Value of Water Supply Improvement
Attributes
Medium: Water
Country: Philippines
Analytical Framework(s): Contingent Valuation
Unit(s): Mean WTP
Study Date: 2004
Publication Date: 2005
Major Result(s)
| Resource/Environmental Good | PHP, per month per household (2004) |
PHP, per month per household (2014)1 |
USD, per month per household (2014)2 |
|---|---|---|---|
| Mean WTP to improve water supply3 | 29.00 | 43.34 | 0.97 |
About the Inflation Adjustment: Prices in Philippines (PHP) changed by 49.45% from 2004 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.49 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2025) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.
Study Note: This study consists of two parts. Part I discusses the results of a contingent valuation (CV) survey. This CV survey estimated the value that Metro Manila residents placed on the water supply improvements that will result from better management of the Angat, Ipo, Umiray and La Mesa watersheds. Part II focuses on the institutionalization of the proposed water user fee developed in Part I.
Study Details
Summary: The contingent valuation study was conducted among 2,232 respondents. These people were drawn from the 13 municipalities and cities in Metro Manila that draw water from the four watersheds. There are two water distributors in the area: Maynilad Water Services, Inc. and the Manila Water Company, Inc. About two thirds of the respondents were connected to either of these two water distributors. The study found that Metro Manila residents have a low level of awareness about watersheds, but possess a good grasp of the role forests play in sustaining water supply. About 60% of the respondents revealed a willingness to pay for improved watershed management. The mean willingness to pay, estimated through a logit model, was found to be P29/month/household. The respondents' willingness to pay was affected by factors such as bid amount, the water distributor serving the household, additional water expenses, age, income and house ownership. They were willing to pay mainly because they wanted a reliable water supply for both present and future generations, and also because they wanted the watersheds to continue providing a range of environmental services. Some respondents were not willing to pay because of income constraints and because they thought that watershed management should be the government's responsibility. The respondents said that they would prefer a water user fee to be added to their monthly water bills, with the proviso that this should be used solely for the management of the four watersheds supplying water to Metro Manila.
Site Characteristics: Metropolitan Manila, with a population of more than 11 million, has been experiencing problems supplying water to its residents and industries. These problems are especially pronounced during the dry season, when water rationing becomes common in many areas of the metropolis. Rapid population growth, growing incomes, industrialization, commercialization and urbanization have all contributed to an overall increase in demand for municipal and agricultural water. Unfortunately, this increase in demand has not led to a parallel improvement in the quantity and quality of water available.
Comments: The limitations of the study are the following: 1. The exclusion of barangays with rich subdivisions from the sample. The National Statistics Office (NSO) excluded barangays with rich subdivisions from the sample that was used because, based on experience, these subdivisions do not allow surveys for security reasons; and 2. Some information was based on memory recall. Some information, e.g. income, water consumption, and water expenditures, was based solely on respondents' recollection.