Journal of Environmental Science and Management 16(2): 1-10 (December 2013) ISSN 0119-1144 Willingness to Pay for Conserving Layawan Watershed for Domestic Water Supply in Oroquieta City, Philippines Aisa O. Manlosa 1 , Nicomedes D. Briones 2 , Antonio J. Alcantara 2 and Leonardo M. Florece 2 ABSTRACT The sustainability of domestic water supply from the Layawan Watershed in Oroquieta City critically depends on past and present conservation activities and the availability of funds from stakeholders such as households, communities, non-government organizations, private entities and government agencies. This study determined the willingness to pay (WTP) particularly of households in Oroquieta City to fnance conservation projects in Layawan Watershed to ensure the sustainability of domestic water supply. A household survey of randomly selected 278 respondents was conducted using the dichotomous choice referendum format. The Heckman’s two-stage analysis for the parametric estimation of mean WTP yielded the values of PhP 4.00, PhP 6.00 and PhP 7.00 per month for mandatory, voluntary and pooled data sets, respectively. The households are willing to contribute funds for conserving Layawan Watershed as supported by the total WTP of Oroquieta City’s population that ranges from PhP 117,845.00 (from lower bound estimate of PhP 2.00) to PhP 471,380.00 (from upper bound estimate of PhP 8.00) in fve years, discounted at 6 %. Key words: watershed conservation, willingness to pay, contingent valuation, Mount Malindang Range Natural Park INTRODUCTION The Mount Malindang Range Natural Park (MMRNP) is an extensive natural forest in the Zamboanga peninsula. It is rich in biodiversity and source of ecosystem services supporting an estimated population of one million people in three provinces namely Misamis Occidental, Zamboanga del Norte, and Zamboanga del Sur. The forest cover in Mount Malindang has steadily declined over a number of years due to various stressors. This continued despite the passage of Republic Act 6266 setting the area aside as a National Park and Watershed Reserve in June 19, 1971 and Proclamation Number 228 proclaiming it as a natural park in August 2, 2002. The Layawan Watershed, which is drained mainly by Layawan River, is a part of the extensive Malindang landscape, being one of 15 major sub-catchments draining MMRNP. This study on the economic valuation of Layawan Watershed looked into the willingness to pay (WTP) of stakeholders in Oroquieta City to assess the potential of raising locally sourced funds for community-based conservation projects that will be implemented in order to ensure sustainability of the city’s domestic water supply. Sustainability pertains to securing both the quantity and the quality of water for the present and future generations. While a number of researches on the biodiversity and the indigenous communities have been conducted in the MMRNP, economic valuation of its natural resources remains relevant because of its potential for payments for ecosystem services. The specifc objectives of the study are: 1. To determine if the nature of the payment scheme (mandatory and voluntary) and the provision of a money- back-guarantee signifcantly affected the willingness to pay of the respondents; and 2. To assess the consistency of relationships observed between independent variables and WTP with relevant economic theories. MATERIALS AND METHOD A survey was conducted in Oroquieta City, the administrative capital of the province of Misamis Occidental. Oroquieta City is a fourth class city by income classifcation. It is bounded by the municipality of Lopez Jaena on the north, Aloran on the south, Concepcion on the southeast, and Sapang Dalaga on the northwest. The city covers a total area of 23,788 ha and has a population of 68,945 (National Statistical Coordination Board 2010) in 47 barangays. A total of 278 households were selected using the 1 Gender Research Analyst, The WorldFish Center, SEARCA, Los Banos, Laguna, Philippines. E-mail:a.manlosa@cgiar.com (corresponding author) 2 Professor, School of Environmental Science and Management, University of the Philippines Los Baños, College, Laguna