Assessing the Total Economic Value of Improving Water Quality to Inform Water Resources Management: Evidence and Challenges from Southeast Asia

Population growth, high rates of economic development and rapid urbanization in the developing countries of Southeast Asia (SEA) have resulted in degradation and depletion of natural resources, including water resources and related ecosystem services. Many urban rivers in the region are highly polluted with domestic, industrial and agricultural wastes. Policymakers are often aware of the direct value of water resources for domestic and industrial consumption, but they often underestimate the indirect value of these functions, since they are not exchanged in the market and do not appear in national income accounts. Underestimation of pollution and over-exploitation of water resources result in a loss of these benefits and have adverse impacts on nearby residents, threatening the long-term sustainable development of natural resources in the region. Behind these constraints lies a lack of knowledge (ignorance) from governments that a clean water environment could bring significant economic benefits. This study has been initiated to tackle this issue and to foster a more rational approach for sustainable urban development in Metro Manila in the Philippines. We applied a Contingent Valuation Method (CVM) based on Computer-Assisted Personal Interviewing (CAPI) technique. Results show that users are willing to pay up to PHP 102.42 (2.18) monthly to improve quality of urban waterbodies whereas nonusers are willing to pay up to PHP 366.53 (7.80) as one-time payment towards water quality improvement. The estimated monetary value of water quality improvements would be a useful variable in cost-benefit analyses of various water quality-related policies, in both public and private sectors in Metro Manila. This survey design could serve as a useful template for similar water quality studies in other SEA countries.