The Philippine Competition Commission’s (PCC) study revealed on Thursday that while water distribution is characterized as a natural monopoly, there are various WSPs in other areas due to supply gaps or infrastructure limitations that depend on geographic conditions.
The study assessed the competitive landscape within the country’s residential water distribution sector and analyzed current market dynamics, including the nature of competition among water service providers (WSPs) and how this affects consumer choice.
The market structure required the use of “competition in the market” frameworks, spanning from the district level, which provides the broadest perspective, down to the household level, representing the smallest unit.
At the district level, the study found that market entry is programmed through competitive selection processes or legislative mandates, such as public bidding for concessionaires or the legislative creation of local water districts.
At this level, consumers generally have limited influence over the selection of their WSP.
On the other hand, at the household level, the regulatory framework does not legally bind households to a single provider, as 73.6 percent of residents surveyed nationwide reported a complete absence of alternative WSPs in their area.
Even where alternative WSPs are available, transitioning to a new provider remains impractical due to high costs and limited information.
To make the market more competitive and consumer-friendly, the study emphasizes the need to enhance consumer choice and reduce barriers to switching WSPs, as well as to provide recourse for consumers facing issues such as poor service quality, low water pressure, or non-potable tap water.
Furthermore, it recommends a centralized and user-friendly online platform that provides performance indicators to help developers and individual households compare available options.
The study is part of PCC’s strategic effort to evaluate key economic sectors, address emerging market vulnerabilities, and advance evidence-based policy interventions for a sustainable, fair, and inclusive market for Filipinos.
