The article describes two case studies in the Philippines to conserve watersheds. The city government in Baticulan Watershed on N-E Negros levied a fee of PhP 0.75 on water bills. A portion of the amount is allocated to the Watershed Development and Environmental Protection Fund, which supports the implementation of the City Master Development Plan. The remaining fund was used for watershed rehabilitation. In Manupali Watershed, the Local Government enacted a policy to conserve farming. The incentives were provided to the individuals and groups that meet the criteria for sustainable agriculture.
A success factor is the developments of locally transacted agreements which have more potential in meeting voluntary and conditionality criteria of an effective PES system. Caution is required to ensure that both buyers and sellers are aware of the reasons for PES not yet another tax scheme.
