Basco, a sixth class municipality and the capital town of the province of Batanes was confronted with the problem of having only 3 hours of water supply per day. A new mayor was elected in 1988 based on a campaign promise to make water supply available 24 hours a day. The municipal government undertook a study and found out that Basco had abundant water resources. Inadequate water supply was due to defects in the distribution system and wasteful use of water by residents. Having identified the causes, the municipal government undertook the following: rehabilitation of the water source; re-routing of the distribution lines; replacement of the water pipes from six (6), four (4) and three (3) inches to three (3), two (2) and one and a half (1.5) inches for stronger water pressure; repaired the intake box and reservoir; replacement of rusty and leaking pipes; and proper and regular chlorination. And most important was the mounting of water meters per user/concessionaire to encourage wise use of water.

      As a result, water had been available for 24 hours daily covering 99 percent of potential beneficiaries in the service area. The annual gross income from water fees increased from P51,000 in 1987 to P827,316.78 in 1996. Collection fee was high because of strict enforcement of the agreement between the municipal government and the concessionaires if an account is more than 15 days overdue, connection was cut and a reconnection fee of P50.00 was charged. The average monthly water was P20.00, the cheapest in the country according to the records of the LWUA. The water fees represented 45 percent of the local revenues generated by the municipal government (a net income of P250,909.78 in 1996), which was used to finance development projects of the municipality. Basco had shown a good model of an effective LGU managed water system.