Authors: The University of the Philippiness Los Baños (UPLB) and the Resources, Environment and Economics Center for Studies, Inc, Los Baños.The important role that market-based instruments can play in the management of the Makiling Forest Reserve is recognised by key stakeholders. Consultation meetings attested to the positive attitude and wide acceptance of the rationale of using of MBIs in resource management. Essentially, MBIs would keep the use of resources at sustainable levels, while at the same time generating revenue from resource use that could be used to finance reserve maintenance and conservation activities. Considered in this study are water, forest, land and recreational resources. Investigative surveys of stakeholders in the Makiling Forest Reserve yielded the following results:

• Willingness to Pay (WTP) analysis showed that the cost of watershed conservation was negligible when applied to a cost per cubic meter of water consumed.
• In Tourism, WTP showed that current entry and user fees were severely un-economic and should - and could - be increased considerably, by as much as 100%.
• WTP showed that farmers were ready to contribute through rent payments to conservation.
• Surveys of Net Annual Value of non-timber forest products showed that there was significant annual loss due to the absence of a true market in such products at their point of source. The basic solution was to apply cost recovery pricing principles.