Although the Metro Manila Water and Sewerage System (MWSS) has the responsibility for providing urban water and sewerage services in Metro Manila, actual service coverage has been low particularly for sewerage and quality of service has been poor despite subsidies from the national government. This paper examines the impact of the recent MWSS privatization on the coverage and quality of water and sanitation services and ultimately on the groundwater levels, water pollution, human health, and welfare of the poor. Analysis of the performance targets and other provisions of the MWSS concession agreement together with revised projections of water demand indicates that a significant share of water supply will have to be met through groundwater pumping by individual households, commercial, and industrial establishments and by private water markets. Moreover, the exception of a significant number of households who already have tap water from own sources, private water markets, as well as industrial and commercial establishments from the performance targets on sewerage coverage suggests that water pollution may not be adequately addressed.