[Co-sponsored] by Local-Regional Studies Network - Cordillera Studies Center.

Includes bibliographical references (pages 27-33)

Payment for environmental services (PES) as an economic instrument to promote conservation and poverty reduction goals is relatively young in the Philippines. One of the earlier applications of PES in the country is on watershed services to support hydropower generation, and this is dominantly government-led. This paper analyzes the potential of developing a private-led PES scheme for hydrological services in the Eddet–Bashoy–Ekip Subwatershed of Mt. Pulag National Park. A combination of focus group discussions, key informant interviews, secondary data gathering, and case analysis comprise the methods of the study.
Government-led PES schemes in hydropower generation in the Cordillera Administrative Region are evident in run-of-river type and reservoir-based operations. Guided by the Electric Power Industry Reform Act, the socio-economic and environmental benefits from these schemes are confined to host communities. The nature of hydrological services in the Mt. Pulag Subwatershed in the Cordillera Region indicates that activities in communities beyond the hosts affect the operation of a reservoir-operated hydropower plant in the site, suggesting the need for a private- led PES scheme. The critical elements of this scheme in terms of the defined environmental service, buyer of the service, supplier of the service, and conditionality or payment are already present in the subwatershed. More importantly, this hydropower company is willing and ready to enter into a PES scheme with the indigenous communities as part of its broader corporate social responsibility program that considers voluntary payments over and above payments to host communities. Recommendations for a successful PES scheme include harmonizing tenure arrangements given the plurality of tenure instruments in the area, conducting readiness and capability-building activities for PES participants, and strengthening research to address data gaps on hydrological attributes and soil erosion.