2006 was a year of sustained growth for the Company.

Water supply coverage has increased to 87.5% of the population with total connections now at 35,000, from a modest 20,000 when Subicwater commenced operations nine years ago.

The completion of the 19Mld rapid gravity filters in the City Water Treatment Plant has tremendously improved the filtering capacity and efficiency of the old plant, thus enabling Subicwater to supply high quality water to its growing number of customers at the northern part of Olongapo City.

Improved management of the distribution system led to reduced water losses and better water supply pressure to customers. Non-revenue water has significantly improved in the year from 37% to 31%. Average pressure in the Freeport was maintained at 41 psi while that in the City improved to 17 psi from 14.8 psi. Due to better distribution management, water production dropped by 7% but enough to meet a modest growth in demand.

New IT innovations enabled Subicwater to increase productivity and to respond faster to customers’ complaints and enquiries. The acquisition of new meter reading devices together with a new billing and collection system allowed the simultaneous reading, billing and delivery of water bills. Arrangements with local banks paved the way for the acceptance of over-the-counter payments. These led to improvement in customer servicing, from 6 days to 2 days in the City and from 5 days to 1 day in the Freeport.

Staff efficiency improved as measured by the ratio of staff per thousand active connections which was reduced from 5.84 last year to 5.36. This is expected to get even better in the future due to the outsourcing of new connections, leak repairs and road restoration.

The Company is now in a more attractive position to lenders and other parties who may take interest in financing its multi-billion capital expenditure plan. This Plan is geared towards addressing the water supply needs of the growing number of investors in the Subic Bay Freeport Zone and the provision of sewerage services in Olongapo City to preserve and protect the pristine waters of Subic Bay.