Willingness to pay for sanitation services in Dagupan City, Philippines

Abstract

Using the Contingent Valuation Method (CVM), the study looks at the septage management and sewerage services demand of households with latrines in Dagupan City, Philippines vis-à-vis the cost of providing these services. The survey covers a total of 1,200 respondents for the septage and sewerage demand study. For the septage and sewerage studies, income was shown to significantly influence willingness to pay (WTP). WTP was also found to increase across income groups, indicating the plausibility of implementing a socialized pricing scheme for the septage and sewerage fees. Another important implication of the results is that increased demand for sanitation facilities would only take place as general income levels of Dagupan City improve. Under certain assumptions, the individually rational and financially viable Septage Fee is around PhP 46/month with optimal desludging frequency of 3 yrs. This means that a self-financed Septage Program is possible for the city. However, the case is different for the Sewerage Program since none of the proposed fees (including the average WTP of PhP 102/month for the whole sample) is sufficient to cover the huge investment costs associated with a self-financed sewerage infrastructure. Thus, the Local Government Unit (LGU) has to source funds elsewhere.