Similar to other developing countries, diarrhea in the Philippines continues to be among the top causes of child mortality and morbidity. In pursuit of its Millennium Development Goals, the Philippine government commits to reduce child deaths and provide water and sanitation services to more rural households by 2015. Applying propensity score matching on the 1993, 1998, 2003, and 2008 rounds of the National Demographic and Health Survey to estimate the average treatment effect on the treated, it is found that the incidence of diarrhea among under-5 children is lower by as much as 4.5% in households with access to piped water and 10% in those with their own flush toilets, relative to comparable households. These findings underscore the need to ensure the quality of drinking water from the pipe or from other improved sources at the point of use, and the provision of improved and own sanitation facilities.