Nearly thirteen million of the over eighty-four million Filipinos lack access to improved water supply.(Department of Health, 2003) Natural disasters such as typhoons, monsoons, landslides, and volcanoes, as well as governance problems such as watershed mismanagement, create a breeding ground for water related diseases, such as cholera, hepatitis A and typhoid fever. Up to 58% of Philippine groundwater shared by half of the population is contaminated with coli form and needs treatment. (Philippine Environment Monitor, 2003) The rest is surface water, which is easily contaminated by lack of sanitation and exposure to the elements. Diarrhea caused mainly by waterborne pathogens is the highest cause of morbidity and the third-highest cause of mortality of children under five (DOH, 2003). This is unfathomable in a country where fresh water from rainfall is often in excess.

The challenges of supplying clean water to every Filipino are further wrought with community water systems in disrepair, local corruption in government, substandard water resource infrastructure and the lack of Water and Sanitation Hygiene (WASH) education. The annual economic losses caused by water pollution are estimated at US$1.3 billion. These include US$500 million for health. (World Bank Group, 2003) 31% of illnesses from a five-year period were from water-related diseases. (Department of Environmental and Natural Resources, 2003) Prohibitive costs of conventional water technologies are a major deterrent in supplying clean water to the people.

It would require US$5 billion a year for the next ten years to enact the Clean Water Act. Because of the Philippines growing deficit, it remains unimplemented or under implemented. (World Bank, 2003) With emerging water quality problems, LGUs are challenged by high investment and operating costs for community systems, limited willingness to pay by users, and lack of funding.