Supporting Sustainable Development Pathways in the Philippines Through Hydroeconomic Modeling

As populations and economies grow and temperatures rise, demand for water is increasing around the globe. Competing uses for water—agriculture, food processing, energy generation, manufacturing, and households, among others—can lead to critical water shortages. Achieving water security goals means understanding how these systems interact.

At RTI, our work in water security aims to empower decision-makers who deal with these interrelated human and natural systems. We recently developed a global suite of hydrologic and economic tools and applied them to the island of Mindanao in the Philippines. Known as the “Breadbasket of the Philippines,” Mindanao produces about 40 percent of the country’s agricultural output. Along with the expansion of agriculture, Mindanao has experienced high population growth in its two major economic hubs, Davao City and Cagayan de Oro City. Demand for water is outpacing development of water transport, treatment, and storage infrastructure.

Under the United States Agency for International Development (USAID) Building Low Emission Alternatives to Develop Economic Resilience and Sustainability (B-LEADERS) Project, we studied the intersection of competing food, energy and water needs. First, we needed to understand how Mindanao gets its water. We applied the RTI Hydrologic Resources Assessment Model (HydroRAM), a global water resources model, to calculate a 20-year, daily surface water balance for 844 subwatersheds within eight major priority river basins. The initial hydrologic assessment used global, remotely-sensed datasets, but was improved gradually over the project course as we closely collaborated with key government partners and gained access to local datasets.  

Mindanao is endowed with abundant water resources. The eight major watersheds on the island cover a broad range of topography, climate, and land surfaces, resulting in a diverse hydrologic portfolio. Climate change will result in less surface water for all of Mindanao. The island can also expect to see major changes in seasonal rainfall patterns. Most watersheds will experience an intensification of the monsoon effects, with the wet season becoming wetter and dry season becoming drier, likely leading to more frequent seasonal droughts and floods.

Mindanao is planning now for its future development. To assess the tradeoffs of alternative development pathways and climate-change scenarios, we developed a hydroeconomic simulation framework linking hydrologic flow from HydroRAM with an assessment of water demands across different uses. Individual demand scenarios were estimated on a monthly time scale within each of the 844 subwatersheds for agriculture, households, and energy sectors. Using this approach, we identified areas that could suffer water shortages. We can expand this approach to focus on the economic loss of unmet demand for water and the potential tradeoffs across alternative future scenarios.

Results show that even in a relatively water-abundant region like Mindanao, water stress leads to tradeoffs among water uses. Most of these shortages last less than a year and reflect seasonal variability in water supply due to the monsoon climate. Under climate change, shortages intensified and occurred in more places. The island’s relative lack of infrastructure makes household consumption particularly vulnerable to increased competition for water. Results suggest that investing in more “plumbing” infrastructure for Mindanao, such as reservoirs and inter-basin transfers, can help alleviate shortage by storing water during times of abundance and moving water from wet areas to dry areas. Alternatively, Mindanao could choose to focus on demand management practices and reducing non-revenue water losses to increase resiliency without the high cost of storage and transfer projects. Emphasizing irrigation water demand management could have wide-reaching impacts. The Philippine Department of Agriculture can promote the adoption of more efficient irrigation systems to allow farmers to lessen their reliance on surface water resources and rely more heavily on groundwater resources. Regional and provincial governments can encourage steering crops that demand high amounts of water to wet areas instead of dry areas.

Our hydroeconomic framework has helped Mindanao explore alternate water management scenarios, identify “hot spots” of water stress with high demands and limited supplies, and assess long-term water security. While endowed with abundant water resources, the island has experienced water shortages in the past, and climate change will make the problem worse. We helped prepare Mindanao for this future by training more than 80 water resource management professionals and stakeholders to apply and use the HydroRAM model. Their local expertise, combined with our scientific model, will lead to more resilient water decisions in the future. While the study focused only on Mindanao, in the future the hydroeconomic framework can be extended to cover the entire Philippines.