We’re willing to pay to protect our water

Households in Oroquieta City in the Philippines have indicated their willingness to pay more on their water bills to preserve the quality and amount of their supply, say Margaret Calderon, Kharmina Anit, Leo Palao and Rodel Lasco 


Watersheds play a critical role in providing fresh water to humankind: they collect and store water from rainfall and melting snow. For free.

In the Philippines, we have about 135 watersheds, according to the Department of Environment and Natural Resources. They provide water for agricultural and domestic use, including drinking, bathing and washing clothes. However, many areas of the country report water shortages, including the National Capital Region.

One way of understanding the severity of the problem is to consider that, even though it is a tropical country, the Philippines ranks second lowest in the world in terms of water availability, with only 1907 cubic metres per person per year. There are several reasons for this. From 2000 to 2010, the population increased at a rate of 1.9% annually and the demand for water also escalated. Second, most watersheds are highly degraded: of the 16 million hectares of upland areas only about 7 million are covered with forests; the rest are open land covered with grass or farms. This has resulted in massive flooding, siltation of lakes and agricultural areas, and loss of lives.

About 24 million people live in these upland areas. These people are the de facto managers of the water-producing environments for millions more people downstream. A key challenge, therefore, is how to optimize the role of upland communities in rehabilitating and conserving watersheds.

One promising approach being tested in many developing countries, including the Philippines, is called ‘payments for ecological (or environmental) services’. This is a direct conservation approach that supports positive environmental activity by upland communities through payments from downstream communities who benefit from the ecological ‘service’ provided, in this case, water supply.

Putting a price on ‘raw’ water is an effective way of managing its use both up- and downstream. However, not all beneficiaries of the water supply, particularly domestic users, are willing or capable of paying an additional tariff. To test just how much people might be willing to pay, we surveyed domestic water users in the Layawan watershed of Oroquieta City.

Household interview

Specifically, we evaluated the level of awareness of the water users about the importance of watersheds for sustainable water supply, identified the factors that affected willingness to pay, and assessed how the mode of payment (mandatory or voluntary) and the information given on who will pay (all water users or domestic water users only) affected people’s willingness to pay.

The results showed that more than 50% of the respondents voted positively to pay a certain amount for the conservation of the Layawan watershed: around Php 55 (± USD 1.35) per month or 0.68% of their average monthly household income, which is about Php 8200 (± USD 201.32). This figure can act as a guide for a fee that could be collected to pay for an improved, good quality water supply from the watershed.

This willingness to pay is probably a reflection of what else we discovered, that is, in general, the people of Oroquieta have a high level of environmental awareness. The majority of the people we surveyed agreed that it is important to manage and protect the watershed in order to have a sustainable supply of water. Furthermore, Oroquieta City residents were willing to pay because they wanted the watershed to continue producing environmental services such as conserving biodiversity, providing recreation areas, sequestering carbon and controlling floods, the latter in particular because of the flooding in Cagayan de Oro and Iligan City in December 2011, which was said to be caused by illegal logging.

On the other hand, those who were not willing to pay felt this way mainly because they couldn’t afford it. A large percentage of the total households interviewed were from rural areas and had relatively low income.

In terms of fund management, the people surveyed were informed that the fees would be deposited in the Integrated Protected Area Fund managed by the Protected Area Management Bureau, a multi-sectoral body comprised of representatives from government and non-governmental organizations, people’s organizations, indigenous people, academe, and the religious sector. Generally, those surveyed didn’t have any issues with this. For the collection of the fee, a big majority (83%) liked the idea of a surcharge on their water bill. Those who didn’t like the idea just didn’t want to have a larger water bill and preferred other collection methods.


Edited by Robert Finlayson


Read the article

Calderon MM, Anit KP, Palao LK, Lasco RD. 2013. Households’ willingness to pay for improved watershed services of the Layawan Watershed in Oroquieta City, Philippines. Journal of Sustainable Development 6(1):1–18.





This work is related to the CGIAR Research Program on Forests, Trees and Agroforestry

Rob Finlayson

Robert Finlayson is the Southeast Asia program's regional communications specialist. As well as writing stories for the Centre's website, he devises and supervises strategies for projects and the countries in the Southeast Asia region, including scripting and producing videos, supervising editors and translators and also assisting with resource mobilization.

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