Philippine (PAWD) Experience in Benchmarking

ENGR. PABLITO PALUCA, PAWD’s Technical Committee Chair, gave an overview of PAWD’s benchmarking experience. Benchmarking is an important tool to improve the services of Philippine water districts (WDs) which are classified into 6 categories - Small, Average, Medium, Big, Large, and Very Large. WDs have been benchmarking using the criteria prescribed by the Local Water Utilities Administration (LWUA), the agency that regulates and provides financing to WDs.  LWUA’s criteria, however, are mainly focused on ensuring and monitoring loan repayment, i.e., collection efficiency, collection ratio and non-revenue water.  Through the years, the Philippine Association of Water Districts (PAWD) realized that benchmarking of WDs should not be limited to these narrow parameters.
PAWD’s first benchmarking on a national scale was undertaken in 2005. Its technical committee designed a 4-page, back-to-back questionnaire.  The task had not been easy; the aim had been to get as much information that might be of use in future.  Another reason for the lengthy questionnaire was so that WDs can save on mailing costs.  Of the 132 WDs, or 29% of total number of WDs, which participated in the benchmarking activity, 71% came from ‘Very Large’ WDs. ‘Small’ WDs, which make up the majority, only had a 17% participation rate which indicated that they needed help in benchmarking. The constraints encountered in the benchmarking were: (a) Non-submission of survey forms (WDs hesitant to divulge records, Non-availability of records, Misrouted or misplaced forms); (b) Understanding the questionnaire and unclear definitions of criteria used; (c) Reliability of data; (d) Encoding and processing of data.
Using 2005 benchmarking data, PAWD was able to demonstrate the trend of tariff against WD size which shows that economies of scale also apply to WDs. Larger WDs are expected to be more efficient and hence tend to have lower water rates. Smaller WDs tend to have higher rates which decrease as WDs get bigger in size. The average water rate is PhP 140-150, or PhP 15/m3, based on 10m3 minimum. If a very large WD has very high tariffs, then there should be a justification, e.g., a new project.
Eighty-eight (88) WDs participated in the 2006 benchmarking. PAWD used the benchmarking data as basis for its annual PAWD Awards.  Some notes and challenges in the 2005 and 2006 benchmarking experience:  (a)  Lower 3 WD categories (Small, Average, Medium) have low participation which may be due to the difficulty in preparing the financial statements as well as other reports required by LWUA.  (b) Data of upper 3 categories has less errors and more reliable.  (c) Validation of data is still a problem due to lack of time of PAWD Technical Committee, hence our proposal that benchmarking already be made a regular function of PAWD. The trainees from this benchmarking project can also assume the role of benchmarking arm of PAWD. (d) Encouraging other WDs to join the benchmarking.  (e) Coordinate with LWUA to revise the Monthly Data Sheet (MDS) to contain uniform data for benchmarking. (f) Interpretation of benchmarking results to WD personnel. PAWD and LWUA still need to do much training along these lines.
IBNET, the international benchmarking network financed by World Bank, expressed an interest to link PAWD benchmarking database to IBNET. The offer of IBNET was three-fold:  Help PAWD check its benchmarking data; Serve as 3rd party evaluator for the PAWD Awards; Cash incentive of US$20,000 for PAWD.
Water districts may or may not use all the indicators PAWD utilizes and choose only those applicable to their areas; the indicators can serve as guide. The interpretation of benchmarking results to WD workers is also important; the results should prompt appropriate action. Understanding the purpose of benchmarking and identifying the parameters will improve the performance of water utilities. Workers should encourage their WDs to join PAWD’s benchmarking.

pawd benchmarking_paluca-oct08.pdf191.46 KB
pawdBMexperience_paluca-oct08.doc153 KB