriate equity and loan financing mix. The
financial model used in the feasibility study has to be examined, and the assumptions and the resulting financial
indicators validated.
Prepare project brief
After determining the financing requirements, the Local Project Office should prepare a project brief. A project brief
is a standard way of communicating project details with stakeholders, elected officials and potential funders. It is
more detailed than the project concept note and has more in-depth discussion about the project goals, components
and budgetary requirements. It is generally a three to five page document (plus attachments) that summarizes the
proponent information, project objectives, major features of the project, project beneficiaries, and the anticipated
project budget. A standard format ought to be used as this makes it easier for reviewers and evaluators to quickly
identify the main features of the project. A suggested outline of the project brief is shown in the Project Concept
Note in Section 8.3.1.
The project brief should be submitted and presented to the following:
 LGU officials/ Local Sanggunian – to secure approval of the LGU counterpart financing
 Government financial institutions (GFIs) and commercial banks – to obtain loans from these institutions
 NSSMP Project Office – to secure approval of the NG share for the project
 Private sector investors and Water Districts – to convince and invite them as potential partners in implementing
the sewerage project.

Secure financing
Develop partnerships to help meet financing needs
LGUs are expected to spearhead the implementation of sewerage projects in highly urbanized cities (HUCs).
However, since water supply and sanitation services in most of these LGUs are managed by Water Districts (WDs),
it is important that the LGU and the WD establish a partnership in order to successfully finance, construct, and
operate the sewerage system. An example of an arrangement is that the LGU will acquire the land for the
sewerage treatment plant, pass the local sewerage/septage ordinance, and secure the NG financing share for the
project, while the WD will manage the construction, operation, and maintenance of the sewerage system.
To formalize their partnership in implementing the sewerage or septage project, the LGU and the WD may enter
into a Memorandum of Understanding (MoU) that defines, among other things, the responsibilities of each
party, cost and risk sharing arrangements, revenue allocation, and other relevant provisions.
The LGU and the WD may also establish partnerships with private sector investors. These can be in the form
of a concession agreement, management contract, joint venture agreement or any other BOT scheme that would
be suitable and acceptable to the parties involved. The PPP scheme for LGU sewerage projects is described in
more detail in Section 6.2.

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It has to be noted that even if the PPP scheme is selected, the LGU may still avail of the NG cost share but the
level of NG subsidy may be lower depending upon the requirements to make the project financial feasible. In effect,
the NG subsidy will be in the form of a viability gap fund (VGF).
Submit budget request
With the project concept and feasibility study in place, the proposed sewerage investment should be considered as
a priority project of the LGU. Hence, the City Planning and Development Office (CPDO) or the City Engineer’s
Office will include the sewerage project in the Local Expenditure Program which the Local Chief Executive
(LCE) will consolidate and submit to the Local Sanggunian for approval. The local budgeting process is
discussed in Part 5.
Submit project brief to GFIs/commercial banks to secure loans
In most cases, the LGU and the WD are unable to provide equity financing for sewerage projects. They will require
loan financing from various sources. In the case of the LGUs, they can source their loan financing from the
Municipal Development Fund Office (MDFO), from government banks such as DBP and Land Bank, and
commercial banks. For WDs, they can borrow from the Local Water Utilities Authority (LWUA). In the event that
LWUA cannot provide loan financing to the WD, the WD should get an exemption from LWUA (if the WD has
existing loans from LWUA) to be able to access loan financing from government or commercial banks. Possible
sources of financing are discussed in Annexes.
Submit budget request to NSSMP to secure NG share
To apply for the national government cost share, LGUs will need to first secure financing for the local portion,
which can include counterpart financing from the Water District and loans from MDFO, government or private
financing institutions. The LGU will then submit their plan and proof of financing to DPWH, which will review
and rank the projects according to a simple ranking system discussed in Section 4.5 (Project application and
selection). Once approved in principle by DPWH, the project will be included in the department’s annual budget
request and go through the budget process for Congressional then Presidential approval. When the budget is
approved, it will be released to the LGU according to the implementation schedule approved by DPWH.
The DPWH reviews the proposal and approves those that are found to be eligible for NG cost sharing. When
national cost share has been approved and budgeted, the LGU will develop a financial plan with the NSSMP Office
to determine when drawdowns and disbursement will be made, and how the project will be implemented.
Subsequently, the DPWH endorses the fund release to LGUs according to the schedule of drawdowns and
disbursements specified in the submitted financial plan.

Implement cost recovery mechanisms

Cost recovery is essential for ensuring that wastewater services will be sustainable. Local implementers may
charge user fees not just to meet cash flow needs but also to achieve full cost recovery over the long term.
For effective pricing, the local implementer will need to consider affordability, willingness to pay, and the effects of
the pricing scheme on the revenues. They can establish user willingness to pay by conducting surveys.
A common way to collect user fees is through the water bill. Each property owner pays for both water and
sewerage or septage management services through their monthly utility bill. This minimizes the need for another
administrative structure and system to implement the program. This approach works well if a Water District is
present and involved in providing sanitation services.
An alternative approach is the collection of environmental fees from residential and commercial water
consumers. An ordinance has to be passed to enable the LGU to collect the environmental fees. Environmental
fees are also collected in tourism areas where tourists are required to pay a certain amount before they can enter a
resort or a tourist attraction.

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6.1.2 Participating agencies

Action Action Description LGU Institutions/ Timeframe

Officers Responsible
Identify financing Determine the project’s financial City Planning and 1 month
needs feasibility Development Office
(CPDO)
NSSMP Local Project
Office
Determine financing requirements CPDO 1 month
and prepare project brief NSSMP Local Project
Office
Secure financing LGU 1 to 2 months
Develop partnerships to help meet
financing needs

Submit budget request to secure LGU CPDO 1 to 3 months

counterpart financing (including approval)
LCE

Submit project brief to LGU 3 to 6 months

GFIs/commercial banks to secure (including approval of
loans loan)

Submit budget request to NSSMP to LGU 1 to 3 months

secure NG share (including approval)

Implement cost Project development and LGU

recovery implementation
mechanisms

6.1.3 Training requirements

Organization Unit Knowledge and Skills Required

DPWH NSSMP Project Office  financial structure possibilities

 concession agreement
LGUs Project Office  financial structure possibilities
MPDO  concession agreement
Local Health Office
WDs All  financial structure possibilities
 concession agreement

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6.2 PPP Option

Proposed sewerage and septage projects can be undertaken through three modes of implementation: (i) an LGU
can implement the project alone; (ii) the LGU and a Water District can form a partnership to implement the project;
or (iii) the LGU can implement the project with a private sector partner. In the case of the latter, the evaluation and
implementation of PPP projects has to be consistent with RA 7718, also known as the “Amended BOT Law”.
The objectives of this section of the Manual are:
 to provide a better understanding of the project development and evaluation process for PPP projects; and
 to describe the steps to be undertaken in evaluating solicited and unsolicited PPP proposals

6.2.1 Participating agencies

LGU Institutions/Officers
Action Action Description Timeframe
Responsible
Development Project identification City Planning and Development varies
Phase Office or LGU End User Unit

Project preparation City Planning and Development varies

Office or LGU End User Unit
Approval Phase Evaluation and approval President, Investment Coordination 30 calendar days
by appropriate authority Committee
of the proposed PPP Regional Development Council, City
project Development Council, Provincial
Development Council, Municipal
Development Council
Competition Procurement process for End User Unit Solicited proposals:
Phase solicited or unsolicited LGU Prequalification Bid and Awards  Option 1: 304 - 349
proposals Committee (PBAC) calendar days
 Option 2: 244 - 274
calendar days
Unsolicited proposals:
416 calendar days
Cooperation Parties adhere to End User Unit varies
Phase provisions of PPP LCE
contract
Monitoring and Monitoring the End User Unit varies
Evaluation construction and
operations of the PPP
facility

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6.2.2 Process workflow and description

Figure 42: PPP Process Workflow

Project Development
The project development phase undertaken by the LGU commences as soon as development targets and
programs have been identified by the LGU, based on the goals and strategies of its development plans approved
by the local development council. During this phase, an LGU identifies priority projects that will be programmed for
implementation during the three-year administration of the Local Chief Executive (LCE) and subsequently selects
the projects that are most appropriate for PPP implementation.
The LGU then undertakes an in-depth due diligence analysis of these projects for the following reasons:
 The LGU must be assured that the proposed project is technically, economically and financially viable
and has no major risks or negative social and environmental impacts. Most LGU projects are multi-user
projects, hence, the project revenues, costs and cash flow available for debt service are interrelated metrics
that are difficult to forecast and are subject to business cycle risks.
 The LGU must be cognizant of all possible risks and how best to allocate and mitigate those risks. The
scope and content of any financial support from the LGU must be clearly defined for such projects, all possible
options analysed and the impact on local budget ascertained.
 The LGU must be assured that the bid documentation components will lead to a successful and
competitive PPP tender.
Project Identification
This phase involves classifying PPP and non-PPP projects. It may coincide with the beginning of each new
administration, when the local development plans are prepared together with annual investment programs. PPP
projects should be identified for potential inclusion in the local development plan, based on the following criteria:
 commercial sustainability
 potential development impact

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 moderate complexity
 high operating costs relative to total project costs
 other planning and policy inputs.
Various PPP contract types are available, including: a) service contracts; b) management contracts; c) lease
contracts; d) concessions; e) BOT; and f) joint ventures. The basic features of these PPP options are shown in
Annexes.
Project Preparation
A well-prepared PPP project proposal should consists of 5 components:
 Technical Assessment Study
 Demand/Market Study
 Social Cost-Benefit Analysis
 Environment, Social and Gender Impact Analysis
 Financial Analysis.

Approval
After the development stage, projects undergo the appraisal and approval process. Depending on their scale,
proposed projects are evaluated by various local and national approving bodies, as described below.

Table 23: Evaluation and approval of projects

Project Type/ Cost Approving Authority

All Build-Operate-Own projects and other schemes not defined in President

Section 2 of RA 7718, subject to the recommendation of the NEDA
Board’s Investment Coordination Committee

Local projects costing above PhP 200 million Investment Coordination Committee (ICC)
All unsolicited proposals regardless of project cost

Local projects costing above PhP 50 million up to PhP 200 million Regional Development Council

Local projects costing up to PhP 50 million City Development Council

Local projects costing above PhP 20 million up to PhP 50 million Provincial Development Council

Local projects costing up to PhP 20 million Municipal Development Council

The BOT Law prescribes two implementation tracks: competitive bidding and unsolicited proposal. Each track has
a distinct approval process.
Competitive Bidding.
On this track the LGU is required to undertake identification of the project and preparation of the project
proposal, and is responsible for (i) determining project feasibility; (ii) securing project approval; (iii) packaging the
PPP project arrangement and conducting the public tender; (iv) entering into the PPP contract; and (v) monitoring
the contract execution. The process flow for competitive bidding is shown in the next figure.

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Figure 43: Approval Process for Competitively-bid Projects

Business Case for PPP
PPP Project Project Approval
LGU Executive Project (Technical, Public Bidding
Proposal Technical Evaluation
Financial, Economic)

Technical Evaluation

Financial Evaluation Contract Award

Feasibility Study
Economic Evaluation

A Environmental Impact Design, Finance,

Draft Contract p Build, Operate
Risk allocation
p
r
Reasonable Rate of Return
o
Company Profile Monitoring
Government Support
v
i Contingent Liabilities
n
g

B Local
o Sanggunian

d Local
y Development
Council

Regional
Development
Council

ICC

(Source: PPP Manual for LGUs)

Unsolicited Proposals.
The process for unsolicited proposals also starts with project identification and preparation of the feasibility
study, but these are undertaken by a private project sponsor. The latter is expected to submit company
information that will be used for qualification, a feasibility study and the proposed contractual arrangement that will
be used to evaluate whether to accept or reject the proposal. If the proposal is accepted, the LGU will secure
project approval. The approving authority sets a reasonable rate of return and the negotiation parameters. The
LGU then negotiates the project scope, implementation arrangements and terms of contract with the private sector
sponsor. If negotiations are successful, the LGU goes back to the approving authority for final approval of the
project. Upon approval, the LGU then launches a Swiss challenge or price test. The Swiss Challenge is akin to a
competitive bid. The only difference is that the original proponent is given the right to match the winning bid. The
proponent is automatically awarded the contract if it is the winning bidder or if it is able to match the challenger’s
bid. The process flow for unsolicited PPP proposals is shown in next figure.

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Figure 44: Approval Process for Unsolicited Proposals

Implementation
Business Case for PPP
BOT Unsolicited Project Approval
LGU Executive Project (Technical, Swiss Challenge
Proposal Technical Evaluation
Financial, Economic)

Technical Evaluation

Financial Evaluation Contract Award

Feasibility Study
Economic Evaluation

A Environmental Impact Design, Finance,

Original Proponent Draft Contract p Build, Operate
Risk allocation

p
Reasonable Rate of Return

Company Profile Monitoring

r Government Support
o
v Contingent Liabilities
i
n
g
Local
B Sanggunian
o
d Local
Development
y Council

Regional
Development
Council

ICC

Contract Negotiations

(Source: PPP Manual for LGUs)

Determining project feasibility

The review and appraisal of a project leading to an investment decision focuses on different aspects which should
have been addressed by the feasibility study. Essentially, project appraisal is one of the mechanisms for check and
balance in allocating scarce LGU resources for projects, e.g. in ensuring that the project is meritorious and will help
achieve the government’s goals and objectives. Items to be reviewed during project appraisal are shown in budget
and financing annexes.

Competition
Procurement for Solicited PPP Proposals
Solicited proposals originate from the LGU. It follows the project preparation or feasibility study stage, and
appraisal or project approval. Solicited proposals are projects that have been identified from the
regional/provincial/local development investment programs and approved by the local Sanggunian and the
appropriate local development councils or the Investment Coordination Committee for PPP implementation.
For a solicited proposal, the procurement may involve one of two options (as provided for under RA 7718):
 Option 1. Under this option, the procurement process has four distinct steps: (1) prequalification; (2) tendering;
(3) submission; and (4) receipt and opening of bids.
 Option 2. Prequalification is incorporated in the tendering step and followed by the submission, receipt and
opening of bids. In short, the qualification documents are simultaneously submitted together with the technical
and financial proposals.

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Under Option 1 the procurement process consists of the following steps:

 project identification and preparation
 approval by the approving body
 advertisement/invitation to pre-qualify and bid
 preparation of pre-qualification documents
 pre-qualification of bidders
 request for proposal/bid preparation
 bid submission and evaluation
 approval of contract award
 issuance of notice of award
 execution/approval of contract
 issuance of notice to commence implementation.
Option 2 is preferred in instances that need immediate action or intervention of government. Option 2 allows for
qualification documents to be simultaneously submitted with the technical and financial proposals. The
procurement process under Option 2 comprises the same steps as in Option 1, except that the preparation of pre-
qualification documents and pre-qualification of bidders are no longer undertaken.
Procurement for Unsolicited PPP Proposals
Unsolicited proposals originate from the private sector. These are project proposals that involve a new concept or
technology or a project that is not in the list of priority projects of the LGU. It is not in response to a formal
solicitation or request issued by the LGU to undertake infrastructure or development projects. This type of proposal
reflects the perception of the private sector on how it might address a development gap or a prevailing issue in the
LGU. The procurement process involves the following steps:
 submission of a complete proposal
 evaluation of the proposal
 negotiation with original proponent
 approval of the project proposal and contract
 adjustments of fees/charges
 acceptance of terms and conditions by the original proponent
 issuance of invitation for comparative proposals
 preparation and submission of comparative proposals
 evaluation of proposals
 determination of the winning proponent
 approval of contract award
 issuance of notice of award
 execution/approval of contract
 issuance of notice to commence implementation.

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Cooperation
Several elements need to be set in place to ensure a synergistic environment for a PPP project. These include:
 Policies should strike a balance between public welfare on the one hand, and private investor interests
and investment protection on the other.
 Risks should be identified and prudently allocated.
 Contracts should be crafted in a way that clearly delineates roles, responsibilities and deliverables
between the parties involved and assigns risk coverage.
 The establishment and implementation of the PPP facility should be pursuant to the provisions agreed upon by
both the LGU and the private investor.
During the cooperation phase, both parties adhere to the arrangements specified in the signed PPP contract. It is
therefore critical that the LGU ensures that the concession agreement is duly complied with in accordance to the
identified roles and obligations of both parties. The LGU needs to be mindful of the provisions of the PPP contract,
particularly the following:
 construction provisions
 operation provisions
 transfer of project, if applicable
 tariffs to the end-user
 the quantity and quality of contracted goods or services
 performance standards.

Monitoring and Evaluation

Monitoring and evaluation cut across the different phases of the PPP framework. Section 4.9 of this Manual
provides detailed guidance on the monitoring, evaluation and reporting of a project's operations, performance and
impacts.
As the PPP project is developed and approved, the LGU is responsible for ensuring that contract provisions are
duly implemented from the start of construction to the operation of the proposed project. The issuance of Notice to
Proceed by the local chief executive formally marks the beginning of the implementation phase. It is at this point
that the LGU takes on the primary responsibility of coordinating PPP project-related activities, ensuring compliance
by the private partner to the agreed upon technical specifications, and monitoring the construction and operations
of the PPP facility.
6.2.3 Training requirements

Organization Unit Knowledge and Skills Required

DPWH NSSMP Project Office  financial PPP schemes

 PPP evaluation
 PPP monitoring
 PPP procurement processes

LGUs Project Office  financial PPP schemes and processes

Municipal Planning &
Development Office
Local Health Office
WDs All  financial PPP schemes and processes

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6.3 Financing Schemes

Following table illustrates different manners to finance the sanitation project. There are five main parts to be
financed namely pre-feasibility study, design, construction operation and debt repayment.
 The base-method to finance sanitation projects is by NSSMP grant, plus LGU budget, plus loan for the CAPEX
and by the tariff for OPEX.
 By organizing a PPP.

Table 24: Financing schemes

Pre-Feasibility
Financial Design Construction Operation Debt Repayment
Source Study
NSSMP 90%0 90% 40%
LGU Budget 10% 10% 30%
Loan 30%
Tariff 100% 100%

With PPP Scheme

Pre-Feasibility
Financial Design Construction Operation Debt Repayment
Source Study
NSSMP 40%0 40% 40%
LGU Budget 10% 10% 10%
Loan 30%
Private 50% 50% 20%
Operator
Tariff 100% 100%

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7 Part E: Communication
It is in the area of behavior change where communication forms a significant part of the support component of the
NSSMP. Communication is conceived as a social intervention capable of transforming the behavior of the
stakeholders from unfavorable to favorable ones that are consistent with the targets and objectives of NSSMP.
Furthermore, communication can be designed to help fulfill a directed social change. This is reached by
creating a climate of acceptance of the program and of compliance to its requirements among the
stakeholders. When designed strategically, communication can:
 provide the stimulus to encourage stakeholders to learn more about the NSSMP;
 acquire more information about the various phases of program implementation and what it entails for them and
other stakeholders; and
 help ascertain what they need and expect and, thus, help program implementers manage such
expectations.
The communication component of NSSMP aims to help bring about behavior change among two groups of
stakeholders: the “doers or local implementers” and the “influencers”.
As mentioned earlier, the “local implementers” include the HUCs, LGUs, WDs and other private service providers.
The “influencers” refer to the households and commercial or industrial firms in a given locality who are the “point
sources” or generators of the septage that has to be treated and managed.
Dealing with these two groups of intended audience, the communication component of NSSMP will be divided into
(a) a national communication strategy for HUCs, LGUs, WDs and private service providers as the intended
audience, and (b) a local communication strategy for households and commercial/industrial establishments in a
given locality. The one for the local level can only be developed once the pilot HUCs have been selected and the
process will form part of the HUC's preparatory work in preparing their project proposals.

7.1 NSSMP National Communication Strategy

The national communication strategy aims to encourage local implementers to (a) “buy into” the goals of the
NSSMP; (b) bring them to a stage where they would have the necessary commitment; and (c) take the final
action to invest in, build, operate and manage on a sustainable basis appropriate septage and sewerage
infrastructure in their respective localities.
In summary, communication is a process that will need to continue throughout the life cycle of sanitation projects
(see Section 2.1), from the first steps of encouraging potential local implementers to take an interest in the NSSMP,
and its goal and opportunities, to involving local communities in the prioritization of sanitation concerns
(stakeholder consultations), and through project conceptualization and development, to obtaining community
feedback on the performance of sanitation facilities and systems, and the quality and cost of services. The
recommended approach for the initial phase of the communication strategy, targeted at local implementers, is
discussed and outlined in this chapter.

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7.1.1 Participating agencies

Institution Role

Department of Public Works and Highways Oversee the overall planning and implementation of the communication
(DPWH) strategy for NSSMP

Department of Health (DoH) Administer health education programs

Provide a training and promotion campaign for the NSSMP

Department of Education (DepEd) Incorporate septage management and sewerage-related concepts and
Commission on Higher Education (CHED) practices into the school curricula.

Public Information Agency (PIA) Develop and implement IEC programs for development projects of the
Government
Incorporate the promotion of septage management and sewerage in
Government information campaigns

Environment Management Bureau (EMB) of Conduct public information and education on water quality issues and
DENR practices

Local Water Utilities Administration (LWUA) Assist in the dissemination of information to and capacity building of all water
districts in the country concerning NSSMP

Department of Interior and Local Government Assist in the dissemination of information to and capacity building of
(DILG) HUCs/LGUs in the country concerning NSSMP; facilitate LGU compliance

7.1.2 Process workflow and description

Figure 45: Communication Strategy Process Workflow

Stakeholder Analysis
The behavior change continuum for the local implementers of NSSMP is patterned after the Knowledge-
Approval-Intent-Practice-Advocacy (KAIPA) guide. It recognizes that people usually move through several
intermediate steps before they change their behavior entirely. These steps are (a) acquiring Knowledge, (b) gaining

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Approval or Acceptance of what is being offered or proposed, (c) reaching a point of Intention to take up the offer,
(d) adopting its proposed Practice, and (e) eventually Advocating to, and sharing the experience with, others. It is
important to distinguish between these stages, as each requires different information or messages, treatment,
communication channels and communication approaches.
Since NSSMP is a new program, it can be safely assumed that local implementers still have a low level of
knowledge, approval, and interest; have not invested in infrastructure; and have no experience yet as basis for their
advocacy on sewerage and septage management.

Table 25: KAIPA Analysis of Local Implementers

KAIPA HUCs WDs/other Service Providers

Knowledge Low Low

Approval Low Low

Interest Low Low

Practice No investment in infrastructure yet No investment in infrastructure yet

Advocacy No experience as basis for advocacy No experience as basis for advocacy

Existing Communication Efforts and Resources

The communication should build upon the existing communication initiatives of other programs and agencies in the
locality as they relate to septage management and sewerage. For example, DoH has already developed a national
communication plan for water quality and sanitation (WATSAN). These and other efforts listed in Table 22 should
be incorporated into the strategy design process so that they reinforce NSSMP communication efforts. This
integration also requires establishing a more formal working relationship with the agencies concerned

Table 26: Current Communication Efforts Related to the NSSMP

Agency Communication Effort

DoH DoH has already developed the “Health Promotion and Communication Plan for Water and Sanitation”
(WATSAN), complete with prototype communication materials for specific stakeholders or audience. It has
also developed toolkits for public awareness and promotion of sustainable sanitation for LGUs.

EMB EMB’s Environmental Education and Information Division (EEID) conducts campaigns focusing on safe/clean
water and water quality management. Since 2005 EMB has been conducting numerous public awareness
campaigns and has produced a considerable number of different types of communication materials to
educate the public on the link between environment, health and livelihood.

DepEd In partnership with DoH, DepEd has started incorporating concepts and practices in water quality, sanitation
and hygiene (WASH) in the curriculum at various levels from kindergarten to grade 10. Teaching materials will
be developed and produced and teachers trained on how to use the modules.

PIA As a government communication agency, it provides assistance in conceptualizing communication materials,

organizing press conference, distributing press releases, and TV airing of NSSMP plugs or advertisements in
the government-owned TV channel.

For the feasibility of any formal partnership for the NSSMP communication effort, an analysis of the six institutions
based on the five Cs as criteria was undertaken. The results are shown in Table 23. The 5 C’s refer to competence,
commitment, clout, coverage and continuity.

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Table 27: Assessment of Strategic Partners Based on the 5 Cs

5 Cs Assessment

All six agencies have relatively strong communication and management staff, a solid experience with similar
Competence activities, and a positive image and reputation for quality work. DoH is highly trained on communication and
promotion.

While all have indicated commitment to serve as communication partners for NSSMP, a unanimous concern
Commitment was the provision of budget. They are willing to participate as long as there is clear budget support for
NSSMP communication activities.

Among the agencies, PIA has strong clout with media networks, being the Government’s information
Clout dissemination arm. It can help organize press conferences and gather the press and media practitioners at
one time.

Through their bureaucracy, all agencies have counterpart communication units at the regional and district
Coverage levels. But they noted that the level of communication resources and expertise decreases downwards at the
local level.

All agencies have the institutional base and resources for sustainability, but expressed the desire that the
Continuity communication budget be increased to help them in undertaking a more robust communication effort for the
NSSMP.

Strategic Design
Based on the results of the situation analysis, the strategic design is configured to depict the overall communication
strategy. This is done in terms of priority issues to addressed, stakeholders to be targeted, behavior change or
objectives to be pursued, messages to be communicated, channels and media to be used, and communication
approaches to be employed.
Priority Issues
The national issues to be addressed by NSSMP include (a) a low level of awareness and demand from the public,
(b) low technical capacity among service providers, (c) lack of enforcement of regulations by Government
agencies, and (d) the limited resources of service providers.
This communication strategy is primarily focused on the issue of low level of awareness and demand, and the
related issue of the public’s willingness to pay for these services.
Intended Stakeholders
In the context of NSSMP, those whose behaviors, decisions and actions would directly influence the outcome of
the program are considered the primary intended stakeholders. These are the local implementers: HUCs/LGUs,
WDs and private service providers.
Behavior Change Objectives
Behavior change is a process or a continuum, and does not happen overnight. Guided by KAIPA, the desired
behavior change must be hinged on the issues. As such, the objectives of the communication strategy should focus
on what the stakeholders should be able to do after exposure to the communication activities.

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Table 28: Behavior Change Objectives for Intended Stakeholders

Behavior HUCs, LGUs, WDs, Private Service Providers

Change Objective (Local Implementers)

Knowledge  Identify the environmental, economic and social losses of poor septage and sewage management.
 Recognize the environmental, economic and social benefits of improved septage and sewage
management.
 Identify NSSMP services or offers which they can avail of.

Approval/Acceptance  Acknowledge their mandates and roles in septage and sewage management.

 Appreciate the benefits derived from improved septage and sewage management for their institutions
and the general public.

Intent  Apply for government assistance (technical, financial, etc.) through DPWH to establish proper septage
management and /or sewerage infrastructure.

Practice  Build, operate, manage and sustain the sanitation facilities and services.

Advocacy  Share lessons learned and benefits with other HUCs/LGUs, WDs and private service providers.

Message Contents
Preferably, message contents should correspond one-to-one with behavioral objectives. The following table
identifies the key message contents for each stage in the KAIPA guide.

Table 29: Message Contents for Local Implementers

Behavior Message Content

Change Objective

Knowledge Environmental, economic, and social losses of poor septage and sewerage management
Environmental, economic, and social benefits of improved septage and sewerage management
NSSMP as government’s response to maximize health and environmental benefits of improved septage
and sewerage management (goals, objectives, scope, targets, strategies, roll out)

Approval/Acceptance Mandates and roles of HUCs, LGUs, WDs, and private service providers in septage and sewerage
management in the country
Benefits derived from improved septage and sewerage management that would accrue to the institutions
and the general public
Qualifications for application to NSSMP grant and assistance

Intent Government assistance (technical, financial, etc) for septage management and/or sewerage infrastructure
[technical requirements, project planning, project financing, PPP evaluation]
Step-by-step process for grant application [project selection, procurement and tendering]

Practice Guidelines for the construction, operation, management and sustainability of facilities and services [project
management, budgeting and expenditure, operations monitoring, water quality impact monitoring,
environmental and social safeguards]

Advocacy Lessons learned and benefits from NSSMP

Best practices in septage and sewage management

Communication Media, Channels and Approaches

The choice of communication media and channels to be used at each KAIPA stage is guided by the general rule:
“there is no single best medium.” Communication is always more effective if a combination of media or channels
are used. However, in terms of cost-effectiveness, more mass media should be used at earlier stages of KAIPA
(i.e. for awareness raising and approval) and more interpersonal or face-to- face communication in the latter stages
(to concretize intent and guide correct practice or adoption).

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Figure 46: Media Mix and Complementation Guide

Table 30: Menu of Communication Approaches

Communication KAIPA Stage Description

Approach where appropriate
Information K, A Transmission of data to provide objective facts
Example: Informing the community that poor sanitation leads to 55 deaths per day

Persuasion K, A Communicating to influence others

Example: Crafting messages that focus on individual, household and community benefits

Promotion K, A Informing to make people aware with and familiar with new concepts or practices
Example: Campaign to inform households of septage and sewage management as
Government’s priority for promoting sustainable sanitation and total human development

Advocacy K, A, A Seeks to generate support of policy makers and decision makers

Example: Demanding septage services from all LGUs as a human right and a public good

Education K,A Communicating to increase knowledge, change attitudes and develop correct practices
Example: Integration of sanitation concepts and practices in school curriculum

Training I, P Imparting practical skills to facilitate the new practice

Example: Training among commercial firms on proper waste water disposal and on
management of septage facilities

Networking and K, A, I, P, A Joining or working together with other groups or associations having the same interest
Partnership and commitment in pursuing program goals
Example: Partnership with DILG and DoH in implementing NSSMP

Group Formation I, P Formation of a group of people to address specific issues

Example: Organization of women’s groups to monitor community members violating the
“no open defecation policy”

Community mobilization I, P Deliberate effort to bring together sectors in the community with stake in a particular
development intervention to take part in project activities
Example: Organization of multi-agency working group to oversee implementation of local
sanitation plan

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Development, Production, and Pretesting of Communication Materials

Message contents need to be transformed into carefully crafted messages for various communication media and
channels (brochures, posters, tarpaulins, Frequently Asked Questions, billboards, websites, press releases,
newspaper ads, and radio/TV plugs). The messages crafted should be guided by the 7 Cs as indicated in the next
table.

Table 31: Tips and Principles for Crafting Key Messages

Tip Principle Specific Message

Command attention Messages should be noticeable, easily remembered, Who wants feces and coliforms in their water?
stand out from the clutter and are sensitive to cultural
context, social values, and political priorities.

Cater to the heart and head Emotional value is as important as facts; make an To address your water quality and health, DPWH
emotional connection before attempting to convey launches its S2 (sreptage & sewerage) program .
information.

Clarify the message Keep the message simple and free from clutter. It will Neglect of wastewater treatment leads to 55 deaths
not be remembered if it is not understood. per day.

Communicate a benefit What’s in it for me? A benefit is a strong motivator for Government can save PhP 78 billion a year
people to change their behavior. through proper septage and sewage management.
Proper sanitation leads to good health. Good
health is a basic capital for livelihood.

Create trust People usually act on messages from people they can Government is investing PhP 26.3 billion to build
trust. The message must ring true. and operate wastewater treatment systems your
urban centers.

Consistency counts Repetition of messages is essential for message recall Safe and clean water is your right.
and for better understanding. Say the message over Safe and clean water is attainable.
and over in all media.
Safe and clean water is worth demanding.

Call for action Tell the stakeholders what to do, where to go and who Inquire more about S2 service!
to call when they need to know something more. Call 304-3000; hotline 165-02; or visit
www.dpwh.gov.ph

It is important for the strategy to have its positioning message. This is a “label or brand” associated with the
project and the services it stands for. Initially, the NSSMP is being proposed to be labeled as S2 project in line with
the C4, C5 projects which DPWH has become known for through the years.

Figure 47: Label of Brand

Sewerage

S2
Septage

The communication materials will be produced in accordance with the KAIPA guide and the message contents
identified for each stage, bearing the S2 brand for identity. At the initial stage, only prototypes will be produced for
pretesting. Then they will be finalized for mass reproduction after revision based on pretesting results.

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Table 32: List of Communication Materials

KAIPA Stages Message Content Communication Media and Channel
Knowledge Environmental, economic and social losses of poor management Brochure/project brief, primer, poster,
practices tarpaulin, billboard, NSSMP web site, press
Environmental, economic and social benefits of improved practices releases, radio/TV plugs, video
NSSMP as Government’s response to maximize health and
environmental benefits
Approval/ Acceptance Mandates and roles of service providers Brochure, primer, frequently asked
Benefits of improved septage and sewage management for institutions questions, poster, radio/TV plugs, web
and the general public sites, seminars
Qualifications for applications for NSSMP funding assistance
Intent Government assistance (technical, financial, etc.) for establishing new Manual, toolkits, booklet on process flow,
infrastructure and systems web site, training, advisory services (social
Step-by-step process for grant application media and interpersonal)

Practice Guidelines for construction , operation, management and Manuals (print, CD, download from NSSMP
sustainability of facilities and services web sites), video, toolkits, training,
[project management, budgeting and expenditure, operations advisory services
monitoring, water quality impact monitoring, environmental and social
safeguards]
Advocacy Lessons learned and benefits from NSSMP Video (3-minuter for presentation and 60-
Best practices in septage and sewage management seconder for uploading to YouTube and
web site), policy briefs

Implementation and Management

Implementation of the communication strategy for NSSMP is a task that needs to be institutionalized as part of
DPWH's operation. Following the proposed NSSMP Office at the national level (see Section 1.2 on Lead Agency
and NSSMP Office), the suggested communication professional to be hired fulltime to lead the implementation of
the communication strategy will be assigned to carry out the tasks spelled out in next table.

Table 33: Implementation Tasks

Role Tasks
Coordinator (Communication Oversee implementation of the NSSMP national communication strategy
Professional under the NSSMP Office in
DPWH)
NSSMP web page Create an NSSMP link in the DPWH web site
Prepare contents for uploading
Animate the NSSMP web page regularly
Materials production and distribution Coordinate the conceptualization and production of materials
Prepare a distribution plan for the materials
Monitor how these materials reach the intended stakeholders
Liaison with mass media and partners Map out partners and maintain a directory
Establish and maintain partnerships
Liaise with partners where their participation and assistance is needed
Organization of trainings, seminars, Develop the training plan, schedule and budget
workshops Coordinate the conduct of different trainings
Compile training reports and materials
M&E and documentation Document (through photos and video) the communication activities
Conduct regular monitoring of activities
Submit evaluation reports to DPWH
Technical Advisory services Provide technical advice to inquiries received from stakeholders

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Partnerships and Networking

Table 34: List of Potential Institutional Partners for Strategy Implementation

Name of Group/Institution Role in NSSMP Communication Strategy
Government Agencies Integrate NSSMP message contents in their ongoing communication
DoH, DENR, PIA, DepEd, DILG, LGUs, WDs campaigns and activities
Media Provide air time for NSSMP radio/TV plugs at discounted rates
ABS-CBN, TV5, GMA Help publish press releases and feature articles in their Sunday magazine at
National Broadsheets minimal cost
Community newspapers in HUCs
Academe May tap their students for conceptualization and development of
College of Mass Communication UP Diliman communication materials for free or at minimal cost
College of Development Communication, UP Los Banos St. They can help organize contests related to production of materials (logo,
Scholastica poster, jingle, etc)
other state colleges and universities in HUCs offering
communication courses
NGOs Provide services in organizing consultations and trainings at reasonable cost
PWWA Link up the project with the WDs at the local level

Monitoring and Evaluation

Table 35: List of M&E Indicators for Communication Strategy

Behavior Change HUCs, LGUs, WDs, Private Service Providers Indicators

Targets (National Level)

Knowledge Identify environmental, economic and social losses No. of HUCs/LGUs, WDs and private service providers
Recognize environmental, economic and social benefits inquiring about NSSMP

Identify NSSMP services offered No. of HUCs/LGUs, WDs and private service providers
attending seminars and workshops
No. of hits on NSSMP in DPWH website

Approval/Acceptance Acknowledge mandates and roles in septage and sewage Local ordinances and WD board resolution prioritizing
management sanitation improvements
Appreciate the benefits of derived improved sanitation for Inclusion of septage and sewage management in the
institutions and the general public local development plans

Intent Apply for government assistance to establish proper No. of applications received for NSSMP grant and other
septage management and /or sewerage infrastructure and assistance
systems No. of requests for technical assistance

Practice Build, operate, manage and sustain septage management No. of projects/facilities constructed
and sewerage facilities and service No. of projects/facilities well operated and maintained

Advocacy Share lessons learned and benefits with other No. of cases depicting best practices in septage and
HUCs/LGUs, WDs and private service providers sewage management
LGUs sharing their experiences in seminars, workshops
and other venues

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7.2 NSSMP Local Communication Strategy

The communication strategy intended for the local or HUC level essentially follows the same process as that of the
national (please refer to Figure 28). But it would differ in terms of coverage, target stakeholders, behavior change
objectives, messages, media and channels, and approaches.
The local communication strategy is one that focuses on the HUC or LGU where the septage and/or sewerage
project will be established. The HUC and/or WD district concerned will be the planner and implementer of such
communication strategy. Hence, it will have a well defined and limited area of coverage. Using the data per HUC
that have yet to be generated or drawn from secondary sources, the most that can be done at this rollout stage is
to demonstrate how the process should proceed.

7.2.1 Process description

Stakeholder Analysis
Table 36: Guide for Undertaking Stakeholder Analysis
Key Question to Ask Action to Take

Who are the stakeholder groups whose behavior change 1. Identify percentage of households that exhibit undesirable behaviors:
will be targeted by the communication strategy? - open defecation
- Households - poor sanitation and maintenance of toilets
- Industrial firms - do not practice desludging of septic tanks
- do not practice sewage collection and treatment systems
2. Identify percentage and map out the different industrial firms that do not comply
with waste water treatment requirement
Those that will be identified will be the priority targets of the communication effort.

What is the KAP level of households and industries? 1. Determine the KAP level of households on septage and sewerage management
(classify qualitatively as low, moderate and high based on the undesirable behaviors
stated above):
- Low, if they exhibit all four undesirable behaviors
- Moderate, if they do not exhibit any two of the four items
- High, if they do not exhibit all four items
2. Determine level of compliance of local industries with water treatment
requirement and/or in terms of BOD level of their waste water.
- Low, if they do not have waste water treatment
- Moderate, if they have water treatment facility but BOD level still exceeds the
standard
- High, if they have waste water treatment facility and BOD level is maintained at or
below the standard

What behavior change among the households and In line with the goals of NSSMP, the local communication strategy shall aim at
industries should be targeted by the communication enabling the households and industrial firms to:
strategy? - minimize their wastewater
- from economic, social and environmental viewpoints, realize the need and demand
for waste water treatment in their locality
- be willing to pay for these services in exchange for the benefits derived

Existing Communication Efforts

At the local level, the HUC/WD need to tie up with already existing communication efforts on sanitation, hygiene,
water quality and others related to septage and sewerage being carried out by other agencies and groups. The
most likely agencies will include DOH, DepEd, DENR, local schools and other civil society organizations. These
groups are also potential partners in the actual implementation of the local communication strategy. Criteria for
assessing potential partners listed in Table 23 can also be a useful guide for this task.

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Strategic Design
Using the KAIPA guide and based on the data generated in the stakeholder analysis, the communication strategy
may now be designed using the sample template below. The HUC/WD can start off with this strategic design and
they can just modify based on their own assessment of the actual situation.

Table 37: Summary Table for the Strategic Communication Design

Implementer HUC/WD with DPWH, DoH, DENR

Primary Households & Industries

Targets

Behavior Knowledge Acceptance Interest and Intent Practice Advocacy

Change
Continuum

Behavior 1. Households 1. Households 1. Households 1. Households

Change Targets - Explain and appreciate importance or - Illustrate or - Install household - Champion the cause of
(Objectives) benefits of household level sanitary demonstrate proper sanitation facilities sanitation at household
toilet practices and proper sewage installation of level among their
2. Industries
management (in terms of health, household sanitation neighbors and friends
- Install or get connected
economic, social, environmental facilities (toilets, septic
to wastewater treatment 2. Industries
benefits) tanks, drainage for
facility - Champion the cause for
wastewater)
2. Industries industries compliant to
3. Both households and
- Explain legal requirements for 2. Industries water quality standard
industries :
wastewater treatment - Inquire about among fellow industries
- Minimize wastewater
- Appreciate economic, possible installation of
generation
environmental, and social benefits of wastewater treatment
- Demand for septage
proper wastewater treatment to facility; or
and sewerage services
industries and local community - Inquire how to access
- Willing to pay for such
service providers for
services
wastewater treatment

Key Messages 1. Households 1. Households 1. Households 1. Households

- Minimize health cost. - Technology options - Guidelines for - Manageability of
- Be sanitary at your own home for sanitary toilets maintaining septic tanks improved household
- Clean toilets and good sanitation and/or sewage - List of service providers sanitation and hygiene,
practices add prestige to your home management for desludging of septic as well as sewage
(Note: Tie up this activity with DoH technologies with tanks treatment
WATSAN (water and sanitation) estimated costs - Savings and prestige
2. Industries
communication campaign) - Related local generated from good
- Updates on water
ordinances sanitation practices
2. Industries quality standards
- Proper wastewater treatment ensures 2. Industries 2. Industries
continued clean and affordable water - Laws pertinent to - Compliance with water
in the future. wastewater treatment quality standard
- Laws pertinent to wastewater - Technology options enhances business
treatment for waste water credibility to the public
treatment facility with - Compliance with the law
estimated costs is good business
- List of water
treatment service
providers with price
offers

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Implementer HUC/WD with DPWH, DoH, DENR

Primary Households & Industries

Targets

Behavior Knowledge Acceptance Interest and Intent Practice Advocacy

Change
Continuum

Approaches, Local public awareness raising - Community meetings - On site-monitoring Share good practices
Media and for actual
a. For high visibility, use tarpaulins, - Leaflets - Community meetings
Materials demonstrations in
and posters and install them in organized by barangays,
collaboration with LGU - Hotlines
strategic areas (barangay halls, school PTAs, rural health
officials
municipal service centers, market clubs, women's clubs,
bulletin boards, jeepneys, tricycles, - Leaflets and other community-
and sari-sari stores, etc) based organizations
- Websites
b. Plugs for airing in local radio - Informal peer sharing
- SMS
stations and cable TV, Press releases (occupational groups,
or features for publication in - Door-to-door neighbors, friends, etc)
community newspapers campaign by barangay
health workers
c. Speakers bureau

M&E Key Number of requests for additional Number of requests for Households - Increased number of
indicators information assistance received households with improved
- Number of households
sanitation facilities and
Expressed willingness to pay for the with improved sanitation
practices (toilets and
services (toilet) facilities
sewage management) by
- Demand among 2020
households for improved
-Increased number of
sanitation facilities and for
industries compliant to
sewage treatment
water quality standard
- Payment rate to septage after treatment
and sewerage services

Industries

- Reduction in BOD in
treated wastewater

- Number of industries
complying with water
quality

Knowledge and Acceptance

Before the households can be expected to adapt the desired behaviors needed for NSSMP to succeed, they must
first learn to view septage and sewage management as important enough to justify their payment of the necessary
user fees and their investment in improving their household sanitation facilities. For this to be achieved,
considerable effort must be given to communication activities that will increase their understanding of the important
link between septage and sewage management and the continued availability of clean, affordable domestic water
as well as the avoidance of additional health care costs.
Caring for the environment is generally seen as an additional, low-priority cost and future problems that may result
from environmental degradation are often viewed as less important than immediate survival needs. Thus,
conveying the importance of septage and sewerage system by focusing on how it can help households avoid
problems that they can relate to instead of loftier ideals (i.e. clean water, better public health) will more likely
produce the behavioral response needed to better ensure NSSMP’s success.
All communication materials and activities at this stage of behavior change should therefore communicate the
following key messages:

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1. Minimize health care costs. Be sanitary at your own home. Open defecation, makeshift toilet facilities,
inadequate septic tanks (e.g. open bottom, inadequately sized and installed), and reactive and irregular
desludging of septic tanks are unsanitary. Such practices ensure that pathogens from human excreta make
their way to the surface and groundwater sources. This increases the incidence of diseases, requiring
households to appropriate a greater percentage of their budget to health care.
2. Wastewater treatment will ensure continued clean and affordable domestic water. Untreated domestic,
commercial, agricultural and industrial wastewater pollutes drinking water aquifers and can increase the
incidence and spread of disease. Households should make it their business to know how their LGUs manage
the city’s wastewater to ensure the health of their family. These key messages can be conveyed through the
following communication materials:
 Posters. A poster series can be produced to discourage open defecation and promote household septage
management. These should be displayed in clinics and other high foot traffic areas (e.g., market places,
local business waiting rooms, local government offices, etc.). The posters should highlight how pathogens
from human excreta can contaminate surface and groundwater sources and contribute to the spread of
disease. All posters in the series will include the action statement: Iwasan ang gastos sa sakit. Linisin ang
sariling dumi. (NOTE: The concerned HUC/WD should coordinate first with local DOH about these
messages and materials because these are parts and parcel of DOH health promotion and
campaign on water and sanitation or WATSAN.)
 Local radio/TV trivia or plug. A one-minute radio trivia and/or plug series can be produced to educate the
households and industries on wastewater treatment through septage and sewerage management. These
can be played in local or community radio AM and FM radio stations at least every one to two hours. The
following topics are suggested:
a) Bakit importanteng regular na ipalinis ang inyong septic tank? (Why is it important to regularly
desludge septic tanks?) Should end by encouraging the households to regularly get their septic tanks
cleaned and well-maintained.
b) Bakit importante ang pagkakaroon ng maayos na septic tank? (Why is it important to have a well
constructed septic tank? Should end by encouraging the public to make sure their septic tanks are up to
code. Mentioning local laws and ordinances on building standards for septic tanks and penalties for non-
compliance would increase the effectiveness of such a plug/trivia.
c) Saan pumupunta ang gamit na tubig mula sa bahay mo?(Where does your waste water go?) Should
emphasize the importance of sewerage system construction and the importance of user fees in making this
happen.
The radio trivia/plug series would be most effective if they describe the current local septage and sewerage
scenario using actual data/information on the HUC (e.g. number of households connected to sewerage systems
and those with septic tanks, plans of the local government in installing or expanding the sewerage system, possible
user fee levels, etc.) instead of simply describing a generic system.
The radio trivia requires only one narrator and would be cheaper to produce while the radio plug, which usually
uses the dramatized format, would require more voice talents but may be easier to relate to. Cable TV plugs/trivia
would be much more expensive to produce but has the added visual component, which may increase public
appreciation of the issue.
 Speakers’ bureau. Barangay health workers (BHWs), youth leaders, teachers, and other community leaders
can be trained as speakers on the city’s septage and sewerage system. Their training should provide useful
and practical information about how families can take simple steps to improve sanitation. This can include
general information on how families can participate in the city septage management program, how to properly
use and desludge septic tanks, and how to reduce odors, flies and other nuisances that result in poor
wastewater management practices. The trained speakers can share the information they learned in their own
circles of influence.
 Hotline. The local DoH and/or DPWH unit should have a hotline that interested citizens can call for assistance
in starting the necessary improvements in their household sewage management.
Interest and Intent
Once informed, the households’ interest and intent to participate in the program should be sustained and further
encouraged by providing them with information that will allow them to take action. The HUC/WD should provide
interested households with the following:
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 List of technology options to improve their toilet facilities and/or household septage management. The list
should clearly describe each technology and provide an estimated cost.
 List of government-accredited local contractors. The contractors’ contact details and address should be
clearly indicated along with the services they can provide (i.e. installation of septic tank or toilet facilities, septic
tank desludging).
 Local laws and ordinances. Local laws and ordinances on building standards for septic tanks and penalties
for non-compliance should be reiterated as a reminder.
A link can be established in the NSSMP website sharing the information above. These information can also be
summarized into a one-page leaflet, which can lead readers to the website if more information about each
technology option is sought. The leaflet and webpage can be supplemented by the local DPWH and DoH hotline,
which interested citizens can call for further assistance.
For areas with space and monetary constraints wherein a multi-household toilet facility is most applicable, a door-
to-door campaign by barangay health workers can be conducted wherein they can discuss technology options for
community toilet and septage management facilities with community leaders. Non-government organizations that
specialize in helping small communities set up their own toilet and septage management facilities can be tapped by
the LGU as partners in improving the sanitation facilities of such areas.
Practice
To sustain public participation, enforcement of local laws and ordinances and compliance monitoring should be
kept efficient and effective. A leaflet indicating the guidelines in efficient household septic tank management can be
produced and distributed to households through community organizations and homeowners’ associations and/or
with water bills. A poster of this leaflet may also be produced and displayed in high foot traffic areas.
Advocacy
The positive testimony of those who took part in a development initiative can encourage others to also participate.
Early adopters can be included in the speakers’ bureau to help attract more adopters. Some can also be tapped in
the production of testimonial plugs for airing in local radio and cable TV through which they can share information
about their experience (i.e. ease of the adoption process because of DPWH/DoH assistance, ease in changing
sanitation practices at home, etc.) and the benefits they are reaping because of adoption (i.e., savings in the long
run, lower incidence of disease, cleaner environment, etc.) as well as enhanced social prestige.
Also part of continuing advocacy is the inclusion of key sanitation and SSM messages in the K-12 health
curriculum. Open defecation and its role in increasing disease incidence can be incorporated in grades 2 and 3
discussion of disease prevention. The importance of clean water to public health can be expanded on in the grade
5 discussions of community and environmental health. Lastly, the importance of wastewater treatment through
sewerage and septage management can be discussed in grades 7 and 8 during discussions on disease prevention
and control and community and environmental health.
Localizing the Strategy
It should be noted that the communication strategy detailed above need not be implemented by the HUC/WD in its
totality. The strategy must first be localized to better suit the needs and characteristics of a specific public. The
following can serve as an informal checklist in further localizing the communication strategy:
 Start with what your public knows and believes. In some HUCs, majority of the public including the
households may already know the importance of septage and sewerage management and are already willing
to pay for these services and invest in improving their household sanitation facilities. If such is the case,
strategy implementation can start with activities that encourage interest and intent instead of knowledge and
acceptance. Thus, local strategy implementation can start at the behavior change stage where the majority of
the public is at.
 Disseminate the information based on the specific communication habits of your public. There are
suggested materials and methods for each stage of behavior change indicated in the strategy. However, these
can be enhanced or replaced by methods that have been proven effective in previous campaigns in the locality.
So review these past activities and derive lessons from them.
 Use existing communication materials. Previous communication materials on sanitation, if any, can be
reused or enhanced whenever applicable. DOH and DENR have existing communication materials which can
be adopted or enhanced for the local communication strategy of NSSMP.

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7.3 Training Requirements

Organization Unit Knowledge and Skills Required

DPWH NSSMP Project Office  strategic communication planning

HUCs / LGUs Project Office  positioning/branding
Municipal Planning &  monitoring & evaluation
Development Office
Local Health Office/
LDWQMC
WDs All

7.4 Supporting Information

The Communication Strategy presented by the Consultants will provide further explanation of the process and
present templates for implementation. Its name is NSSMP National Communication Strategy. Other toolkits
available online are: (a) the Guidebook for a Local Sustainable Sanitation Promotion Program (part of the DOH
Philippine Sustainable Sanitation Knowledge Series, (b) USAID’s Ten Steps to Bringing About Positive Change
Through Your Water and Sanitation Promotion Program, and (c) DoH’s Development and Implementation of Urban
Sustainable Sanitation Awareness Raising Campaigns.

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8 Supporting Documents, Guidelines and Templates

This Chapter contains a variety of supporting or sample documents, guidance, formats and templates to assist
project implementers and supporting agencies to implement the processes described in the main body of the
Manual.
INSTITUTIONAL ORGANIZATION AND SUPPORT 126
TASKS, INPUTS, OUTPUTS AND TIMING FOR RESPONSIBLE ORGANIZATIONS 126
SAMPLE BASELINE SURVEY FORM 145
PRIORITIZATION OF SANITATION NEEDS 147
GUIDANCE ON STAKEHOLDER AND PARTNER CONSULTATION 148
LIST OF POTENTIAL STAKEHOLDERS 149
SAMPLE EXECUTIVE ORDER ESTABLISHING A TWG 150
FEASIBILITY ASSESSMENT TASKS AND DOCUMENTATION 153
LIST OF REQUIRED DOCUMENTATION, PERMITS AND CLEARANCES 155
SAMPLE RESOLUTION FOR ADOPTING A LOCAL SUSTAINABLE SANITATION PLAN 156
SAMPLE ORDINANCE FOR SEPTAGE MANAGEMENT 158
SAMPLE MOU BETWEEN WD AND LGU 169
8.2 ENVIRONMENTAL 177
8.2.1 PHILIPPINE ENVIRONMENTAL IMPACT STATEMENT (EIS) SYSTEM 177
APPLICATION PROCESS 180
APPLICATION FORM 180
FORMAT FOR PROJECT CONCEPT NOTE 198
SAMPLE LETTERS REGARDING APPROVAL OR NON-APPROVAL OF FUNDING APPLICATIONS 199
NUMBER OF FAMILIES AND FAMILY DISBURSEMENTS BY INCOME CLASS AND BY REGION AND TYPE OF
DISBURSEMENT 201
PROCUREMENT PROCESS 219
DETAILED PROCUREMENT PROCEDURES 219
DOCUMENTARY REQUIREMENTS DURING PROCUREMENT 224
SAMPLE PROCUREMENT NOTICE 226
SAMPLE LETTER OF ACKNOWLEDGEMENT OF RECEIPT 228
SAMPLE SHORTLISTING NOTICE 229
SAMPLE LETTER TO FIRMS NOT SHORTLISTED 230
SAMPLE LETTER INVITING FIRMS TO TENDER 231
OUTLINE OF TERMS OF REFERENCE 233
SAMPLE NOTIFICATION LETTER FOR SUPPLY OF W ORKS 234
SAMPLE COVER LETTER REQUESTING SUBMISSION OF SIGNED CONTRACT 235
SAMPLE FORMAT FOR NEGOTIATION REPORT 237
BUDGET AND FINANCING 238
INFORMATION ON POSSIBLE FINANCE SOURCES 238
BASIC FEATURES OF PUBLIC PRIVATE PARTNERSHIP (PPP) OPTIONS 244
ITEMS FOR REVIEW DURING EVALUATION OF PPP PROJECTS 245

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 8.1 Institutional Organization and Support

8.1.1 Tasks, Inputs, Outputs and Timing for Responsible Organizations

Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

1. Department of Sewerage Project Project Review Input: NSSMP Office See Section 3.3 regarding
Public Works and Development Support (ESSO) project design.
Highways (DPWH) Review project brief i) Project proposal/brief and business/financing plan
from LGU 1 - 3 weeks See Sections 4.5 and 6.1 on
ii) Supporting evidence (e.g. MoU with financial applications for funding.
institution)
See Section 6.1 on project
Output: financing.
i) DPWH approval or non-approval of the project (subject See the Annexes (supporting
toNSSMP
Government co-financing)
Operations Manual documents and guidelines) for
ii) If approved, budget request made by DPWH and LGU sample letters regarding
is informed of successful application approval or non-approval of
iii) If not approved, project brief is returned to LGU with funding applications.
reasons for non-approval

Project Financing Request Input: NSSMP Office See Sections 4.5 and 6.1 on
(ESSO) applications for funding.
Include approved projects in i) List of DPWH-approved sewerage projects
the DPWH budget At least annually
Output:
submission to DBM
i) Budget request to central Government

Project Financing Input: NSSMP Office See Sections 4.5 and 6.1 on
Received (ESSO) applications for funding.
i) Release of Government funds for approved projects
Distribute funds released by At least annually
Output:
DMB for approved sewerage
projects i) Disbursement of funds to project developers

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 Supporting Documents, Guidelines and Templates

Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Sewerage and Monitoring Report Input: NSSMP Office See Section 4.9 on project
Septage Management Received (ESSO) operations, performance and
Project Monitoring i) Receipt of LGU (and other) reports on sewerage/ impact monitoring.
Review project septage management projects. Depending on the Ongoing
progress/monitoring report stage of project development, these reports will cover:
received from LGUs (and a. construction progress
other relevant parties) b. funds disbursement/utilization
c. water quality
Submit summary progress d. operations metrics (customers connected, waste
report to NEDA treated, regulatory compliance, etc)
e. financial performance
f. customer satisfaction
Output:
i) Review and evaluation of reports
ii) Preparation of summary progress report for all
current/completed projects
iii) Submission of report to NEDA

Communications Provision of information to Input: NSSMP Office See Part E on communication.

partner agencies (ESSO)
i) Communications strategy
Conduct ongoing Ongoing
Output:
communications and
promotional support with i) Sanitation awareness raising
LGUs, WDs and national ii) Information exchange
government institutions

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Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Training and Provision of training and Input: NSSMP Office

Capacity Building technical support to (ESSO)
partner agencies i) Resource and/or training applications received from
LGUs/WDs/other stakeholders Ongoing
Provide training and ii) Training plan for stakeholders (developed in
knowledge dissemination to cooperation with other key agencies such as DoH,
stakeholders including DILG, LWUA, PWWA)
LGUs/WDs and national iii) Training materials developed
government institutions
Output:
i) Training courses that should include:
a. Technical aspects of sewerage and septage
management delivery
b. Project and business planning
c. Feasibility studies and financial analysis
d. Project management and monitoring
ii) Project information exchange

2. Local Sewerage and Project Concept Input: 6 - 10 weeks See Section 4.9 on project
Government Units Septage Management monitoring.
(LGUs) Project Conduct baseline i) Survey design
Implementation assessment ii) Planning and conduct of survey See the DoH “Guidebook for a
Sustainable Sanitation Baseline
Output:
Study”.
i) Completed survey
ii) Analysis and presentation of survey results

Conduct initial stakeholder Input: 2 - 4 weeks See Section 4.2 and the
consultations Annexes for guidance and
i) Stakeholder list documentation on stakeholder
ii) Meeting agenda consultation.
iii) Development of survey (as needed)
The Annexes also contain a
Output:
format for a project concept note
i) Stakeholder consultations to be used in initial consultations.
ii) Assessment of stakeholder commitment and See also Section 4.9 on project
willingness to pay monitoring.

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 Supporting Documents, Guidelines and Templates

Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Form a Technical Working Input: 2 - 4 weeks See Section 4.2 on sanitation

Group (TWG) planning.
i) Selection of preferred TWG members
See the Annexes for a sample
Output:
Executive Order establishing a
i) Invitations to join TWG (from the DoH “Guidebook
ii) Confirmation/nomination of members for a Local Sustainable
iii) Executive Order signed by Local Chief Executive Sanitation Strategy”)
iv) Inaugural meeting

Develop Local Sustainable Input: See Section 4.2 on sanitation

Sanitation Strategy (LSSS) planning.
i) Vision, goals and objectives for LSSS, using baseline
survey and consultations as a basis See the Annexes for guidance
ii) Priority sanitation issues areas for action on prioritizing sanitation issues
and areas, and a sample
Output:
resolution to adopt an LSSS.
i) LSS Plan developed See the DoH “Guidebook for a
ii) Ongoing progress monitoring of LSSP implementation Local Sustainable Sanitation
Strategy”.

Develop a project Input: 3 - 6 weeks See Section 4.3 regarding

brief/concept project design.
i) Priority projects or activities
ii) Initial evaluations (pre-feasibility) See NSSMP "Guide for Local
Implementers", and NSSMP
Output:
Toolkits
i) Initial project brief (technical, financial & organizational See DoH "Operations Manual on
summary) the Rules and Regulations
Governing Domestic Sludge and
Septage"

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Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Identify an initial financing Input: 2 - 4 weeks See Sections 4.3 and 4.4 on
approach project design and feasibility.
i) Project concept (business plan)
See Section 6.1 on project
Output:
financing.
i) Feedback from financial institutions on
willingness/ability to offer financing

Project Definition Input: 8 - 16 weeks See Section 4.4 on project

feasibility assessment.
Produce Feasibility Study i) Resources to conduct the FS
(FS) ii) Technical, financial and operational data
iii) Implementation options
Output:
i) Full Feasibility Study incorporating detailed technical
design, financial analysis, operational plans and
institutional framework

Evaluate PPP option Input: 10 - 20 weeks See Part D on project financing

and the PPP option.
i) Consideration of whether a private partner could be
sought, and the form of PPP preferred
Output:
i) Decision to commence a PPP selection process

Produce local ordinance Input: 16 - 26 weeks See the Annexes for a sample
Local Ordinance for establishing
i) Feasibility study
a septage management system
ii) Feedback from stakeholder consultation and
public hearings
Output:
i) Local Ordinance

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 Supporting Documents, Guidelines and Templates

Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Secure 30% financing share Input: 6 - 12 weeks See Section 6.1 on project
financing.
i) Feasibility Study
See the Annexes for a sample
Output:
MoU for partnering a private firm
i) Presentation to financial institutions
ii) Loan agreement (or MoU) with financial institution(s)

Apply for 40% national Input: 24 - 48 weeks See Section 6.1 on project
government grant financing.
i) Project brief/FS and business plan
See Section 4.5 on funding
Output:
applications.
i) Submission of funding application and proof of
financing to DPWH

Continue with ongoing Input: 24 - 48 weeks See Part E on communication.

stakeholder communications
i) Results of surveys to assess current knowledge,
attitudes and practices
ii) Targeted messages developed
Output:
i) Ongoing communications activities
ii) Changes in sanitation awareness and public
acceptance

Project Implementation Input: 12 - 36 weeks See Section 4.6 and Part D on

i) Implementation of procurement process procurement and financing.
Agree construction contract
(in cooperation with WD) Output: See also the Annexes for
i) Signed EPC agreement relevant documents.

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Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Obtain necessary regulatory Input: 12 - 36 weeks See the Annexes for a list of
approvals (in cooperation required documents, clearances
i) Regulatory applications and supporting information
with WD) and permits for sanitation
Output: projects.
i) Necessary permits and approvals

Authorize commencement of Input: 75 - 150 weeks See Section 4.7 on project

construction construction.
i) Construction plan
Output:
i) Commencement

Monitor development Input: 75 - 150 weeks See Sections 4.7, 4.8 and 4.9 on
progress (in cooperation project construction, operation,
i) Construction progress data
with WD) and performance and impact
ii) A comprehensive performance monitoring program monitoring.
iii) Results/findings of that program
Output:
i) Review and evaluation of monitoring program outputs
and results against performance targets
ii) Preparation of progress and evaluation reports
iii) Submission of reports to DPWH

Project handover (in Input: 2 - 4 weeks

cooperation with WD)
i) Results of site testing
Output:
i) Signed release form acknowledging satisfactory project
completion

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Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Communications Provision of information to Input: Ongoing See Part E on communication.

local stakeholders
i) Communications strategy
Conduct ongoing
Output:
communications and
promotional support with i) Increase in sanitation awareness
WDs and national
government institutions ii) Information exchange

Training and Access training in technical Input: Ongoing

Capacity Building and financial matters, and
project planning, i) Assessment of human resource skill and knowledge
development, management requirements, e.g.
and monitoring a. Wastewater engineering
b. Community consultation and surveys
c. Project/business planning and financial analysis
d. Project management and monitoring
e. Water quality monitoring and assessment
ii) Submission of resource and/or training applications to
DPWH and/or DILG
Output:
i) Training courses
ii) Project information exchange

3. Water Districts Sewerage and Assist LGU with baseline See above information for LGUs
(WDs) Septage Management assessment
Project
Implementation Conduct or participate in
initial stakeholder
consultations
Join Technical Working
Group

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Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Assist LGU with See above information for LGUs

development of Local
Sustainable Sanitation
Strategy (LSSS)
Assist LGU with ongoing
progress monitoring of LSSP
implementation

Develop project Input: 2 - 4 weeks See Section 4.3 on project

brief/concept (with LGU) design.
i) Project concept (business plan)
Identify an initial financing
Output:
approach (in consultation/
collaboration with LGU) i) Assist LGUs in discussions with financial
institutions

Project Definition Input: 8 - 16 weeks See Section 4.4 on project

feasibility assessment.
Collaborate with LGU in i) Contribute resources to conduct the FS
production of sewerage ii) Assist in gathering technical, financial and operational
Feasibility Study (FS) data
Output:
i) Full Feasibility Study

Evaluate PPP option (in Input: 10 - 20 weeks See Sections 6.1 and 6.2 on
collaboration with LGU) project financing and the PPP
ii) Consideration of whether a private partner could be option.
sought, and the form of PPP preferred
Output:
i) Assist in reaching a decision on whether to
commence a PPP selection process

Secure 30% financing share See above information for LGUs

with LGU

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Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Assist LGU in applying for Input: 24 - 48 weeks See Sections 4.5 and 6.1 on
40% national government funding applications.
grant i) Support for LGUs in preparing project brief/FS
and business plan
Output:
ii) Submission of funding application and proof of
financing to DPWH

Continue with ongoing Input: 24 - 48 weeks See Part E on communication.

stakeholder communications
program i) Results of surveys to assess current knowledge,
attitudes and practices
ii) Targeted messages developed
Output:
i) Ongoing communications activities
ii) Changes in sanitation awareness and public
acceptance

Project Implementation See above information for LGUs

Agree construction contract
(in cooperation with LGU)

Assist project to obtain Input: 12 - 36 weeks See the Annexes for a list of
necessary regulatory required documents, clearances,
iv) Regulatory applications and supporting information
approvals (in cooperation permits, etc for sanitation
with LGU) Output: projects.

ii) Necessary permits and approvals

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Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Monitor development Input: 75 - 150 weeks See Sections 4.7, 4.8 and 4.9 on
progress (in cooperation project construction, operation,
i) Construction progress data
with LGU) and performance and impact
ii) Results/findings of comprehensive performance monitoring
Assist LGU to review monitoring program
progress and monitoring
Output:
data
iv) Progress and evaluation reports
Assist LGU to prepare
evaluation reports v) Submission of reports to DPWH

Project handover (in See above information for LGUs

cooperation with LGU)

Communications Provision of information to See above information for LGUs

local stakeholders
Conduct ongoing
communications and
promotional support with
LGUs and national
government institutions

Training and Conduct training and See above information for LGUs
Capacity Building knowledge dissemination

4. Department of Septage Project Project Concept Input: DoH Central and See Section 4.3 on project
Health (DoH) Implementation Regional Offices design.
Assist LGUs/WDs with i) Contributions to survey design
baseline assessment (e.g. ii) Assistance with conduct of surveys Ongoing
through financial support for
Output:
surveys from regional
offices) i) Completed baseline surveys

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Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Monitor program Input: DoH Central and See Section 4.9 on project
performance (in cooperation Regional Offices performance and impact
with LGUs/ WDs, and i) Guidance and assistance to units/agencies monitoring.
LDWQMCs) conducting drinking water quality monitoring and Ongoing
sanitation surveys, and collecting data on water-
related illness 75 - 150 weeks
ii) Results of monitoring program and surveys
Output:
i) Review and evaluation of monitoring and
survey data
ii) Assistance to LGUs in preparing evaluation
report

Communications Provision of information Input: DoH Central and See Part E on communication.
through regional DoH Regional Offices
offices to LGUs/ i) Communications strategy
WDs/others Ongoing
Output:
Ongoing communications, i) Increase in awareness of health impacts of
information exchange and improved sanitation
promotional support with
implementers and ii) Information exchange
stakeholders

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Organization Task Sub-Tasks Inputs & Outputs Unit Involved & Links & Documentation
Timing/Duration

Technical Support , Provision of training and Input: DoH Central and

Training and technical support by Regional Offices
Capacity Building regional DoH offices to i) Resource and/or training applications received from
LGUs/WDs/ others LGUs/WDs/other stakeholders Ongoing
ii) Training plan for stakeholders (developed in
Provide training and cooperation with other key agencies such as DPWH,
knowledge dissemination to DILG, LWUA, PWWA)
implementers and iii) Training materials developed
stakeholders
Output:
Provide technical support to
i) Training courses that should include:
LGUs/WDs through
a. Technical aspects of sewerage and septage
wastewater engineers
management
located in regional offices
b. Project planning/feasibility studies
c. Financial analysis
d. Project management
e. Water quality monitoring
ii) Project information exchange

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Organization Task Sub-Task Input / Output & Timing Dept. Involved & Links &
Timing Documentation

1. Department of Sewerage and Septage Project Review Input: DENR central See Sections 4.2 and
Environment and Management Project office 4.3 on project planning
Natural Resources Development Support Review water quality data to i) Water quality data and design.
(DENR) and identify need/priority for ii) WQMA Action Plan EMB regional
Environmental sanitation infrastructure iii) Technical support to LGUs for offices See Section 4.9 on
Management Bureau project selection and preparation of project performance
Enforce CWA provisions project brief WQMAs and impact monitoring.
(EMB) requiring sewerage and
septage management Output: Ongoing

Implement permitting system i) Project brief prepared by LGUs

and enforce effluent standards
Develop WQMA Action Plans

Sewerage and Septage Progress Reporting Input: DENR central See Sections 4.8 and
Management Project Monitoring office 4.9 on project
Assist LGUs/WDs, DoH and i) Performance data and information operation, and
other agencies to monitor and on projects from LGUs/WDs, EMB EMB regional performance and
evaluate the progress and and other agencies offices impact monitoring.
performance of NSSMP a. Water quality and effluent data
sanitation projects b. Operations metrics and WQMA
compliance data Ongoing
Obtain project progress
reports from regional EMB Output:
offices and WQMAs on the
impact of sanitation projects i) Review and evaluation of monitoring
on water quality and other and performance data
environmental concerns ii) Assistance to LGUs in preparing
evaluation reports

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Organization Task Sub-Task Input / Output & Timing Dept. Involved & Links &
Timing Documentation

Communications Provision of information to Input: DENR central See Part E on

partner agencies office communication.
i) Communications strategy
Ongoing communications, EMB regional
Output:
information exchange and offices
promotional support with i) Increase in awareness of impacts of
implementers and WQMA
improved sanitation on
stakeholders environmental factors Ongoing
ii) Improvements in water quality (and
other environmental factors)

Training and Capacity Building Provision of training Input: DENR central

support to partner agencies office
i) Resource and/or training
Provide training and applications received from LGUs/ EMB regional
knowledge dissemination to WDs/ other stakeholders offices
implementers and ii) Training plan for stakeholders
stakeholders (developed in cooperation with other WQMA
key agencies such as DPWH, DILG, Ongoing
LWUA, PWWA)
iii) Training materials developed
Output:
i) Training courses that should include:
a. Links between sanitation and the
environment
b. Technical aspects of sewerage
and septage management
c. Water quality monitoring and
assessment
d Feasibility studies and financial
analysis

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Organization Task Sub-Task Input / Output & Timing Dept. Involved & Links &
Timing Documentation

2. Department of Interior Sewerage and Septage Project Concept Input: DILG, LWUA ,
and Local Government Management Project LoC and PAWD
(DILG), Local Water Development Support Provide technical support and i) Advice on household survey, regional offices
Utilities Administration guidance (and, in the case of technology options, etc.
(LWUA), LoC & PAWD LWUA and DILG, possibly ii) Possible provision of financial Ongoing
also financial assistance) to support
LGUs/WDs in relation to
Output:
baseline assessments and
LSSS development i) Initial project concept/design

Progress Reporting Input: DILG, LWUA , See Sections 4.7, 4.8

LoC and PAWD and 4.9 on project
Project progress report i) Receipt of data and information on regional offices construction,
received from regional offices project progress from LGUs/WDs. operation, and
concerning sanitation project Ongoing
Output: performance and
development impact monitoring.
Obtain project progress i) Review and evaluation of data
reports from regional offices ii) Assistance to LGUs in preparing
on sanitation project evaluation reports
iii) Summary progress reports on all
development
ongoing/completed projects to DILG
central office/ LWUA /LoC offices

Communications Provision of information to Input: DILG, LWUA , See Part E on

LGUs/WDs LoC and PAWD communication.
i) Communications strategy regional offices
Ongoing communications,
Output:
promotional support and Ongoing
information exchange with i) Increase in sanitation awareness
local implementers

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Organization Task Sub-Task Input / Output & Timing Dept. Involved & Links &
Timing Documentation

Training and Capacity Building Provision of training to Input: DILG, LWUA ,

LGUs/WDs LoC and PAWD
i) Resource and/or training
regional offices
Provide training and applications received from LGUs/
knowledge dissemination to WDs Ongoing
implementers ii) Training plan for stakeholders
(developed in cooperation with other
key agencies such as DPWH, DoH,
DENR, PWWA)
iii) Training materials developed
Output:
i) Training courses that should include
a. Links between sanitation and the
environment
b. Technical aspects of sewerage
and septage management
c. Water quality monitoring and
assessment
ii) Project information exchange

3. Department of Sewerage and Septage Project Financing Inputs: DoF central office See Part D on project
Finance (DoF) Management Project financing.
Implementation Support the funding of i) Applications for funding of projects At least annually
sanitation projects approved by DPWH
ii) Financial resource mobilization and
fiscal management (ensure DBM has
resources to meet DPWH requests)
Output:
i) Monitoring of fund utilization
ii) Adjustments to funding as necessary

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Organization Task Sub-Task Input / Output & Timing Dept. Involved & Links &
Timing Documentation

4. Metropolitan Sewerage and Septage Project Concept Input: MWSS central See Sections 4.2 and
Waterworks and Management Project office 4.3 on project planning
Sewerage System Development Support Provide technical support and i) Request from LGU/WD for advice on and design.
(MWSS) guidance to LGUs/WDs in household survey, technology Ongoing
relation to baseline options, infrastructure development,
assessments, client surveys etc.
and sanitation strategy
Output:
development
i) Initial project concept/design
ii) Project management and
implementation practices

5. Department of Communications Provision of information to Input: DepEd central See Part E on

Education (DepEd) LGUs/WDs and regional communication.
i) Communications strategy offices
Ongoing communications,
Output:
information exchange and Ongoing
promotional support in relation i) Increase in awareness of NSSMP
to NSSMP implementation program and sanitation issues
with LGUs/WDs

6. Donor Agencies Sewerage and Septage Project Concept Input: Donor water &
Management Project sanitation teams
Development Support Provide technical support and i) Requests from implementers for
guidance plus financial technical assistance in relation to Ongoing
assistance to LGUs/WDs in project development, and financial
relation to baseline support for baseline and feasibility
assessments and sanitation studies, capital development, etc.
strategy development
Output:
i) Project design and development

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Organization Task Sub-Task Input / Output & Timing Dept. Involved & Links &
Timing Documentation

Communications Provision of information to Input: Donor water and See Part E on

LGUs/WDs sanitation teams communication.
i) Communications strategy
Provide technical support and Ongoing
Output:
guidance plus financial
assistance to LGUs/WDs to i) Increase in awareness of NSSMP
design and implement program and sanitation issues
communications, information
exchange and promotional
programs in relation to
NSSMP implementation

Training and Capacity Building Provision of training Input: Donor water and
support to LGUs/WDs sanitation teams
i) Resource and/or training
Provide technical support and applications from LGUs / WDs Ongoing
guidance plus financial ii) Training plan for stakeholders
assistance to LGUs/WDs for iii) Training materials developed
training and knowledge
Output:
dissemination in relation to
sewerage and septage i) Training courses as required
infrastructure development
ii) Information exchange

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8.1.2 Sample Baseline Survey Form

1. Please insert the appropriate BOD / DO average concentration figures for all the water bodies (i.e. rivers,
bays, lakes) in the vicinity of your HUC.

Name of Water Body BOD (2010) DO (2010) BOD (2011) DO (2011)

1.

2.

3.

2. Please indicate ( / X) which of the following factors has a significant presence in your HUC.

Tourist Industry Fishing Industry Mangroves Coral Aquifer

3. Please indicate ( / X) whether any of the following plans have been developed for your HUC.

Sanitation Plan as part of the Municipal Feasibility Study(s) for Sanitation Asset Sanitation related
Development Plan Development Ordinance

4. Has your HUC made any funding allocation for sanitation (i.e. septage / sewerage) asset development? If
so, how much has been allocated?

Sanitation Budget Funding Allocation (2011) Funding Allocation (2012)

YES / NO

5. Please complete the following table in relation to your HUC.

Population Per Capita Income (Php)

6. Please complete the following table in relation to sanitation (i.e. septage / sewerage) assets in your HUC.

Waste Treatment Facilities Septage Collection Trucks Sewerage Septage Tank

Network

Number Total Capacity Number Total Capacity Km % population with tank

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7. Please complete the following table in relation to the Water District(s) and LGUs present in your HUC.

LGU / WD Name LGU Fund Balance WD Profitability Internal WD Cost Control WD Outstanding Loans
Available Cash Ratio Operating Ratio as of December 2010

8. In relation to sanitation asset development, please indicate ( / X) which (if any) of the following
statements is true.

We would be interested in partnering with a private company We have already spoken with a private company in relation to
to finance / operate sanitation assets water / sanitation asset development

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8.1.3 Prioritization of Sanitation Needs

Instructions: Based on all of the information and inputs gathered (e.g. baseline data, and discussions with
elected officials, stakeholder consultations and TWG discussions), rank each statement from 1 to 5 with 1
being the least important and 5 being the most important. Add the total score for each section heading (e.g.
'Septage Management') and compare the section scores to determine priority rankings.
[Note: this approach could also be used in stakeholder consultation exercises]

Ranking
Toilets
 Informal settlers have inadequate access to toilets, resulting in open defecation 0
 Informal settlers are located on riverbanks or shorelines 0
 Community members report open defecation is occurring 0
 There are inadequate public toilets resulting in open defecation 0
Total 0
Non-Point Sources
 Pit toilets or Antipolo style latrines are common (polluting groundwater) 0
 Open bottom septic tanks are common (polluting groundwater) 0
 Soil erosion during heavy rains muddies rivers and streams 0
 Manure from animal farms is discharged directly to streams and rivers 0
Total 0
Point Sources
 Restaurants do not remove grease by using commercial grease traps 0
 Wastewater discharges from public markets do not meet DENR standards 0
 Wastewater discharges from slaughterhouses do not meet DENR standards 0
 Wastewater discharges from hospitals do not meet DENR standards 0
Total 0
Septage Management
 There are no programs to ensure septic tanks are properly designed 0
 Septic tanks are not routinely desludged every 3 to 5 years 0
 There is no proper septage treatment facility within one hour's drive of the LGU 0
 Septage is being improperly discharged on agricultural land or in streams 0
Total 0
Sewerage
 There are urban areas without adequate drainage systems 0
 Septic tank effluent discharges to open drains 0
 Wastewater from drainage outfalls is not treated 0
 New housing development uses septic tanks only 0
Total 0
Ecological Sanitation
Most households have private farms or gardens where waste-derived fertilizer could be useful 0

The LGU has the ability to sustain projects through continuous training or financial inputs 0

There is a lack of water for pour-flush toilet systems 0

Open defecation is a problem in the LGU 0
Total 0

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8.1.4 Guidance on Stakeholder and Partner Consultation

Why the need for partner consultation?
Consultation with partners and stakeholders gives you the opportunity to discuss ways to maximize benefits
based on their expressed needs, experience and feedback. Consultation also allows all parties to understand
the potential impacts of a proposed activity (project or program) on the community. It is also a good
opportunity to identify the key players and stakeholders in your activity, discuss with them their likely roles,
organize them, and prepare them to participate proactively in your planned program o project.
What does a consultation framework look like?
Your consultation will most likely involve the following:
1. Consultation with voluntary and community sector stakeholders at the earliest opportunity, on all issues
likely to affect them.
2. Consideration of the availability of resources to allow partners to engage in the consultation process.
Remember that everyone’s contribution is important.
3. Adherence to a consultation timeframe, i.e. a minimum period for responses to be given (timing will also
depend on the extent of work or areas of coverage involved).
4. Preparation of consultation documents that are clear, concise and in simple language (it is better to use
the local language/dialect).
5. Analysis of responses received and appropriate feedback, showing in clear terms the impact of the
consultation process on the activities to be implemented.
6. Evaluation of all consultations undertaken with a view to identifying and adopting good or best practices.
What are the expected roles of partners?
Partner consultation is a gathering of minds and efforts. Everyone is expected to do or contribute something to
make the partnership meaningful and effective.
The objective is to develop consensus and clarity on an appropriate way forward for implementing a sanitation
strategy or a particular project.

What are the methods to be used in partner consultation?

There are many ways to conduct your partner consultation. There is no "perfect formula". Partners need to
consider the needs of those to be consulted and apply the most appropriate method. In addition to the tried
and tested methods of distributing questionnaires, focused group discussions or barangay forums, other
modes can still be considered.
Using more than one method is usually a good idea. Wherever possible, a consultation should start with a
background session on the activity or program to be implemented, outlining in short presentations what and
who are involved. The timelines and contact persons or institutions should also be made available.
An open forum or Q&A session should always follow. Always avoid a "Yes/No" format of questioning. Honesty
and openness should be promoted at every opportunity. Stakeholders should be encouraged to offer all their
views and be given details of how and when feedback will be given.
Who should be consulted?
The easy answer is to say that this includes all stakeholders who are expected to benefit from, work for, or be
affected by the proposed program or activity. For example, if a baseline study is being conducted, it is
desirable to involve all Government agencies and NGOs involved in health, sanitation and environment, as
well as private sector service providers such as water utilities, hospitals, scientists and technical/engineering
consultants.
Consultations need to be relevant to all of the stakeholders in the community, so it is wise to publicize
upcoming consultations widely and seek the help of local groups in identifying potential partners.

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8.1.5 List of Potential Stakeholders

A wide range of stakeholders may need to be consulted as part of the process of developing a sustainable
sanitation strategy and implementing specific sanitation projects. The list below is designed to illustrate the
kinds of organizations, groups and individuals who may need to be targeted.
A. Community Level:
a. BHW
b. Barangay Kagawad for Health/Environment
c. Barangay Captains
d. Mothers with child/children below 5 years of age
e. Leaders of Barangay Youth Organizations

B. Institutions
a. Influential people at local/barangay level
 Church leaders
 NGO leaders
 People’s Organizations
 Public teachers
 Businessmen
 Hospitals/clinics
b. Businessmen (e.g. resort and fish pen owners, commercial establishments,
major restaurants and eateries, etc)

C. LGUs
a. Mayor
b. Adviser to the Mayor
c. Members of the City/Municipal Council
d. Municipal/City Engineer
e. SP/SB Health/Environment
f. Sanitary Inspectors
g. Inter-agency specialists
 Health officers
 Agriculture officers
 Engineers
 Information officers
 Market administrator
 Environment officers
 Water District officers
 DSWD officers
 School superintendents
 SK Federation

D. Other key stakeholders/informants:

a. Residential building contractors

b. Doctors
c. Influential Businessman
d. Environmental activists
e. Supplier of sanitation equipment/facilities
f. Septic tank desludgers
g. Youth leaders

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8.1.6 Sample Executive Order Establishing a TWG

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8.1.7 Feasibility Assessment Tasks and Documentation

The Table below summarizes the organisations involved in the Project Feasibility process together with
associated project inputs, outputs and supporting documentation.

Org’n Task Description Input / Output & Timing Timing Links & Documentation
1. LGU Conduct baseline Input: See sample survey
assessment iii) Refer to Guidebook for a Sustainable 6 – 10 form (Annex)
Sanitation Baseline Study weeks
iv) Survey design Use DoH’s “Guidebook
v) Carry out survey for a Sustainable
Output: Sanitation Baseline
iii) Completed survey Study”
iv) Analyse and present survey results
Initial stakeholder Input: See stakeholder
consultation iv) Stakeholder list 2 – 4 weeks consultation guidance
v) Meeting(s) agenda (Annex)
vi) Develop survey (as needed)
Output:
iii) Stakeholder consultation(s)
iv) Indication of stakeholder commitment
v) Indication of willingness to pay
Form Technical Working Input: See sample Executive
Group (TWG) ii) Potential group member list 2 – 4 weeks Order establishing the
iii) Invitations to join TWG distributed TWG that also contains
Output: a suggested Group
v) TWG members confirmed membership list
vi) Executive Order signed by Local Chief (Annex)
Executive confirming TWG membership
vii) Initial TWG meeting held
Develop Local Sustainable Input: See guidance on
Sanitation Strategy (LSSS) iii) Produce vision, goals and objectives for 6 – 10 prioritizing sanitation
LSSS using Baseline Survey as a basis weeks needs, and sample
iv) Translate strategy into action resolution for LSSP
Output: adoption (Annexes)
iii) LSS Plan developed
iv) Carry out progress monitoring of LSSP See DoH “Guidebook
for a Local Sustainable
Strategy”

2. WD Assist with baseline Input: See sample survey

assessment i) Refer to Guidebook for a Sustainable 6 – 10 form (Annex)
Sanitation Baseline Study weeks
ii) Contribute to survey design Use DoH’s “Guidebook
iii) Assist with survey for a Sustainable
Output: Sanitation Baseline
i) Completed survey Study”
ii) Analyse and present survey results
Initial stakeholder Input: See stakeholder
consultation i) Help develop stakeholder list 2 – 4 weeks consultation summary
ii) Help design consultation survey (as (Annex)
needed)
Output:
i) Stakeholder consultation(s)
ii) Indication of stakeholder commitment
iii) Indication of willingness to pay
Join Technical Working Input: See sample Executive
Group (TWG) i) Commit to join TWG 2 – 4 weeks Order establishing the
Output: TWG that also contains
i) Initial TWG meeting held a suggested Group
membership list
(Annex)

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Org’n Task Description Input / Output & Timing Timing Links & Documentation
Assist with development of Input: See guidance on
Local Sustainable i) Assist in production of vision, goals and 6 – 10 prioritizing sanitation
Sanitation Strategy (LSSS) objectives for LSSS using Baseline Survey weeks needs, and sample
as a basis resolution for LSSP
ii) Help translate strategy into action adoption (Annex 8.4.3
Output: and 8.4.4)
i) LSS Plan developed
See DoH “Guidebook
ii) Assist with progress monitoring of LSSP
for a Local Sustainable
Strategy”

3. DoH Assist LGUs / WDs with Input: See sample survey

baseline assessment which iii) Contribute to survey design Ongoing form (Annex)
could include financial iv) Assist with survey
support provided through v) Provide financial support
regional DoH offices to Output:
help fund survey ii) Completed survey
4. DENR & DENR water quality data Input:
WQMAs provides support for need iv) Water quality data Ongoing
for sanitation infrastructure v) WQMA Action Plan
development (i.e. DENR vi) Technical and (possibly) funding support to
enforces CWA provisions LGUs
requiring development of Output:
sewerage and septage ii) Sanitation project brief prepared by LGUs
management)

WQMA Action Plan

contains sanitation
development requirements
that LGUs translate into
proposals
5. DILG , Provide technical support Input:
LWUA, and guidance (and, in the iii) Advice on household survey, technology Ongoing
LoC & case of LWUA and DILG, options, etc.
PAWD possibly also financial iv) Possible provision of financial support
assistance) to LGUs / WDs Output:
in relation to baseline ii) Project Concept
assessment and sanitation
strategy development
6. MWSS Provide technical support Input:
and guidance to LGUs / ii) Request from LGU / WD for advice on Ongoing
WDs in relation to baseline household survey, technology options,
assessment and sanitation infrastructure development, etc.
strategy development Output:
iii) Project concept
iv) Project implementation
7. Donor Provide technical support Input: Donor
Agencies and guidance plus financial ii) Technical assistance in relation to sewerage water &
assistance to LGUs / WDs / septage project development sanitation
in relation to baseline iii) Financial support for surveys, feasibility teams
assessment and sanitation studies, monitoring, capital development,
strategy development etc. Ongoing
Output:
ii) Sanitation project design and development

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8.1.8 List of Required Documentation, Permits and Clearances

The main forms of documents and regulatory approvals and permits required to implement a septage
management or sewerage project are summarized in the following table below.

Document Description

1 Sanitation Plan A document produced by each LGU that sets out its strategy with respect to sanitation
infrastructure development and service delivery.

2 Local Ordinance Sets out the sanitation rationale, user fees, operation, management and penalties for the
locality.

3 Feasibility Study and Single or separate documents that set out the technical and financial specifications for the
Business Plan design, construction and operation of the sanitation infrastructure.

4 Memorandum of Where a partnership is proposed, such as between a city government and a utility
Understanding (MoU) builder/operator, a MoU is needed to set out the obligations and responsibilities of all parties,
e.g. billing, collection, operations management, fee sharing, etc.

5 Loan Agreement(s) This is the contract signed between the project owner(s) and the bank(s) providing loans to
(partly) finance the project

6 Building/Occupancy Permit These are ancillary regulations that relate to the nature and amount of sewerage/septage
produced by different dwellings

7 Sanitation Code These are design and construction regulations relating to septic tanks and other sanitation
infrastructure development

8 Discharge Standards The sludge and septage treatment processes as well as the disposal of treated sludge and
septage are prescribed in the DoH Operations Manual (2008)6.

Wastewater generated by a treatment facility and discharged into water bodies must comply
with DENR effluent standards under the Clean Water Act.

9 Environmental Permit(s) and An Environmental Sanitation Clearance must be secured by the project proponent from the
other regulations Centre for Health Development (CHD) of the DoH. In addition, an Environmental Compliance
Certificate and Discharge Permit must be obtained from DENR for proposed waste treatment
facilities.

10 Building Code and Sanitation The technical specifications and design of septic tanks and septage infrastructure must
Code comply with the Sanitation and Building Codes.

11 LWUA Exemption Water Districts that have existing loans with LWUA are required to obtain a waiver from
LWUA before they can avail of loans from other lenders.

12 TWG & Community Successful projects will typically have a TWG established to oversee the project and assist
Participation Mandate with its implementation, as well as some formal community engagement process.

13 Capacity Building Plan A Training Needs Assessment should be carried out during the project feasibility stage to
assess the skills and capabilities needed for effective operation of a sanitation project, and
the extent of capacity building required for facility staff and local officials.

6
Department of Health. 2008. Operations Manual on the Rules and Regulations Governing Domestic Sludge and Septage.

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8.1.9 Sample Resolution for Adopting a Local Sustainable Sanitation Plan

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8.1.10 Sample Ordinance for Septage Management

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8.1.11 Sample MoU between WD and LGU

MEMORANDUM OF UNDERSTANDING

KNOW ALL MEN BY THESE PRESENT:

This Agreement made and entered into by and between:

The XXX Local Government Unit (LGU), with office address at XXX, represented herein by its Mayor, XXX,
hereinafter referred to as the “XXX LGU”

- And -

The YYY Water District, a government-owned and-controlled corporation, with office address at XXX,
represented herein by its General Manager, YYY, hereinafter referred to as the “YYY WD”

WITNESSETH, that:

WHEREAS, under the National Sewerage and Septage Management Program (NSSMP), the
Government of the Philippines is prepared to provide funding support to qualified Highly Urbanised Cities
(HUCs) to help defray the capital costs associated with sewerage infrastructure development;

WHEREAS, under the Clean Water Act, water utilities in highly urbanized areas such as the YYY WD,
in coordination with local government units, are required to connect existing sewage lines to available
sewerage systems;

WHEREAS, in areas where there are no sewerage systems, water utilities may adopt a sanitation
improvement program that will regularly remove septage to increase the wastewater treatment performance of
septic tanks;

WHEREAS, the XXX LGU and YYY WD, in cooperation, plan to develop a [sewerage / combined
sewerage and septage / combined sewerage and drainage] project with the following objectives:
 Provide efficient and affordable sewerage services to XXX LGU residents and YYY WD
customers that will reduce pollution attributed to untreated septage discharges or overflows
from businesses and households;
 Comply with all existing local and national environmental laws and regulations on effluent and
sludge disposal by the construction and operation of efficient sewerage network and treatment
plants; and
 Improve water quality, sanitation and public health conditions to enhance economic
productivity in the general areas of YYY WD and its neighboring municipalities;

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NOW, THEREFORE, for and in consideration of the foregoing premises, the parties herein agree to
work together for the implementation of the sewerage project through the following undertakings:

A. The XXX LGU shall:

Technical

1. Develop a local Sanitation Plan for the XXX LGU that incorporates a Project Brief for this
proposed development in accordance with the template included in the NSSMP Program
Operations Manual (POM).
2. Assist the YYY WD in preparing a Feasibility Study for the project and provide any financial
support required as well as all necessary information and data.
3. Assist the YYY WD in undertaking a Willingness to Pay Study for the project and provide any
financial assistance required as well as all necessary logistical support and data.
4. Assist the YYY WD in completing any other studies required to support the implementation of
this project.
5. Provide all necessary support to ensure that the required permits, certificates and other
documentation are secured in a timely manner to help implement the project within the expected
timeframe.

Capital Finance

1. Agree to provide Ps. (XX% of the total project cost) in the form of equity and debt to
help co-finance the project. The breakdown of this finance support is as follows:
a. Loans
[define total loan amount and its composition, terms and conditions]
b. Equity
[define total equity amount and its nature, terms and conditions]
Disbursement and sharing of this loan and equity contribution with YYY WD shall be in
accordance with the terms of a project financing agreement drawn up between and signed by
the parties in relation to this project.
2. Agree to provide an in-kind contribution to the project in the form of land on which assets can be
located, access roads to project sites as well as other forms of equity input.
3. Submit a project financing application to the Department of Public Works and Highways (DPWH)
in order to secure NSSMP funding support for the project.
Disbursement and sharing of this NSSMP contribution with YYY WD shall be in accordance with
the terms of a project financing agreement drawn up between and signed by the parties in
relation to this project.

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Operational Finance

1. Undertake all steps necessary to ensure that approval is granted for the implementation of the
tariff calculated to be necessary to support the financing of the project.
2. Provide all assistance necessary to ensure that implementation of these tariff arrangements is
carried out in accordance with the project financing agreement.
3. Assist by all means possible with the collection of tariff payments owed by businesses and
households.
4. Comply with the terms of the project financing agreement in relation to the mechanism for the
sharing of collected tariff revenues between the XXX LGU and YYY WD.

Administrative

1. Ensure that an Ordinance in support of the project is passed in a timely manner (i.e. before the
NSSMP project application is submitted). This Ordinance must contain all of the provisions
necessary to enable the project to be implemented in an efficient and financially self-sustainable
manner. These provisions will include, but not be limited to:
a. Implementation of a sanitation-related tariff that will enable the project’s capital and
operational costs to be recovered.
b. The requirement for all XXX LGU households and businesses planned to be covered by
the development to pay for a connection to the infrastructure and to pay all ongoing
relevant tariffs and charges.
c. The necessary authority for staff and employees of YYY WD to access and enter
business and household premises in order to facilitate implementation and operation of
the project.
2. Assist by all means possible in ensuring that applications for all necessary permits, orders and
administrative certificates related to the project are made and, if all related conditions are met,
are promptly approved.
3. Ensure that all necessary changes are made in relation to city planning and land qualification to
enable project development.
4. Establish a Technical Working Group (TWG) that shall be responsible for procuring, managing
and overseeing the implementation of the project. The TWG shall be comprised of
representatives from XXX LGU, YYY WD and other agencies and interest groups as deemed
necessary by the XXX LGU.
5. Setting up a project specific joint bank account with nominated representatives from XXX LGU
and YYY WD as account signatories. All monies raised in relation to the development and
operation of the project shall be transmitted through this dedicated account.
6. Carry out all other necessary administrative arrangements as may be necessary to facilitate
implementation of the project.

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Communications

1. Conduct a comprehensive and ongoing public communications campaign in accordance with the
framework set out in the POM in support of the project. The goal of this campaign should be to
help secure public support for the project and to ensure that all businesses and households in
XXX LGU understand and are aware of the justification for and importance of the project.

Monitoring and Inter-Agency Cooperation

1. Gather, collate and report all information and data requested by the DPWH in relation to the
project to support NSSMP monitoring activities in a timely fashion.
2. Support, inform and cooperate with other agencies such as the Department of Health (DoH),
Department of Environment and Natural Resources (DENR), the Local Water Utilities
Administration (LWUA) and the Department of Interior and Local Government (DILG), as and
when required for the effective implementation of the Program.

Other

B. The YYY WD shall:

Technical

1. Assist the XXX LGU in developing a local Sanitation Plan that incorporates a Project Brief for
this proposed development in accordance with the template included in the POM.
2. Take the lead in preparing a Feasibility Study for the project which must include all technical,
operational, financial, organizational, communications and administrative elements necessary to
fully evaluate the project.
3. Take the lead in undertaking a Willingness to Pay Study for the project and provide any financial
assistance required as well as all necessary logistical support and data.
4. Take the lead in completing any other studies required to support the implementation of this
project.
5. Ensure that all required permits, certificates and other documentation are secured in a timely
manner to help implement the project within the expected timeframe.
6. Take responsibility for supervising and managing the construction of the project.

7. Once completed, manage and operate the sanitation infrastructure assets for a period of
years;

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Capital Finance

1. Agree to provide Ps. (XX% of the total project cost) in the form of equity and debt to
help co-finance the project. The breakdown of this finance support is as follows:
a. Loans
[define total loan amount and its composition, terms and conditions]
b. Equity
[define total equity amount and its nature, terms and conditions]
Disbursement and sharing of this loan and equity contribution with XXX LGU shall be in
accordance with the terms of a project financing agreement drawn up between and signed by
the parties in relation to this project.
2. Assist the YYY LGU in submitting a project financing application to the DPWH in order to secure
NSSMP funding support for the project.
Disbursement and sharing of this NSSMP contribution with XXX LGU shall be in accordance
with the terms of a project financing agreement drawn up between and signed the parties in
relation to this project.

Operational Finance

1. Undertake all steps necessary to ensure that approval is granted for the implementation of the
tariff calculated to be necessary to support the financing of the project.
2. Provide all assistance necessary to ensure that implementation of these tariff arrangements is
carried out in accordance with the project financing agreement.
3. Assist by all means possible with the collection of tariff payments owed by businesses and
households including, if applicable, the proportion of the water bill allocated for sanitation cost
recovery.
4. Comply with the terms of the project financing agreement in relation to the mechanism for the
sharing of collected tariff revenues between the XXX LGU and YYY WD.

Administrative

1. Provide all necessary support to assist the XXX LGU to pass an Ordinance in support of the
project in a timely manner (i.e. before the NSSMP project application is submitted).
2. Provide all necessary support to the XXX LGU to help ensure that applications for all necessary
permits, orders and administrative certificates related to the project are made and, if all related
conditions are met, are promptly approved.
3. Work with the XXX LGU in establishing a TWG and then fully participate in the operation of the
Group so as to help ensure it acts as an effective manager of project implementation.
4. Assist the XXX LGU in setting up and managing a project specific joint bank account. All monies
raised in relation to the development and operation of the project shall be transmitted through
this dedicated account.

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5. Carry out all other necessary administrative arrangements as may be necessary to facilitate
procurement and implementation of the project.

Communications

1. Work with the XXX LGU in conducting a comprehensive and ongoing public communications
campaign in accordance with the framework set out in the POM in support of the project. The
goal of this campaign should be to help secure public support for the project and to ensure that
all business and households in XXX LGU understand and are aware of the justification for and
importance of the project.

Monitoring and Inter-Agency Cooperation

1. Gather, collate and report all information and data requested by the DPWH in relation to the
project to support NSSMP monitoring activities in a timely fashion.
2. Support, inform and cooperate with other agencies such as the DoH, DENR, LWUA and DILG,
as and when required for effective implementation of the NSSMP.

Other

IN WITNESS WHEREOF, the parties have hereunto set their hands this day of
20XX in .

XXX LGU YYY WD

By: By:

Mayor General Manager

SIGNED IN THE PRESENCE OF:

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ACKNOWLEDGEMENT

REPUBLIC OF THE PHILIPPINES)

) S.S.

BEFORE ME, this day of , 20XX, personally appeared:

NAME PASSPORT NO. DATE &/PLACE ISSUED

Known to me and to me known to be the same persons who executed the foregoing instrument and
acknowledged to me that the same is their free and voluntary act and deed and the voluntary act and deed
that of the entities they represent.

WITNESS MY HAND AND SEAL on the date and place above written.

NOTARY PUBLIC

Doc No.:
Page No.:
Book No.:
Series of 20XX.

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PROJECT FINANCING AGREEMENT

This document will be project specific and will therefore vary according to the nature and scale of the
development as well as the outcome of the negotiations between the LGU and WD with respect to how the
project shall be financed.
The Agreement must as a minimum, however, contain the following elements:
1. Agreement on the sharing of capital cost between the project partners.
2. Agreement on how project financing will be obtained and its subsequent disbursement between
project partners during the project development process.
3. Agreement on how operations, maintenance, debt financing and other ongoing costs will be financed
(e.g. through a sanitation tariff increment to water bills, through a dedicated environmental fee,
through local taxes, etc.) and how these financing arrangements will be managed between the project
partners (i.e. who will be responsible for collection and disbursement of revenues related to this
project).

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8.2 Environmental

8.2.1 Philippine Environmental Impact Statement (EIS) System

Philippine Environmental Impact Statement (EIS) System

A. Legislative Framework
The Environmental Impact Statement (EIS) System in the country originated in 1977 with the promulgation of
Presidential Decree (PD) 1151, known as the Philippine Environmental Policy. This decree established the
requirement for all proponents, including those in the public and private sectors, to prepare an EIS for any
proposed action, project or undertaking that may significantly affect the quality of the environment.
PD 1586 as promulgated in 1978 strengthened the EIS system by providing for the centralized administration
of the system and other environmental management measures. It also gave the concerned authority the ability
to assess penalties for non-compliance with the system.
DENR Administrative Order 21, Series of 1992 (DAO 1992-21) amended the Revised Implementing Rules and
Regulations for PD 1586 by streamlining the EIS system while strengthening the process of its
implementation. DAO 1996-37 further strengthened the EIS system and was designed to ensure that EIS
occurs early in the project cycle. Moreover, DAO 1996-37 guarantees enhanced public participation in the EIS
process. Furthermore, DAO 2000-05 established EIS Programmatic Compliance for projects subdivided into
several phases and/or co-located projects in a designated area.
To facilitate the implementation of the EIS System, a Revised Procedural Manual of DAO 2003-30 was issued
as quick reference for project proponents and concerned government agencies. The Manual integrates the
new DENR-EMB policies of promoting EIA as a planning and decision-making tool, foremost of which is
segregating the EIA process from the practice of prior submission of permits, clearances, licenses,
endorsements, resolutions and other government approvals which could pre-empt the EIA evaluation process.
It also simplified requirements by presenting application and review procedures in process flowcharts,
tabulating all requirements with pro-forma documents for easy compliance.
Lastly, DENR Memorandum Circular No. 14 was issued in 2010 (DENR MC 2010-14). This is also known as
the Standardization of Requirements and Enhancement of Public Participation in the Streamlined
Implementation of the Philippine EIS System. The purpose of this regulation is to adopt an efficient,
transparent, systematic and participatory implementation of the EIS System under PD 1586.

B. Coverage of the EIS System

Projects falling under the category of environmentally critical projects (ECPs) and/or located in environmentally
critical areas (ECAs) are covered by the EIS system. The four (4) main categories of ECPs are (1) heavy
industries; (2) resource extractive industries; (3) infrastructure projects and (4) golf course projects. On the
other hand, there are 12 main categories of ECAs which are based on the physical/topographical, biological,
climatological, land use, historical, and/or national importance characteristics.
The septage and sewerage projects under the NSSMP are not classified as ECP but most would probably be
located in ECAs such as watershed reserves or aquifer recharge areas and/or near waterbodies. Thus, these
will be covered by the EIS system and will require an Environmental Compliance Certificate (ECC). The type
of document to be submitted to the DENR-EMB Regional office with the ECC application will depend on the
operating capacity of the domestic Wastewater Treatment Facility (WWTF). For WWTFs with an operating
capacity of < 5,000 m 3/day, an Initial Environmental Examination (IEE) is required while an Environmental
Impact Statements (EIS) is applicable if the WWTF has a capacity of ≥ 5,000 m 3/day. The IEE is an
abbreviated version of the EIS, and is applicable to projects that are considered non-critical but are located in
an environmentally critical area.

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C. Application Requirements
The main document required with the ECC application is the Environmental Impact Assessment (EIA) Report,
either an EIS or IEE depending on the proposed capacity of the WWTF. The basic outline of the report is
provided in Annex 1 of DENR MC 2010-14. For the NSSMP projects, the basic outline to be used could be for
a Proposed (New) Single Project or Proposed (New) Co-Located Project. The first outline is applicable if it is
an independent or stand-alone project while the second outline could be used if the proposed project will be
located in a project area with an ECC already issued, e.g. for a Water Treatment Facility (WTF) of the WD.
The EIA Report should focus on the environmental aspects of the project that have scientific basis and are
verifiable. The possible impacts on the four major environmental components (land, water, air and people) and
its applicable subcomponents should be investigated. In addition, related environmental concerns as
expressed by the local community or stakeholders through public scoping, public consultation or any other
form of public participation methods during the conduct of the EIA study should also be considered. The EIA
Report should present the projected impacts and the proposed environmental management and monitoring
plan to minimize these impacts within acceptable levels.
The EIA Report should be supported by the following documents:
proof of compatibility with the existing Land Use Plan, if necessary
proof of ownership or authority over the project site
Accountability Statements of the proponent and the EIS preparers
photographs or plates of the project site, impact areas an affected areas and communities
duly accomplished Project Environmental Monitoring and Audit Prioritization Scheme (PEMAPS)
questionnaire.
Additionally, these are required for co-located projects:
a copy of the existing ECC
the latest Self Monitoring Report.
The IEE or EIS for a project may be prepared by the proponent's technical staff or by an EMB-accredited
professional group commissioned by the proponent.

D. Review of ECC Application

The EIA Report and its supporting documents will be submitted to the concerned DENR-EMB Regional office
for review and eventual issuance of ECC. Upon acceptance of the EIA Report by the concerned DENR-EMB
Regional office, the latter is still authorized to one (1) request for additional information or clarification on the
substance of the EIA Report from the project proponent, if necessary.
For these type of projects (non-ECPs), the decision on the ECC Application will be issued by the EMB
Regional Director within twenty (20) working days after the official acceptance of application documents and
payment of the required processing and review fees.
The ECC is a document certifying that the project under consideration will not bring about an unacceptable
environmental impact and that the proponent has complied with the requirements of the EIS. The release
of the ECC allows the project to proceed to the next stage of project planning, which is the acquisition of
approvals from other government agencies and LGUs, after which the project can start implementation
Further information and assistance on Environmental Impact Statements can be found in the following
documents:
DENR-EMB Memorandum Circular 2007-02. Revised Procedural Manual for DENR Administrative Order No
30 Series of 2003. 21 August 2007.
DENR Memorandum Circular 2010-14. Standardization of Requirements and Enhancement of Public
Participation in the Streamlined Implementation of the Philippine EIS System. 29 June 2010.

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DENR-EMB Memorandum Circular 2005-01. Procedural Manual for DENR Administrative Order No. 30 Series
of 2003. 5 January 2005.
DENR Administrative Order 2003-30. Implementing Rules and Regulations of the Philippine EIS System. 30
June 2003.
DENR Administrative Order No. 2000-05. Revising DENR Administrative Order (DAO) No. 94-11,
Supplementing DAO No. 1996-37 and Providing for Programmatic Compliance Procedures within the
Environmental Impact Statement (EIS) System. 6 January 2000.
DENR Administrative Order 1996-37. Revising DENR Administrative Order No. 21,Series of 1992, to Further
Strengthen the Implementation of the Environmental Impact Statement (EIS) System. 2 December 1996.
DENR Administrative Order No. 1992-21: Amending the Revised Rules and Regulations Implementing P.D.
1586 (Environmental Impact Statement System). 5 June 1992.
Presidential Decree 1586. Establishing the Environmental Impact Statement System including other
Environmental Management and Related Measures. 11 June 1978.
Presidential Decree 1151. Philippine Environmental Policy. 6 June 1977.

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8.3 Application Process

8.3.1 Application Form

[Title of project]

NSSMP application form

MAIN APPLICATION FORM

Instructions to complete the application form

The elements within [] brackets must be completed with the information indicated, as
appropriate. Please delete all information on this brackets.
The cursive information provides support to complete the application form.
Where # appears please provide the appropriate number

[Date: Month and Year]

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ADDRESSES AND REFERENCES

Local Implementer responsible for the application (operating structure)
LGU contact details
Name:

Address:

Contact:

Telephone:

Telex/Fax:

E-mail:

WD contact details
Name:

Address:

Contact:

Telephone:

Telex/Fax:

E-mail:

Other partner contact details

Name:

Address:

Contact:

Telephone:

Telex/Fax:

E-mail:

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PROJECT DETAILS
Title of project

Categorisation of project activity [to be filled by the NSSMP]

Code for project registration Code
Project description summary

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Technical description of the investment in infrastructure

Describe the proposed infrastructure and the work for which assistance is being proposed specifying its main
characteristics and component elements.
[write yes for affirmative answers]
1. Is this a sewerage project with septage management already in place?
2. Is this a sewerage project without septage management in place?
3. Is this a septage management project within years 1 - 4 of planning cycle?
4. Is this a septage management project for years 4 -10 of planning cycle?

Septage system
Contract for # trucks

Sludge treatment plant

Proposed projects foreseen construction of Sludge treatment plant

Sewerage Network
System
- Construction of # new interceptors
- Construction of # km of new main collectors
- Construction of # km new pumping stations at the main collectors
- Construction of # km spillways on main collectors
- Construction of # crossing structures/siphons on main collectors
- Construction of # km of pressure pipes
- Construction of # km of secondary network
- Construction of # branches for new house connections

Wastewater treatment plant

Proposed projects foreseen construction of # new central WWTPs

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Operator
[describe current situation and specify operator: it is already assigned or is going to be a tender process]

Supervision
[describe firm in charge of supervision: it is already assigned or is going to be a tender process]

Communication
[describe publicity programme activities , public meetings, press releases warning of advance works, customer
relations office, adequate signs around the site, etc.]

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Main beneficiaries of the infrastructure (i.e. target population served, quantified where possible)
Provide a summary of the demand analysis, including the predicted utilisation rate on completion and
the demand growth rate.

Population and population growth rates

[explain sources for calculation]

Before Project: After Project:

Barangays / Municipalities of Inhabitants - 2012 Inhabitants - 2017
[Region] % %
Served Total Coverage Served Total Coverage

TOTAL SYSTEM

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Project objectives
Current infrastructure endowment and impact of the project
Indicate the extent to which the region(s) is/are at present endowed with the type of infrastructure covered by
this application; compare it with the level of infrastructure endowment aimed for by target year 20…….(i.e.,
according to the relevant strategy or national/regional plans, where applicable). Indicate the foreseeable
contribution of the project to the strategy/plan objectives and the impact on the sector concerned. Specify
potential bottlenecks or other problems to be resolved.

Region:
Project Area:

[include map of the region]

[Description of the beneficiary region]

Add annex with site information drawn

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Socio-economic objectives
Indicate the project’s socio-economic objectives and targets.

Social benefits of the project

Significance objectives
What is the scope of the project? [select one]

National

Regional

Local

Scope
[describe scope according to selection]

Environmental objectives
Is the region environmentally sensitive according to DENR?
Yes No

Provide estimation of pollution improvement

Pollution measure Unit Current Situation Estimation after project

Color PCU

pH mg/L

COD mg/L

BOD5 mg/L

TSS mg/L

Oil & Grease mg/L

Heavy Metals mg/L

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RESULTS OF FEASIBILITY STUDIES

Feasibility
Technical description
Description of alternative technologies analysed
[Provide advantages and disadvantages of technologies]

CURRENT and FUTURE TOTAL WASTE WATER FLOW in SEWERAGE SYSTEM

After Project Project life

Before Project Increase of water
Year [2017 or which period 2045
2010 treated
corresponds]
Municipality / Barangay m3/year m3/ year % m3/ year

[Title of Project]

TOTAL SYSTEMS

For Septage Projects

Design flow of septage treatment facility

Item Amount
Number of people benefited
Cubic meters per day
Cubic meters per month
Cubic meters per year
Number of trucks needed
Costs and Tariff
Total cost of Treatment and Collection Truck
O&M Cost per annum
Estimated annual billed volume in (m3
Estimated costs for recovery
Estimated user fee per m3. of water consumed (in
pesos)

For Sewerage Projects

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Item Amount
CAPEX
OPEX for treatment
OPEX for Collection
Remaining Funds to be Sourced
Interest Rate
Number of years for loan
Total annual payment

Financial feasibility
Monthly payment
Monthly tariff / person
Monthly tariff / family*
Willingness to pay (% estimated with baseline
study)

Affordability
[describe population capacity to pay]

LIFE TIME COSTS in [Title of the Project]

Investment Cost (€) O&M Cost (€/year) Life Time Cost (€)

Project IRR Project NPV Debt Service Ratio

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Local revenue per capita

This ratio measures the average amount that each citizen of the LGU contributes to the LGU’s internally
generated revenues, such as local business and property taxes, tariffs, licenses, and fees. This ratio reflects
the LGU’s orientation towards public service. It can serve as an indicator for the cost recovery of future
projects. A high indicator is desirable. A low indicator means that the LGU should consider increasing its fees
and taxes by either improving its efficiency and reach or adding more taxes, licenses and fees. (units in PHP /
year)
1. If over 30,000
2. If between 25,000 and 30,000
3. If between 15,000 and 25,000
4. If between 10,000 and 15,000
5. If less than 10,000

Project specific standards

In this section rate the adequacy of design, performance and customer service standards.
Projects designed with standards to improve long-term sustainability will have a higher priority.

1. The project-specific standards will add significantly to sustainability

2. The project specific standards will adequately address sustainability
3. The project lacks sufficient standards to ensure sustainability

Administrative Feasibility
Status
No. Documentation
Date obtained / expected
1 Executive Order Establishing a TWG
Resolution to Adopt a Local Sustainable
2
Sanitation Plan
3 Ordinance for Septage Management
4 MoU for a Partnership with a Private Firm

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TIMETABLE
Project timetable
Give below the timetable for the development of the overall project.
Foresee a separate entry in the table for each contract or phase, where relevant. Where the application
concerns a project stage, clearly indicate in the table the elements of the overall project for which assistance is
being sought by this application:
Start date (A) Completion date (B)
1. Masterplanning and Feasibility studies
2. Cost-benefit analysis (including
financial /economic analysis):
3. Environmental impact assessment
4. Design studies:
preliminary design
– main designs
5. Preparation of Tender documentation:
Construction of sewerage system
Construction of WWTP
Supervision of works
Equipment for Systems
Publicity for Projects
6. Expected launch of tender procedure(s)
Construction of sewerage system
Construction of WWTP
Supervision of works
Equipment
Publicity
7. Land acquisition:
Construction of sewerage system
Construction of WWTP
8. Construction phase / contract:
Construction of sewerage system
Construction of WWTP
Supervision of works
Equipment
Publicity
9. Operational phase:
Construction of sewerage system
Construction of WWTP – 1 year trial period
Construction of WWTP – operational phase
Supervision of works
Please attach a summary schedule of the main categories of works (e.g., a Gantt chart).

[indicate annexes]

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Project maturity
Describe the project timetable (D.1) in terms of the technical and financial progress and current maturity of the
project under the following headings:
Technical (feasibility studies, etc.)
Documentation Status Date obtained / expected

1. Feasibility Study

2. Conceptual design of WWTP

3. Conceptual design of sewerage network

4. Preliminary design of WWTP

5. Environmental Impact Assessment (no
objection)
6. Main designs of sewerage network

Administrative
Administrative ( authorisations, EIA, land acquisition, invitations to tender, permits, etc) [add or delete rows as
necessary]
Conceptual
Location Permit Main Design Building Permit
Municipality/ Design
Work Component Date obtained / Documentation Date obtained /
location Documentation
expected Status expected
Status
Construction of Sewerage system
1. Collectors
[Identify different
collectors]
2. Spillways
[Identify Spilways
for each collector]
3. Pumping stations
[Identify PS for
each collector]
4. Crossing Structur es
[Identify Crossing
Structures]

5. Pressured Pipelin e
[Identify PP for
each collector]
6. Sewerage networ ks
[Identify SN for
each collector]

Financial (commitment decisions in respect of national public expenditure, loans requested or granted, etc. -
give references):
[Indicate the financing scheme proposed to cover the project investment cost]
- Equity: %
- National contribution: %

Th e finan ci ng pl an fo r th e TOTAL 2013 2014 2015 2016 2017

eligible cost in P hP
(constantprices): PhP PhP PhP PhP PhP PhP
Equity
NationalContribution
T O T AL

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ANALYSIS OF THE ENVIRONMENTAL IMPACT

.How does the project:
(a) contribute to the objective of environmental sustainability (climate change policy, halting loss
of biodiversity, other …);

(b) respect the principles of preventive action and that environmental damage should as a priority
be rectified at source;

(c) respect the "polluter pays" principle.

Environmental Impact Assessment

DEVELOPMENT CONSENT
Has development consent already been given to this project?
Yes No

If yes, on which date

If no, when was the formal request for the development consent introduced:

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By which date is the final decision expected? [Add or delete rows as necessary]
No. Documentation Location Permit Building Permit
1
2
3
4
5
6
7
8

Provide results from EIA

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JUSTIFICATION FOR THE PUBLIC CONTRIBUTION

The socio economic analysis set out above provides information on the internal rate of return of the project.
The financial analysis demonstrates the financing gap and the impact of the Community assistance on the
financial viability of the project. Please complete this information with the elements set out below

Financial structure[provides % for each item]

Equity Grant Loan

Equity

LGU

WD

Other Partner

Is the construction of the infrastructure to be delivered through a public-private partnership (PPP)}?

Yes No

If yes, describe the form of the contract (i.e., legal framework enforced, selection process of the operator and
when applicable, structure of PPP, infrastructure ownership arrangements, risks allocation arrangements,
etc.):

Competition
Does this project involve NSSMP assistance? Answer if possible

Yes No

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Impact of NSSMP assistance on project implementation

For each affirmative answer, give details:
Will Community assistance:
a) Accelerate implementation of the project?

Yes No

b) Be essential to implementation of the project?

Yes No

[provide description of the importance of NSSMP funds]

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ENDORSEMENT OF COMPETENT NATIONAL AUTHORITY

I confirm that the information presented in this form is accurate and correct [add or delete tables
according to local implementers involved]

NAME:
SIGNATURE:

ORGANISATION:
(OPERATING STRUCTURE):
DATE:

NAME:
SIGNATURE:

ORGANISATION:
(OPERATING STRUCTURE):
DATE:

NAME:
SIGNATURE:

ORGANISATION:
(OPERATING STRUCTURE):
DATE:

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8.3.2 Format for Project Concept Note

After the initial design concept work has been done and preliminary (pre-feasibility) assessments conducted,
the local implementer should prepare a project concept note.
The project concept note is used to quickly communicate the project in general terms to local officials and
other interested parties. The concept note is a short description of the project that highlights the basic
information. This will be especially useful when introducing the project to stakeholders, elected officials or
potential funders.

Name of LGU

Province

Project proponent

Project name

Date

Specific problem to be
addressed

Brief project description

(one paragraph)

Target beneficiaries
(number of people, gender
aspect if appropriate)

Is a feasibility study
required?

Possible technology options

to be explored

The local implementer should fill the empty fields with clear and complete answers.

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8.3.3 Sample Letters Regarding Approval or Non-Approval of Funding Applications

Sample Letters Regarding Approval or Non-Approval of Funding Applications

DPWH-ESSO
Bonifacio Drive
Port Area
Manila

HON.

Date:

Attention: City Planning and Development Office

Subject / Reference: NSSMP Project Funding

Dear Sir / Madam

In reference to your application for national government funding in support of your sanitation project entitled
XXXX (reference letter dated XXXX, 20XX), we are pleased to inform you that your application has been
accepted.
A budget request of PhP XXX million has been submitted on your behalf to the Department of Budget
Management. Our expectation is that the first tranche of funding will be released on DATE. Please confirm
the bank account name and number to which the funds should be remitted.

Very truly yours,

ROGELIO L. SINGSON
Secretary

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DPWH-ESSO
Bonifacio Drive
Port Area
Manila

HON.

DATE

Attention: City Planning and Development Office

Subject / Reference NSSMP Project Funding

Dear Sir / Madam

In reference to your application for national government funding in support of your sanitation project entitled
XXXX (reference letter dated XX, 20XX), we regret to inform you that your application was not successful.
The reason(s) for this are:

Incomplete / insufficient application

Application ineligibility

Other

If you would like to follow up on this letter to receive further information regarding the reasons your application
has not been successful and, potentially, to discuss how you may be able to revise your application to address
the identified problems, then please do not hesitate to contact NAME, TITLE, through the following:
TELEPHONE NUMBER, FAX NUMBER, MOBILE NUMBER or EMAIL.

Very truly yours,

ROGELIO L. SINGSON
Secretary

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8.4 Procurement Process

8.4.1 Detailed Procurement Procedures

1. Advertisement and Posting of IAEB

For projects with an ABC of more than PhP 5.0 million, the IAEB should be advertised and/or posted through
the following:
a) Newspaper advertisement. At least once in one (1) newspaper of general nationwide circulation which has
been regularly published for at least two (2) years before the date of issue of the advertisement.
b) Internet posting. Posting continuously on the website of the LGU concerned, if available, the website of
the LGU’s service provider, if any, and the Government Electronic Procurement System (G-EPS) for
seven (7) calendar days starting on date of advertisement.
c) Posting in a conspicuous place. Posting at any conspicuous place reserved for this purpose in the
premises of the LGU concerned for seven (7) calendar days, as certified by the head of the BAC
Secretariat.
For projects with an ABC of PhP 5.0 million and below, the IAEB should be advertised and/or posted through
the following:
a) Internet posting. Posting continuously in the website of the LGU concerned, if available, the website of the
LGU’s service provider, if any, and the Government Electronic Procurement System (G-EPS) for seven (7)
calendar days starting on date of advertisement.
b) Posting in a conspicuous place. Posting at any conspicuous place reserved for this purpose in the
premises of the LGU concerned for seven (7) calendar days, as certified by the head of the BAC
Secretariat.

2. Acceptance of LOIs, Issuance of Eligibility Documents, and Conduct of Eligibility Check

Submission and Acceptance of LOIs
Eligible bidders with legal personality and capacity to undertake the contract shall include the following:
a) Duly licensed Filipino citizens/sole proprietorships
b) Partnerships duly organized under the laws of the Philippines and of which at least 75% of the interest
belongs to citizens of the Philippines
c) Corporations duly organized under the laws of the Philippines and of which at least 75% of the outstanding
capital stock belongs to citizens of the Philippines
d) Persons/entities forming themselves into joint venture, provided that Filipino ownership in the joint venture
shall be at least 75% and each member of the joint venture shall submit the required eligibility documents
e) Cooperatives duly registered with Cooperative Development Authority.
In addition, all these entities must have the following:
A license by the Philippine Contractors Accreditation Board (PCAB), in accordance with R.A. 4566
The experience of having satisfactorily completed a single contract similar to that to be bid, and the value
of which is at least 50% of the ABC of the contract to be bid
The Allowable Range of Contract Cost per PCAB registration of contractor is based on the guidelines
prescribed by PCAB
 A Constructors’ Performance Evaluation System rating that is satisfactory and/or certificate of completion
and owner’s acceptance of the contract
A certificate of commitment from a licensed bank to extend credit line if the bidder is awarded the contract.

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3. Issuance of Bid Documents

Prospective bidders found eligible to participate in the bidding must be allowed to acquire or purchase bidding
documents. The BAC Secretariat issues the bidding documents to eligible bidders that may wish to secure
said documents. In the case that the bidding documents are sold, the LGU will only accept bids from those
eligible bidders that have purchased the bidding documents. Bidding documents may be sold for a price as
determined by the BAC and approved by the LCE based on the cost of its preparation and development.
The bidding documents, as a whole or individually, shall not be divulged or released to any prospective bidder
prior to their official release to the contractors. Neither should these be divulged to any person with or without
direct or indirect interest in the project being bid out, except those officially authorized to handle them.
However, after its official release, it shall be made available to the public, unless the procurement at hand
affects national security.

4. Pre-bid Conference
The following are specifically discussed during the pre-bid conference:
The technical and financial components of the contract to be bid
The different documents to be submitted by each bidder
 The requirements in the Instructions to Bidders (ITB), the replies to the bidders’ queries about these
requirements, specifications and other conditions of the project, the bid evaluation of all bidders and post-
qualification evaluation of the lowest calculated bidder, the different warranty requirement of the project,
and the different offences and penalties.
A pre-bid conference must be held for all contracts with ABCs of at least PhP 1.0 million and above. For
contracts with ABCs of less than PhP 1.0 million, pre-bid conferences may or may not be held at the discretion
of the BAC. The BAC may also decide to hold such a pre-bid conference upon the written request of a
prospective bidder. The pre-bid conference must be held at least 12 calendar days before the deadline for the
submission and receipt of bids.
The following may attend the pre-bid conference:
The BAC
The TWG members and consultants, if any
The procuring unit/end-user unit
The eligible bidders, including those ineligible bidders with pend
The BAC Secretariat
ing requests for reconsideration with the BAC or those with pending protests with the LCE (attendance of
eligible bidders is not mandatory)
Observers

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5. Receive and Opening of Technical and Financial Envelopes

The procedures in the receipt, opening and preliminary examination of bids are as follows:

1. Eligible bidders submit their bids through their respective authorized representatives in 2 separate
sealed bid envelopes, the first containing the Technical Proposal and the second containing the
Financial Proposal.
2. The BAC convenes on the Bid Opening Date. The presence of the majority of the BAC members shall
constitute a quorum, provided that the chairperson or the vice-chairperson is present.
3. The BAC receives the bids at the time, date and place specified in the bidding documents.
4. The BAC proceeds with the opening and preliminary examination of bids in public. For each bid, the
BAC first opens the envelope containing the Technical Proposal to determine its compliance with the
required documents for the technical bid and then checks the submitted documents in the Technical
Proposal of each bidder against a checklist of required documents to ascertain if they are all present,
using non-discretionary “pass/fail” criteria.
5. In case one or more of the required documents in the Technical Proposal is missing, incomplete or
insufficient, the BAC rates the bid “failed” and immediately returns the Technical Proposal to the
bidder concerned, together with the unopened envelope containing the Financial Proposal. Otherwise,
the BAC rates the Technical Proposal “passed”.
6. The BAC opens the envelope containing the Financial Proposal of each remaining bidder whose
Technical Proposal (first envelope) was rated “passed”. The Financial envelope of each complying
bidder shall be opened within the same day. The BAC determines whether all the requirements/
documents in the Financial Proposal are complete and sufficient, and if the total bid price does not
exceed the ABC. Only the bids that are rated “passed: for both the Technical and Financial Proposals
shall be considered in the detailed evaluation and comparison of bids.
7. Foreign currency denominated bids shall be converted to Philippine currency, based on the exchange
rate prevailing on the day of the bid opening.
8. The BAC reads the total bid prices of the bidders that are rated “passed”.
9. All members of the BAC or their duly authorized representatives who are present during the bid
opening, shall initial every page of the original copies of all received and opened bids.
10. The BAC members and the Observers (if they concur with the proceedings) shall also sign the
“Abstract of Bids as Read” after the Preliminary Examination of Bids.
11. The BAC Secretariat shall record the proceeding using an electronic tape recorder or a video recorder.
The minutes of the bid opening should be prepared within 3 calendar days after the bid opening date.
Copies of the minutes shall also be made available to the public upon written request and payment of
a specified fee to recover the cost of materials.

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6. Evaluation of Bids
The evaluation of bids follows the following steps:

a. After the preliminary examination of bids, the BAC, through the TWG, shall immediately conduct a
detailed evaluation of all bids rated “passed”, using non-discretionary criteria stated in the IAEB and
the ITB.
b. Based on the detailed evaluation of bids, those that comply with the requirements shall be ranked in
the ascending order of their total calculated bid prices, as evaluated and corrected for computational
errors, discounts and other modifications, to identify the LCB. Total calculated bid prices, as
evaluated and corrected for computation errors, discounts and other modifications, which exceed the
ABC shall be disqualified.
c. After all bids have been received, opened, examined, evaluated and ranked, the BAC shall prepare
the corresponding Abstract of Bids. All BAC members shall sign the Abstract of Bids and attach
thereto all the bids with their corresponding Bid Securities and the minutes or proceedings of the
bidding.
d. The TWG, with the assistance of the BAC Secretariat, when directed by the BAC, should prepare the
Evaluation Report, containing the details of the evaluation conducted, preferably within 3 calendar
days from the date the evaluation from the date the evaluation was concluded.

7. Post-qualification
The following steps are followed in the conduct of post-qualification:
1. The BAC/TWG verifies, validates and ascertains the genuineness, validity and accuracy of the legal,
technical and financial documents submitted by the bidder with the LCB, using the non-discretionary
criteria as stated in the IAEB and ITB. These criteria shall consider, but shall not be limited to, the
following:
a. Legal requirements – PCAB license; SEC registration certificate or the DTI business name
registration; Mayor’s permit; BIR Certification; Authority of signatory; and Affidavit of compliance
with the Disclosure Provision.
b. Technical requirements – bidder’s stated competence and experience as well as of its key
personnel; availability and commitment, and/or inspection and testing, of its equipment units as
well as its performance in its ongoing government and private contracts; and sufficiency of the
Bid Security.
c. Financial requirements – bid price proposal; the required bank commitment to provide credit line
to the bidder; net worth and liquid assets; bill of quantities, detailed estimates and cash flow;
NFCC, credit line or cash deposit; and audited financial statement.
2. In verifying the information contained in the foregoing documents, the TWG may make inquiries with
appropriate government agencies and examine the original documents kept in the bidder’s place of
business.
3. The BAC/TWG inquires about the bidder’s performance in relation with other contracts/transactions
as indicated in its eligibility statement.
4. The TWG prepares a Post-qualification Report to be submitted to the BAC.
5. The BAC reviews the Post-qualification Report submitted by the TWG.
6. The BAC determines whether the bidder with the LCB passes all the criteria for post-qualification.
7. If the LCB passes the post-qualification, the BAC declares it as the LCRB.
After the BAC has determined the LCRB, the Secretariat, with the assistance of the TWG, if necessary,
prepares the BAC Resolution declaring the LCRB and the corresponding Notice to the said bidder informing it
of its post-qualification.

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8. Awarding of Contract
The procedures for awarding the contract are as follows:

1. The BAC Secretariat drafts the BAC Resolution recommending award.

2. The BAC Secretariat consolidates all the documents and/or records of the proceedings of the BAC
with regard to the procurement at hand, and attaches the same to the BAC Resolution.
3. The BAC approves and signs its resolution recommending award, and transmits the same to the LCE.
4. For infrastructure projects with an ABC above PhP 50 million, the LCE, or his/her duly authorized
representative, acts on the recommendation for award within 7 calendar days from the date of
determination and declaration by the BAC of the Lowest Calculated Responsive Bid (LCRB)/Single
Calculated and Responsive Bid (SCRB).
5. In case of a disapproval of the recommendation of award, the LCE shall state the reason(s) for
disapproval and instruct the BAC on the subsequent steps to be adopted. In case of approval of the
recommendation, the LCE, through the BAC Secretariat, issues the Notice of Award to the bidder with
the LCRB/SCRB, and notifies the losing bidders of the same.
6. The bidder with the LCRB/SCRB accepts the Notice of Award.

9. Contract Signing and Approval, and Issuance of Notice to Proceed

The procedures in contract signing and approval are as follows:

1. The winning bidder submits all the documentary requirements, including the performance security,
and signs the contract.
2. The BAC Secretariat transmits the contract documents to the appropriate signing authority for
signature, together with the following documents:
 Duly approved program of work and cost estimates
 Abstract of Bids as calculated
 Resolution of the BAC recommending the award
 Approval of award by the LCE
 Other pertinent documents that may be required by existing laws and/or the LGU concerned.
3. The LCE or his duly authorized representative signs the contract provided that the winning bidder has
complied with all the documentary requirements, if any.
4. The LCE or his/her duly authorized representative issues the NTP within 3 calendar days, for
infrastructure projects with an ABC of over PhP 50.0 million, or within 2 calendar days, for
infrastructure projects with an ABC of PhP 50 million and below, from the date of the approval of the
contract.

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8.4.2 Documentary Requirements During Procurement

A. Contents of the Bid Documents

The bid documents should contain the following

Document Yes No
a. Invitation to Apply for Eligibility and to Bid (IAEB)
b. Eligibility Documents
c. Eligibility Data Sheet
d. Instruction to Bidders
e. Bid Data Sheet
f. General Conditions of Contract
g. Special Conditions of Contract
h. Scope of Work (SOW)
i. Drawings
j. Bill of Quantities
k. Forms and Qualification Information.

B. Invitation to Apply for Eligibility and to Bid (IAEB)

The IAEB must be in accordance with the form prescribed by the GPPB in the bid documents and should
contain the following:
the name and location of the contract to be bid
the project background and other relevant information regarding the proposed contract works, including a
brief description of the type, size, major items, and other important or relevant features of the works
a general statement on the criteria to be used by the LGU for eligibility check/screening, preliminary
examination and detailed evaluation of bids, and post qualification
the date, time and place of the deadline for: the submission and receipt of the Letter of Intent (LOI)
together with the application for eligibility; the submission and receipt of the eligibility requirements;
notification of results of eligibility check/screening; pre-bid conference if any; the submission and receipt of
bids; and the opening of bids
the ABC
the source of funding
the period of availability of the bidding documents, the place where the bidding documents may be
secured and, where applicable, the price of the bidding documents
the contract duration
the name, address, telephone number, facsimile number, e-mail and website addresses of the concerned
LGU, as well as its designated contact person
the Reservation Clause, which is normally located at the bottom of the notice
such other necessary information deemed relevant by the LGU.

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C. Documentary Requirements during Eligibility Check

A prospective bidder is also required to submit the following documents to the BAC to determine its eligibility
to undertake the project:
1. Class “A” Documents
 Legal documents – i) DTI business name registration (single proprietorships) or SEC registration
certificate (partnerships or corporation); ii) Valid and current Mayor’s permit/municipal license to
operate business; BIR Registration Certificate; iii) Statement of the prospective bidder that it is not
“blacklisted” from bidding by the government; iv) Tax Clearance Certificate; v) Other appropriate
licenses as may be required by the LGU concerned; and vi) Certificate of PhilGEPS Registration.
 Technical documents – i) Statement of the prospective bidder of all its ongoing and completed
government and private contracts within the period specified in the IAEB, including contracts awarded
but not yet started, if any; ii) Valid PCAB license and registration for the type and cost of contract to be
bid; and iii) A statement on the availability of key personnel and availability of equipment.
 Financial documents – i) Audited financial statements for the immediately preceding calendar year; ii)
Proof of capacity to absorb the additional obligations in connection with the contract to be bid and to
finance its implementation/completion.
2. Class “B” Documents
 Valid Joint Venture Agreement (JVA), if the prospective bidder is a joint venture, with the name of the
lawful attorney-in-fact to sign the contract (if awarded the project) and the lead representative of the
joint venture.
 Letter authorizing the BAC or his duly authorized representative/s to verify any or all of the documents
submitted for the eligibility check.
3. Other Eligibility Documents
 A notarized certification by the bidder or its duly authorized representative that each of the documents
submitted in satisfaction of the eligibility requirements is an authentic and original copy, or a true and
faithful reproduction or copy of the original, complete, and that all statements and information provided
therein are true and correct.
 The BAC may require that the bidder’s authorized representative to initial every page of the
documents it submits as originals in order to ensure that the documents reviewed by the BAC are
authentic and to protect the BAC from any insinuation of tampering with said documents.
D. Documents that should form part of the contract
The documents that should form part of the contract shall include the following:
the Contract Agreement
conditions of Contract
drawings/Plans, if applicable
Scope of Work
Invitation to Apply for Eligibility and to Bid (IAEB)
bidding documents
Addenda and/or Supplemental/Bid Bulletins, if any
 bid form including all the documents/statements contained in the winning bidder’s two bidding envelopes,
as annexes
eligibility requirements, documents and/or statements
performance security and CARI
credit line issued by a licensed bank, if applicable
 Notice of Award of Contract with the winning bidder’s “Conforme” thereto
PERT/CPM approved by the LGU
Other contract documents that may be required by existing laws and/or the LGU concerned.

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8.4.3 Sample Procurement Notice

[Letterhead of the Procuring Entity]

REQUEST FOR EXPRESSION OF INTEREST FOR [Insert name of Project]

1. Select one of the two following paragraphs and delete the other depending on the Funding Source:
a) If the Funding Source is GOP:

The [insert name of Procuring Entity], through the [insert source of funding and year]7 intends to apply the
sum of [insert the approved budget for the contract] being the Approved Budget for the Contract (ABC) to
payments under the contract for [insert name/no. of contract]. Bids received in excess of the ABC shall be
automatically rejected at the opening of the financial proposals.
b) If the Funding Source is a foreign government/foreign or international financing institution:

The Government of the Philippines (GOP) [has received/has applied for/intends to apply for] a
[Loan/Credit/Grant] from the [state the foreign government/foreign or international financing institution,]
toward the cost of [insert name of project], and it intends to apply part of the proceeds of this
[loan/credit/Grant] to payments under the contract for [insert name/no. of contract].
2. The [insert name of the Procuring Entity] now calls for the submission of eligibility documents for [insert
brief description of services to be procured]8. Interested consultants must submit their eligibility
documents on or before [insert date and time of the opening of eligibility documents] at [insert address for
place of submission]. Applications for eligibility will be evaluated based on a non-discretionary “pass/fail”
criterion.
3. The BAC shall draw up the short list of consultants from those who have submitted [eligibility
documents/Expression of Interest] and have been determined as eligible in accordance with the provisions
of Republic Act 9184 (RA 9184), otherwise known as the “Government Procurement Reform Act”, and its
Implementing Rules and Regulations (IRR). The short list shall consist of [insert number of short list
allowed]9 prospective bidders who will be entitled to submit bids. The criteria and rating system for short
listing are:
[Insert here a general statement on the criteria and rating system to be used for the short listing]
1. Select one of the two following paragraphs, and delete the other depending on the Funding Source:

a) If the Funding Source is GOP:

Bidding will be conducted through open competitive bidding procedures using non-discretionary “pass/fail”
criterion as specified in the IRR of RA 9184.
In addition, select one of the two following paragraphs and delete the other depending on the
existence of the condition under Section 24.3.3 of the IRR of RA 9184:
I. Select this paragraph if Filipino consultants have sufficient expertise and capability to render the
services required under the project: Bidding is restricted to Filipino citizens/sole proprietorships,

7
In the case of National Government Agencies, the General Appropriations Act and/or continuing
appropriations; in the case of GOCCs, GFIs, and SUCs, the Corporate Budget for the contract approved by
the governing Boards; in the case of LGUs, the Budget for the contract approved by the respective
Sanggunian. (Section 5(a), R.A. 9184)
8
A brief description of the terms of reference of the Consulting Service should be provided, including
outputs/deliverables, location of project, and other information necessary to enable potential bidders to decide
whether or not to respond to the invitation.
9
For World Bank financed contract, the short list should be six (6) Consultants.
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partnerships, or organizations with at least sixty percent (60%) interest or outstanding capital stock
belonging to citizens of the Philippines.
II. Select this paragraph if Filipino consultants do not have sufficient expertise and capability to
render the services required under the project: Bidding is open to all interested bidders, whether
local or foreign, subject to the conditions for eligibility provided in the IRR of RA 9184.
b) If the Funding Source is a foreign government/foreign or international financing institution:
Bidding will be conducted in accordance with relevant procedures for open competitive bidding as
specified in the IRR of RA 9184 with some amendments, as stated in these bidding documents and is
open to all bidders from eligible source countries as defined in the applicable guidelines of the [state the
foreign government/foreign international financing institution concerned].
The Procuring Entity shall evaluate bids using the [indicate if Quality Based Evaluation/Selection (QBE/QBS),
Quality-Cost Based Evaluation/Selection (QCBE/QCBS), Fixed Budget Selection, or Least-Cost Selection]
procedure. [In case QCBE is used, insert the following sentence here: The Procuring Entity shall indicate the
weights to be allocated for the Technical and Financial Proposals]. The criteria and rating system for the
evaluation of bids shall be provided in the Instructions to Bidders.
2. The contract shall be completed within [insert the expected contract duration in days or months].

3. The [insert name of the Procuring Entity] reserves the right to reject any and all bids, annul the
bidding process, or not award the contract at any time prior to contract award, without thereby
incurring any liability to the affected bidder or bidders.

4. For further information, please refer to:

[Insert name of officer]

[Insert name of office]
[Insert postal address] and/or [Insert street address]
[Insert telephone number, indicate city code]
[Insert contact’s email address]
[Insert facsimile number]
[Insert website address, if applicable]

[Date of Issued]

[Insert
Name and Signature of the BAC Chairperson or the
Authorized Representative of the BAC Chairperson]
>

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8.4.4 Sample Letter of Acknowledgement of Receipt

Letterhead of Contracting Authority

ACKNOWLEDGEMENT OF RECEIPT – HAND DELIVERY

Name and address of the [Candidate/Applicant/Tenderer]:

....................................................
....................................................
....................................................
....................................................
....................................................

Call for [tender/proposals]: <reference number & title>

[Title of your action: <……….……………………> (one action only per acknowledgement of receipt)]
Your <application/concept note/tender> was received on <date and hour> [add, if relevant, the state of the
envelope/package]
[You will be sent a formal acknowledgement of receipt following the opening session and administrative check.
This acknowledgement letter will contain the reference number assigned to your <application/concept note>.]

Name:
Signature:

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8.4.5 Sample Shortlisting Notice

Section I. Notice of Eligibility and Short Listing
[Insert Date]
[Name and Address of Short Listed Consultant]

Dear [Addressee]:

1. The [insert name of Procuring Entity] (hereinafter called “Procuring Entity” has received financing (hereinafter called
“funds”) from [insert name of Funding Source] (hereinafter called the “Funding Source”) toward the cost of [insert
name of project]. The Procuring Entity intends to apply a portion of the funds in the amount of [insert amount of ABC]
to eligible payments under the contract for [insert name of contract] for which the Bidding Documents is issued.

2. The Procuring Entity now invites bids to provide the following Consulting Services: [insert short description of
objectives and scope of the project]. More details on the services are provided in the Terms of Reference (TOR) for
the project.

3. The Consultant shall be selected and employed in accordance with [insert evaluation procedure] procedures as
described in the Bidding Documents.

4. This notice has been addressed to the following short listed consultants:

[Insert list of short listed consultants]

5. It is not permissible for you to transfer this invitation to any other consultant.

6. The Bidding Documents shall be available at [indicate address] during [insert office hours, e.g. 8:00 a.m. to 5:00
p.m.].

7. Select one of the following two paragraphs, and delete the other: 10

a) If the Procuring Entity intends to open the Pre-Bid Conference to all interested Bidders:
The [insert name of the Procuring Entity] will hold a Pre-Bid Conference on [insert time and date] at [insert
address for Pre-Bid Conference, if applicable], which shall be open to all interested parties.

b) If the Procuring Entity intends to limit the Pre-Bid Conference to Bidders who have purchased the
Bidding Documents:
The [insert name of the Procuring Entity] will hold a Pre-Bid Conference on [insert time and date] at [insert
address for Pre-Bid Conference, if applicable], which shall be open only to all interested parties who have
purchased the Bidding Documents.

Yours sincerely,

[Insert signature, name, and title of the Procuring Entity’s

Representative]

10
May be deleted in case the ABC is less than One Million Pesos (PhP1,000,000) where the Procuring Entity
may not hold a pre-bid conference.
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8.4.6 Sample Letter to Firms not Shortlisted

<Letterhead of Contracting Authority >

[Insert Date]
[Name and Address of Short Listed Consultant]

Dear [Addressee]:

Our ref: < Publication reference > / < Letter number >
Dear Sir / Madam
< Contract title >, < Location >, <Lot number and title>]
Thank you for your recent application to participate in the above contract. I regret to inform you that your
application has not been short-listed to prepare a detailed tender for this contract for the following reason(s):
Delete rows not applicable
your application was submitted after the deadline

your application did not follow the standard application format and/or the instructions contained in it

your application was not considered to satisfy the economic and financial standing criterion

your application was not considered to satisfy the professional capacity criterion (in particular,

your application was not considered to satisfy the technical capacity criterion (in particular,

<other reason, to be specified, e.g. your application was considered to give rise to a conflict of interests due
to your previous involvement in the project>

For your information, we received <number of applications> applications in response to the procurement
notice of which <shortlist number> were short-listed.
Although we have not been able to pursue your candidature further on this occasion, I trust that you will
continue to take an active interest in [NSSMP]-funded initiatives.

Yours faithfully,

< Name >

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8.4.7 Sample Letter Inviting Firms to Tender

[Letterhead of the Procuring Entity]
Invitation to Bid for [Insert name of Project]

1. The [insert name of Procuring Entity], through the [insert source of funding and year]11 intends to apply the
sum of [insert the approved budget for the contract] being the Approved Budget for the Contract (ABC) to
payments under the contract for [insert name/no. of contract]. Bids received in excess of the ABC shall be
automatically rejected at bid opening.
2. The [insert name of Procuring Entity] now invites bids for [insert brief description of Works to be
procured].12 Completion of the Works is required [insert the required completion date or expected contract
duration]. Bidders should have completed, within ten (10) years from the date of submission and receipt of
bids, a contract similar to the Project. The description of an eligible bidder is contained in the Bidding
Documents,
3. Bidding will be conducted through open competitive bidding procedures using non-discretionary pass/fail
criterion as specified in the Implementing Rules and Regulations (IRR) of Republic Act 9184 (RA 9184),
otherwise known as the “Government Procurement Reform Act”.
Bidding is restricted to Filipino citizens/sole proprietorships, partnerships, or organizations with at least
seventy five percent (75%) interest or outstanding capital stock belonging to citizens of the Philippines.
4. Interested bidders may obtain further information from [insert name of the Procuring Entity] and inspect the
Bidding Documents at the address given below from [insert office hours].
5. A complete set of Bidding Documents may be purchased by interested Bidders from the address below
and upon payment of a nonrefundable fee for the Bidding Documents in the amount of [insert amount in
Pesos].
6. It may also be downloaded free of charge from the website of the Philippine Government Electronic
Procurement System (PhilGEPS) and the website of the Procuring Entity, provided that bidders shall pay
the fee for the Bidding Documents not later that the submission of their bids.
7. Select one of the following two paragraphs, and delete the other: 13
a) If the Procuring Entity intends to open the Pre-Bid Conference to all interested Bidders:
The [insert name of the Procuring Entity] will hold a Pre-Bid Conference on [insert time and date]
at [insert address for Pre-Bid Conference, if applicable], which shall be open to all interested
parties.
b) If the Procuring Entity intends to limit the Pre-Bid Conference to Bidders who have purchased the
Bidding Documents:
The [insert name of the Procuring Entity] will hold a Pre-Bid Conference on [insert time and date]
at [insert address for Pre-Bid Conference, if applicable], which shall be open only to all interested
parties who have purchased the Bidding Documents.

11
In the case of National Government Agencies, the General Appropriations Act and/or continuing
appropriations; in the case of GOCCs, GFIs, and SUCs, the Corporate Budget for the contract approved by
the governing Boards; in the case of LGUs, the Budget for the contract approved by the respective
Sanggunian. (Section 5(a), R.A. 9184)
12 A brief description of the scope of Works should be provided, including quantities, location of project, and
other information necessary to enable potential bidders to decide whether or not to respond to the invitation.
13
May be deleted in case the ABC is less than One Million Pesos (PhP1,000,000) where the Procuring Entity
may not hold a pre-bid conference.
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8. Bids must be delivered to the address below on or before [insert date and time] at [insert address for
submission and receipt of bids]. All bids must be accompanied by a bid security in any of the acceptable
forms and in the amount stated in ITB Clause
Bids will be opened in the presence of the bidders’ representatives who choose to attend at the address
below. Late bids shall not be accepted.
9. [Insert such other necessary information deemed relevant by the Procuring Entity]
10. The [insert name of the Procuring Entity] reserves the right to accept or reject any bid, to annul the bidding
process, and to reject all bids at any time prior to contract award, without thereby incurring any liability to
the affected bidder or bidders.
11. For further information, please refer to:
[Insert name of officer]
[Insert name of office]
[Insert postal address] and/or [Insert street address]
[Insert telephone number, indicate city code]
[Insert contact’s email address]
[Insert facsimile number]
[Insert website address, if applicable]

[Insert
Name and Signature of the BAC Chairperson or the
Authorized Representative of the BAC Chairperson]

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8.4.8 Outline of Terms of Reference

Following table is extracted from the Philippine Bidding Documents, Procurement of Infrastructure Projects
elaborated by the Government of the Republic of the Philippines. The contents can be found on the NSSMP
website and on the Government Procurement Policy Board website ( www.gppb.gov.ph Clicking
Downloadable PBDs 4th Edition Infrastructure Projects)

TABLE OF CONTENTS
A. GENERAL ¡ERROR! MARCADOR NO DEFINIDO.
1. SCOPE OF BID
2. SOURCE OF FUNDS
3. CORRUPT, FRAUDULENT, COLLUSIVE, AND COERCIVE PRACTICES
4. CONFLICT OF INTEREST
5. ELIGIBLE BIDDERS
6. BIDDER’S RESPONSIBILITIES
7. ORIGIN OF GOODS AND SERVICES
8. SUBCONTRACTS
B. CONTENTS OF BIDDING DOCUMENTS
9. PRE-BID CONFERENCE
10. CLARIFICATION AND AMENDMENT OF BIDDING DOCUMENTS
C. PREPARATION OF BIDS
11. LANGUAGE OF BIDS
12. DOCUMENTS COMPRISING THE BID: ELIGIBILITY AND TECHNICAL COMPONENTS
13. DOCUMENTS COMPRISING THE BID: FINANCIAL COMPONENT
14. ALTERNATIVE BIDS
15. BID PRICES
16. BID CURRENCIES
17. BID VALIDITY
18. BID SECURITY
19. FORMAT AND SIGNING OF BIDS
20. SEALING AND MARKING OF BIDS
D. SUBMISSION AND OPENING OF BIDS
21. DEADLINE FOR SUBMISSION OF BIDS
22. LATE BIDS
23. MODIFICATION AND W ITHDRAWAL OF BIDS
24. OPENING AND PRELIMINARY EXAMINATION OF BIDS
E. EVALUATION AND COMPARISON OF BIDS
25. PROCESS TO BE CONFIDENTIAL
26. CLARIFICATION OF BIDS
27. DETAILED EVALUATION AND COMPARISON OF BIDS
28. POST QUALIFICATION
29. RESERVATION CLAUSE
F. AWARD OF CONTRACT
30. CONTRACT AWARD
31. SIGNING OF THE CONTRACT
32. PERFORMANCE SECURITY
33. NOTICE TO PROCEED

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8.4.9 Sample Notification Letter for Supply of Works

[Letterhead of the Procuring Entity]

Letter to sign contract [Insert name of Project]
[Insert Date]
[Name and Address of Short Listed Consultant]

Dear [Addressee]:
Our ref: < Publication reference >
< Contract title >, < Location >

The recommendation for award for <Assignment/ Project Title> of your firm has been approved.
The above contract may be awarded to you subject to the eligibility of the proofs when requested, for the
amount mentioned in your tender [, as corrected for arithmetic errors as follows: …] and on the basis of the
conditions stipulated in the tender dossier. The contract value is <amount>.
Please complete a new financial identification form if your bank account details have changed since those
submitted with your tender.
[Where applicable depending on the amount of the contract: To facilitate the contract preparation, could you
please confirm that you will request the pre-financing of < amount of pre-financing >.]

Yours sincerely,

< Name >

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8.4.10 Sample Cover Letter Requesting Submission of Signed Contract

Form of Contract Agreement

THIS AGREEMENT, made this [insert date] day of [insert month], [insert year] between [name and
address of PROCURING ENTITY] (hereinafter called the“Entity”) and [name and address of Contractor]
(hereinafter called the “Contractor”).
WHEREAS, the Entity is desirous that the Contractor execute [name and identification number of
contract] (hereinafter called “the Works”) and the Entity has accepted the Bid for [insert the amount in
specified currency in numbers and words] by the Contractor for the execution and completion of such Works
and the remedying of any defects therein.
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:
1. In this Agreement, words and expressions shall have the same meanings as are respectively
assigned to them in the Conditions of Contract hereinafter referred to.

2. The following documents shall be attached, deemed to form, and be read and construed as
part of this Agreement, to wit:

(a) General and Special Conditions of Contract;

(b) Drawings/Plans;
(c) Specifications;
(d) Invitation to Apply for Eligibility and to Bid;
(e) Instructions to Bidders;
(f) Bid Data Sheet;
(g) Addenda and/or Supplemental/Bid Bulletins, if any;
(h) Bid form, including all the documents/statements contained in the Bidder’s bidding
envelopes, as annexes;
(i) Eligibility requirements, documents and/or statements;
(j) Performance Security;
(k) Credit line issued by a licensed bank, if any;
(l) Notice of Award of Contract and the Bidder’s conforme thereto;
(m) Other contract documents that may be required by existing laws and/or the Entity.

3. In consideration of the payments to be made by the Entity to the Contractor as hereinafter

mentioned, the Contractor hereby covenants with the Entity to execute and complete the
Works and remedy any defects therein in conformity with the provisions of this Contract in all
respects.

4. The Entity hereby covenants to pay the Contractor in consideration of the execution and
completion of the Works and the remedying of defects wherein, the Contract Price or such
other sum as may become payable under the provisions of this Contract at the times and in
the manner prescribed by this Contract.

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IN WITNESS whereof the parties thereto have caused this Agreement to be executed the day and
year first before written.
Signed, sealed, delivered by the (for the Entity)

Signed, sealed, delivered by the (for the Contractor).

Binding Signature of PROCURING ENTITY

Binding Signature of Contractor

[Addendum showing the corrections, if any, made during the Bid evaluation should be attached with this
agreement]

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8.4.11 Sample Format for Negotiation Report

[Letterhead of the Procuring Entity]

Letter to sign contract [Insert name of Project]
[Insert Date]
[Name and Address of Short Listed Consultant]

Dear [Addressee]:

Present:
Contractor Team:

<names of representatives>

Firm Representatives:

<names of representatives>

Background:
The <contractor> evaluation team called this negotiation to clarify key points on the technical and financial
proposal of the firm. Overall, the task team finds the technical proposal to be responsive to the needs of the
terms of reference, providing some innovative concepts which the program could explore.

Summary of discussions:
The task team provided these updates and insights for the firm:
<comments to TP and FP>
Feedback from the firms’ representative
<comments of Firm representatives>

Agreements:
<commitments>

Conforme:
On behalf of <name of firm>: On behalf of <contractor>

<name of representative> <name of representatives>

<position of representative> Task Team Leader

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8.5 Budget and Financing

8.5.1 Information on Possible Finance Sources

Possible sources of financing can be grouped into two categories: (i) donor funded assistance; and (ii)
commercial assistance.
1.0 Donor-Funded Assistance
The table below provides a comparison of the principal terms and conditions associated with donor-funded
assistance (specifically those loans provided through Development Bank of the Philippines – DBP – and Land
Bank of the Philippines – LBP – programmes) and, in contrast, commercial bank loans. The main difference is
that donor-funded assistance typically offers longer term loans (up to 15 years) compared to only 7 years for
commercial loans.

DBP EDP LBP S2LDIP Commercial Banks

Repayment term Up to 15 years, inclusive of a Up to 15 years, inclusive of 5 to 7 years

maximum grace period of 5 2 years grace period on the
years principal
Interest rate Fixed throughout the loan (8 to 5 yrs – 8% 6 to 9%
10%) 10 yrs – 9%
15 yrs – 10%
Other fees Front end fee & commitment Front end fee & Guarantee fee if
fee (0.02%) commitment fee guaranteed by
LGUGC
Equity requirement Minimum of 10% based on total 25% for LGU or WD; but 30% of total project
project cost (for LGU, loan portion can be up to cost
Cooperative/Association, WD 100%
and GOCC)
Eligible borrowers LGUs/WDs, private WDs classified as LGUs and WDs
corporations, GOCCs, creditworthy and semi-
cooperatives/ associations, and creditworthy by LWUA;
private financial institutions LGUs that meet the lending
criteria of LANDBANK
Eligible expenditures Capital investments, initial Capital investments, Capital investments,
working capital, and FS working/operating capital working capital
preparation/ DE design

Environmental Development Project (EDP)

The Development Bank of the Philippines manages the EDP which is a policy-based lending facility funded by
the Japan International Cooperation Agency intended to support viable and environmentally-sound investment
projects. Aside from water supply and sanitation, the EDP supports projects for industrial prevention and
control, new and renewable energy, and solid hazardous/health care waste management.
Objectives. The EDP aims to:
improve the quality of the environment
enable LGUs to manage their environment and natural resources
develop and manage natural resources in a sustainable manner
establish the Philippine Water Revolving Fund (PWRF) as an innovative financing mechanism.

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Terms and Conditions. The EDP loan has the following terms and conditions:
repayment term of up to 15 years, inclusive of a maximum grace period of 5 and 3 years for non-water and
water supply loans, respectively
fixed interest rate throughout the loan period
front end and commitment fees
equity requirement of minimum of 20% based on total project cost for private corporations; and minimum
of 10% based on total project cost for LGUs, Cooperatives/Associations, Water Districts and Government-
Owned and Controlled Corporations (GOCCs).
Eligible Borrowers. The EDP provides LGUs, GOCCs, cooperatives, associations, water districts, private
corporations and private water service providers with long-term funds to mobilize, encourage and support
activities and investments in environment-friendly projects.
Eligible Expenditures. Loans can be availed for capital investments, initial working capital and interest during
construction period if essential for project viability, and preparation of feasibility study and detailed engineering
design.
Eligible Projects. For the sanitation sector, eligible projects include: (i) collection, treatment and disposal of
wastewater; and (ii) development of sanitation services/facilities.
Support for Strategic Local Development and Investment Project (S2LDIP)
The Land Bank of the Philippines (LANDBANK) manages the S2LDIP, which is funded by the World Bank. It
aims to improve public service provision and management intended for LGUs implementing strategic
infrastructure investments. As of 2010, PhP 2.3 billion funded 64 projects for drainage/sanitation, water
systems, shoreline protection, construction of slaughterhouse, public market, etc.
Loan Terms. The loan has a maximum term of 15 years inclusive of 2 years grace period on the principal.
Interest rates vary depending on the loan repayment period, i.e., 5 years – 8%; 10 years – 9%; and 15 years –
10%. Up to 100% of the total project costs can be borrowed under S2LDIP.
Eligible Borrowers. Loans can be availed by Water Districts classified as creditworthy and semi-creditworthy
by LWUA and LGUs (Province, City and Municipality) that meet the lending criteria of LANDBANK.
Eligible Projects. For the sanitation sector, eligible projects are the construction/improvement of sanitation
facilities such as wastewater treatment facilities, sewerage systems, and septage treatment facilities.
2.0 Loans from Commercial Banks
The provision of financing for sanitation projects is a relatively new concept for private commercial banks.
However, it should be noted that private banks had been involved in co-financing arrangements with
government banks. For instance, the PWRF is designed as a co-financing arrangement between DBP (using
JICA loan funds) and private banks (using their own resources). In this way, rather than competing, public
resources are used to complement private funding.
Indeed, one feature of the PWRF is the use of public funds to provide standby credit line that will refinance the
private bank loan component if it cannot lend beyond 10 years. This enhancement has allowed private banks
to respond to long-term funding requirements of most water supply projects. Since the development of the
PWRF scheme in 2007, there has been enthusiastic response from private banks and with the support of
LGUGC, private banks have actively originated loans, are offering competitive rates, and expediently
processing loans.
A number of private banks have co-financed some of the PWRF accounts of DBP while some have ventured
into water supply and sanitation accounts on their own. Examples include the co-financing between DBP and
the Bank of Philippine Islands for the water supply project of Puerto Princesa City Water District and the co-
financing using the PWRF facility between DBP and Security Bank to expand the water supply and sanitation
facilities in Boracay Island.
Private banks typically can offer loans of up to only 7 years (compared to up to 15 years for DBP and
LANDBANK loans). They also usually require guarantee from LGUGC that could increase the interest rate by
1.5% to 2% per annum. Following table presents indicative interest rates charged by private banks.

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Medium-term1 Long-term2
Banks
Low High Low High

Bank of Commerce 7.500 21.229 5.980 8.800

East West Bank 5.188 26.578 5.188 11.820

Phil. Veterans Bank 7.680 13.000 4.631 8.500

Maybank 3.500 30.816 4.630 13.751

Hongkong & Shanghai Bank 5.250 26.000 2.364 5.250

Allied Banking Corporation 6.900 9.750 3.878 3.878

Banco De Oro Universal Bank 3.541 40.885 4.250 11.250

Bank of the Philippine Islands 3.000 3.000 4.500 7.750

China Banking Corporation 5.500 8.000

Metropolitan Bank and Trust Company 3.500 6.334 3.000 10.000

Philippine National Bank 2.000 16.440 5.500 17.940

Rizal Commercial Banking Corporation 6.000 8.000 7.721 9.000

Security Bank Corporation 5.684 9.500 5.500 5.500

United Coconut Planters Bank 7.057 8.500 7.100 7.100

Union Bank of the Philippines 6.880 26.030 6.880 12.000

Source: Bangko Sentral ng Pilipinas, for the period of Sept. 17-21, 2012
(http://www.bsp.gov.ph/statistics/keystat/intrates.htm)
1 Medium-term interest rates on loan contracts with maturity period of more than one year to five years
2 Long-term interest rates on loan contracts with maturity period of more than five years

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Contact Requirements/ Terms and Conditions

Information
Government Banks
Development Program Basic technical requirements
Bank of the Development I  Letter of intent
Philippines (02) 893-3548  Company information/profile
(02) 893-9745  Project description, including flowchart of production process/facilities
(02) 818-9511 loc.  Detailed breakdown of estimated costs of the project and its component
2340  Amount of loan requested and project timetable
 Projected environmental and socio-economic benefits of the project
 EIA report
 ECC/CNC
Term and conditions
 Repayment term of up to 15 years, inclusive of a maximum grace period
of 5 and 3 non-water and water supply loans, respectively.
 Fixed interest rate throughout the loan period.
 Front end and commitment fees.
 Equity requirement of minimum of 20% based on total project cost for
private corporations; and minimum of 10% based on total project cost
for LGUs, Cooperatives/Associations, Water Districts and GOCCs.
Land Bank of the Programs Documentary requirements
Philippines Management Group  Certified list of directors and key officers
405-7110  Feasibility Study, WD Development, and Program of Work approved by
522-000 loc. 7476/ LWUA
2785  Contract/ MOA with LGU authorizing the borrower to construct/develop
the proposed infrastructure project
 Other standard documentary requirements of LBP
Term of the Loan
 Maximum term of 15 years inclusive of 2 years grace period on the
principal
Commercial Banks
Phil. Veterans Corporate Loans Documentary requirements
Bank (02) 902-1628  Letter of intent/Application letter
(02) 902-1698  Company profile
 Duly accomplished Customer’s Information Report
 Audited Financial Statements for the past 3 years
 In-house Financial Statements for the past 3 years
 Income Tax Return for the past 3 years
 Financial projections
 Feasibility Study/Project Analysis
 Articles of Incorporation and By-Laws
 List of other creditors
 Statement of account from financial institutions with existing loans
Metrobank First Metro Documentary requirements
Investment Corp.  Certificate of business registration with SEC or DTI
858-7900  Articles of incorporation and by-laws
 Audited financial statements for the last 2 years
 Two years in-house financial statement and interim statement
 Business background/company profile
 Trade suppliers/customers

Source: Manila Third Sewerage Project (MTSP) Components 3 & 4 (Task 6 Report)

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3.0 LGU or Municipal Bonds

An LGU or Municipal Bond is an instrument-bearing obligation by the LGU, the bond issuer, to finance
project operating and/or capital cost. LGU bonds are debt securities that LGUs issue to raise money for
public projects. Bond flotation requires a good sense of fiscal prudence and financial innovativeness. Ideally,
project funded by bonds should be able to pay for themselves, or be self-liquidating. LGU projects for possible
financing by bonds include: power plants, waterworks, toll bridges/roads, pier, reclamation project, sports
complex, irrigation, telephone system, commercial building, housing project, bus terminal and park.
Among the advantages of LGU bonds compared to bank loans are as follows:
accessible to wider capital market
open to community investment
longer repayment period
more flexible repayment scheme
lower interest rates, pricing based on margins over T-bills
sinking fund arrangement, interest earning
more widely established and developed credit standing in the financial market
whenever possible, interest rates can be fixed
allows members of the community to involve themselves in, and at the same time, earn from the project.
Examples of bond flotation by LGUs are the following:
a) Urdaneta City Municipal Bond (Abbattoir Upgrade) – PhP 25 million (bond issued on May 1999)
b) Boracay-Aklan Provincial Bonds (Jettyport and Terminal Building Construction) – PhP 40 million (July
1999)
c) Puerto Princesa Green Bonds (Socialized Housing Project) – PhP 320 million (February 2000)
d) Caloocan Katipunan Bonds (General Hospital, Public Market and City Hall) – PhP 620 million (December
2000)
e) Tagaytay City Bonds (Convention Center) – PhP 220 million (March 2001)
f) Iloilo City Bonds (Government Employees Housing Project) – PhP 130 million (March 2001)
g) Bulan Bonds (Bus Terminal and Municipal Slaughterhouse) – PhP 50 million (September 2007)
The LGU Bond issuance process14 consists of the following steps:
1. Secure certification of maximum borrowing capacity – a certification on the LGUs maximum debt
service capacity from the Bureau of Local Government Finance (BLGF-DOF) has to be secured.
2. Project identification – this step involves: i) identification of the revenue generating project; ii)
evaluation of the project through a pre-feasibility study; iii) if found feasible, conduct full blown
feasibility study to promote, technical, organizational and economic bases for an investment decision;
iv) securing clearances from government agencies (ECC, BLGF-DOF certification, etc.); and v)
hiring of a Financial Advisor (FA) who shall serve as consultant to the LGU to assist in the preparation
and design of the financial plan for the project.
3. Sanggunian ordinance approving the project – consists of: i) approval of the project and
certification that the project is in accordance with the approved local development plan and public
investment program; ii) approval to float bonds to generate funds to finance the project; iii)
authorization of the LGU to engage the services of a bond issuance team which includes the Trustee,

14
Based on the Joint Memorandum Circular (JMC) 2007: Volume 4 links
(http://www.jmc2007compendium.com/documents/Volume4Links/MunicipalBondIssuanceProcess.pdf)

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Board, Counsel, Underwriter and Guarantor; and iv) designation of the LGU chief executive to
represent the LGU in negotiations with financial institutions and government agencies.
4. Selection and appointment of a Bond Issuance Team – the Bond Issuance Team is composed of:
i) Managing Underwriter – an investment house or a universal bank which shall sell all the bonds in a
firm basis and assumes the marketing risk, including purchase of any unsold portion; ii) Trustee – the
custodian of the Trust Fund, representative of bondholders, acts as bond registrar and paying agent;
iii) Guarantor – the credit enhancer which shall pay the interest income and the principal of the bond
issued to the bondholders in case of payment default by the LGU; and iv) Bond Counsel – a reputable
law firm hired by the LG to render opinion on legal matters pertinent to the bond issue.
5. Designing the features of the LGU Bond – includes: i) features of the offering (size of the bond,
security/collateral, interest rate, terms of the bond, and credit enhancements such as sinking fund
and/or guarantee); and ii) terms and conditions of the offering (offering price, amount and terms of
issue, interest rate, and debt service).
6. Sanggunian ordinance approving final bond terms
7. Securing the guarantee for the LGU Bond – a guarantee may be arranged with the LGU Guarantee
Corporation (LGUGC). LGUs must pass a maximum guarantee credit rating requirement under the
LGUGC internal LGU Credit Screening and Rating System.
8. Sanggunian Panlalawigan approval of the LGU Bond issuance by a component city or
municipality – a component city or municipality shall secure Sanggunian Panlalawigan approval of
the municipal bond issuance in accordance with Sec. 237 of the Local Government Code. The
authority of the Sanggunian Panlalawigan is confined to the questions of law and not questions of fact.
The Sanggunian Panlalawigan cannot question the wisdom or propriety of an ordinance approving a
bond flotation.
9. Bangko Sentral ng Pilipinas (BSP) approval – the LGU or Financial Advisor or Managing
Underwriter shall secure a favourable opinion from the BSP on the probable effects of the proposed
issuance of the municipal bond on monetary aggregates, price levels and balance of payments.
10. Preparation of the Official Statement, Primer and Bond Documents – the official statement that
the LGU must issue is the offering prospectus by the Financial Advisor or Managing Underwriter to
provide information regarding the LGU and bond offering. It is a full disclosure statement with the
immediate objective of providing complete, timely and objective information that will allow investors to
assess the bond issue and thus make an informed investment decision.
11. LGU Bond offering and issuance – the Managing Underwriter shall underwrite and manage the
public offering, distribution and sale of the municipal bonds. The schedule of the offering must
reconcile with the condition of the financial markets especially the prevailing interest rates of
comparable investment instruments, the schedule of other securities offerings and the magnitude of
the issue.
12. Debt servicing and payment of the principal to bondholders – the Trustee, as paying agent, shall
make regular payments to all the bondholders in accordance with its registry list and interest payment
schedule from the trust or sinking fund, as the case may be. In the event of a default situation when
the LGU shall not be able to meet interest or principal payments from the trust/sinking fund, the
Guarantor shall provide the funds to meet payment schedules in accordance with the guarantee
agreement.

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8.5.2 Basic Features of Public Private Partnership (PPP) Options

SERVICE MANAGEMENT LEASE

CONCESSIONS BOT JOINT VENTURE
CONTRACTS CONTRACTS CONTRACTS
Scope Multiple contracts Management of Responsibility for Responsibility for all Investment in and Public and private
for a variety of entire operations or management, operations and for operation of a sector partners can
support services a major component operations, and financing and specific major either form a new
such as meter specific renew als execution of component such company or assume
reading, billing, etc. specific investments as a treatment joint ow nership of
plant an existing
company through a
sale of share to one
or several private
investors
Asset ownership Public Public Public Public/ Private Public/ Private Public/ Private
Duration 1-3 years 2-5 years 10-15 years 25-30 years Varies Varies
O&M Public Private Private Private Private JV company
responsibility
Capital invesment Public Public Public Private Private JV company

Commercial risk Public Public Shared Private Private Shared

Overall level of Minimal Minimal/ moderate Moderate High High High
risk assumed by
private sector
Compensation Unit prices Fixed fee, Portion of tariff All or part of tariff Mostly fixed, part Profit sharing based
Terms preferably w ith revenues revenues variable related to on JV agreement
performance production
incentives parameters
Competition Intense and ongoing One time only; Initial contract only; Initial contract only; One time only; One time only;
contracts not subsequent subsequent often negotiated competitive
usually renew ed contracts usually contracts usually w ithout direct selection or
negotiated negotiated competition negotiated
Special features Useful as part of Interim solution Improves Improves operational Mobilizes Real partnerships of
strategy for during preparation operationala nd and commercial investment the public and
improving efficiency for more intense commercial; efficiency; Mobilizes finance; private sectors that
of public company; private participation Develops local staff investment finance; Develops local match the
Promotes local Develops local staff staff advantages of the
private sector private sector w ith
development the social concerns
Problems and Requires ability to Management may Potential conflicts How to compensate Does not Government's dual
challenges administer multiple not have adequate betw een public investments and necessarily roles as ow ner and
contracts and control over key body w hich is ensure good improve regulator can lead
strong enforcement elements, such as responsible for maintenance during efficiency of to conflict of
of contract law s budgetary investments and last 5-10 years of ongoing interest; Tendency
resources, staff the private operator contract operations; May to be directly
policy, etc. require negotiated or to
guarantees follow a less formal
procurement path,
w hich can lead to
concern for
corruption

Source: ADB PPP Handbook and JV Guidelines

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8.5.3 Items for Review During Evaluation of PPP Projects

Determining the feasibility of a proposed PPP project should focus on the following aspects:
Market aspect. Appraisal should be made of the demand of the project in terms of geographic coverage
and target groups.
Technical aspect. The appraisal should determine whether the design is suitable in terms of capital
expenditure per head, scale in relation to market, skills requirements, and input requirements against
available domestic materials and products in relation to target markets. It should also show the superiority
of this project design over other alternatives.
Economic and financial aspects. The validation of the economic and financial indicators is one of the
most critical aspects of project appraisal. The validation should focus on the rationality of the assumptions
used in estimating costs and benefits, the validity of the methodologies used applied, and the accuracy of
the formulae and computations. The main objective is to ensure an acceptable degree of accuracy of the
feasibility indicators.
Economic analysis attempts to assess the overall impact of a project in achieving its larger social
objectives. It builds on discounted cash flow analysis. With or without revenue sharing, the PPP project
must be economically and socially desirable for the government to endorse it. The various indicators of
project worth such as the NPV, IRR and benefit-cost ratio must be reviewed. For PPP, these indicators are
often considered more important than the indicator of financial viability by the government. A project’s IRR
must meet the hurdle rate of 15%, whether it is for public or PPP implementation.
Political acceptability and legality. A major consideration in judging the operational feasibility of a
project is the political acceptability of its activities, as well as the legal authority of the LGU or private
proponent to execute them. Not only must the project enjoy the full support of local leadership, but the
project proponents must also ensure that benefits accrue to its intended clients.
Environmental impact, gender responsiveness and social soundness. The LGU appraisal of social
soundness of the project should consider:
o compatibility of the project with the sociocultural environment in which it is to be introduced;
o likelihood that practices or institutions introduced among the project’s initial target population will be
diffused among other groups;
o social impacts or distribution of benefits and burdens among different groups, both within and outside
the project area; and
o the differential impact of the project on women and men due to gender-based roles, responsibilities,
access to resources, and power relations, as well as needs and constraints.
 Organization and management aspects. A person or organizational unit within the LGU should be
given the responsibility for project management, and equipped with all the necessary manpower and
logistical support to supervise project implementation. Lines of authority and responsibility should also be
clearly defined. For some PPP projects, which tend to be large in scale, the demands on the existing
structure and resources of LGUs may exceed their capacities. Planning for project implementation and
operation should be flexible enough to include private sector inputs later on, but comprehensive enough to
pinpoint relationships with other implementing agencies. Also important is the appraisal of operational
aspects, which should consider non-quantifiable but equally important factors that may impinge on the
project’s implementation and operations.

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