Economic Impacts of Sanitation in The Philippines Summary: A five-country study conducted in Cambodia, Indonesia, Lao PDR, The Philippines and Vietnam under the Economics of Sanitation Initiatives (ESI)

About 20 million Filipinos, or more than a quarter of the Philippine population,

were exposed to poor sanitation in 2004. Moreover, with an average population

growth of more than 2% per annum, an additional 2 million people will require

adequate and clean sanitation facilities each year. These facts raise serious

concerns because poor sanitation has a wide variety of negative impacts.


Sanitation is often a neglected aspect of development in developing

countries. This in part explains the lack of reliable data and research to

verify the significant burden imposed by poor sanitation on society. This

study attempts to address these shortcomings by conducting a quantitative

and qualitative assessment of the impacts of poor sanitation on health,

water, other welfare indicators, and tourism.


The analysis interpreted sanitation as activities that are related to human

excreta. However, there were instances in which sanitation as it relates

to gray water and solid waste were also included. The study relied on

evidence from secondary sources and was hence limited in the scope

of impacts examined.


Overall, the study estimates that poor sanitation leads to economic costs in the

order of US$1.4 billion or PhP 77.8 billion per year. This is equivalent to about

1.5% of GDP in 2005 and translates into per capita losses of US$16.8 or PhP

923.7 per year.


The health impacts represent the largest source of quantified economic costs.

Estimated to be about US$1 billion, this item explains about 71% of the total.

Poor sanitation also contributes to the pollution of water resources. The study

found that this aspect accounted for about 23% of the total economic costs or

US$323 million. Other welfare impacts and the impacts of poor sanitation on

tourism were also estimated to exceed US$77 million per year.

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Having estimated the impacts, the study also evaluated the benefits

associated with improved sanitation and hygiene practices. The results

showed that improved hygiene practices•'3fe.g., hand washing•'3fcan

reduce health costs by approximately US$455 million. Improved

physical access to sanitary toilets can reduce economic costs associated

with user preferences by about US$38 million, whereas improved

toilet systems can reduce health costs by US$324 million. Improvement

in the treatment or disposal of waste has a large impact on water

resources and can reduce costs by US$364 million.


The findings of this study indicate that poor sanitation has significant

economic costs. It also showed that improvements in the sanitation

sector will not only result in economic savings but will also lead to

gains that go beyond the simple mitigation of the costs, such as the

value of human excreta used for fertilizer.


This is the first regional study to compile economic evidence on a

range of impacts of poor sanitation. The results are a wake-up call to

the Philippine government and the development community. Poor

sanitation affects everyone, especially the poor and vulnerable (children,

women, disabled, and senior people). The considerable importance

of sanitation shown in this study and the key links improved sanitation

has with other development goals (poverty and hunger reduction,

gender equality, child health, access to safe drinking water, and quality

of life of slum dwellers) demonstrate that it should receive far greater

attention from players whose interest is the equitable socioeconomic

development of the Philippines. Decisionmakers should act now and

in a concerted way to increase access to improved sanitation and

hygiene practices.

Daftar Isi:


Executive Summary

1.       Introduction

2.       Methods

2.1    Study Approach

2.2    Scope of  ’Sanitation’

2.3    Impacts Evaluated

2.4    Impact Mitigation

3.       Results

3.1    Summary of Economic Impacts of Poor Sanitation

3.2    Health Impacts

3.3    Water Resource Impacts

3.4    Other Welfare Impacts

3.5    Tourism Impact

3.6    Economic Gains from Improved Sanitation and Hygiene

3.7    Omitted Impacts

4.       Recommendations