The proposed recommendations in the report aim to facilitate a co-ordinated yet flexible approach, recognising the diversity of the Philippine context and the challenges associated with transition. Progress can be purposefully and gradually realised by utilising agile management approaches and regulatory tools, such as non-binding instruments, enhanced collaboration, iterative learning and experimentation, inclusive and participatory design and responsive regulatory designs. Examples of relevant agile approaches and tools are described in more detail below.
Agile approaches are helpful for designing adaptable tariff models that remain fit-for-purpose as systems (and consolidation efforts) evolve. Agile tariff models enable action under uncertainty, allow different types of WSPs to move at different speeds and create space for feedback and adjustment. The following examples illustrate how agile approaches and tools may be applied in the Philippine water supply and sanitation sector:
Design national standards and methodologies as modular and scalable. This scalable approach supports progressive enhancement over time without reinvention.
Target progressive implementation via a phased roll-out, with operational reforms prioritised in “ready” regions and capacity-building prioritised for other regions. A phased roll-out may involve the introduction of light-touch guidance and piloting, as well as rolling adoption windows (e.g. where new rules are implemented in next tariff review period or financing period).
As part of a phased and modular approach, providers may be proactively differentiated by type and maturity level in the early stages of implementation, allowing for convergence over time while maintaining proportionality:
a. For LGUs with no formal model, apply simplified guidance and technical assistance;
b. For smaller WDs, set ambitions for cost-recovery and benchmarking incentives (low-complexity model); and
c. For larger providers, set ambitions for full performance-linked model (advanced model).
Avoid over-engineering the early stages of reform and remain focused on clarifying objectives and core parameters and aiming for the lowest complexity – only introduce complexity when absolutely necessary, the data and tools are available to support processes and capacities are sufficient.
An agile approach may also involve:
d. Designing reopener clauses, indexed adjustments and exceptional review triggers, to allow for course correction without needing rehaul of the overall design; and
e. Institutionalising monitoring, feedback and revision as a formal part of the regulatory cycle and create mechanisms for WSP and user input.
Table A B.1. summarises the agile principles and their application to the Philippine context.