Water privatization in Metro Manila is regarded as a successful case of utility reform, with notable improvements in service delivery. Yet its health impacts, especially for children vulnerable to waterborne diseases, remain underexplored. This paper assesses whether the reform reduced diarrhea incidence among children under five. Using nationally representative data from the 1998 and 2002 Annual Poverty Indicators Survey (APIS), we apply a difference-in-differences (DD) strategy to estimate the causal effect of privatization. Results indicate that the reform reduced diarrhea incidence among children under five by 1.8 to 2.1 percentage points, equivalent to nearly half of the prevailing proportion of children with diarrhea in 1998. While privatization in Metro Manila delivered measurable short-term health gains, it also underscored the importance of strong governance, regulatory oversight, and institutional capacity to sustain such benefits. Private participation may therefore be considered only as part of a broader strategy to improve water service delivery and health outcomes under well-functioning regulatory and institutional frameworks.

Access the full paper here:   https://doi.org/10.1007/s42495-025-00164-4

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