The quantitative prediction of environmental impacts of land-use changes in watersheds could serve as a basis for developing sound watershed management schemes, especially for Philippine watersheds with agroforestry systems. This study was conducted to determine the effects of various land-use patterns on runoff, and sediment yield in selected sub-watersheds of the Manupali River using the ArcSWAT model. ArcSWAT is a river basin scale model developed to quantify the impact of land management practices on water, sediment, and agricultural chemical yields in large, complex watersheds with varying soils, land use, and management conditions over long periods of time. In this study, the model was parameterized and calibrated in selected Manupali River sub-watersheds with an aggregate area of 2,177 ha to simulate the hydrologic effects of land use. Initial simulation results showed that conversion of forest to agricultural lands causes serious erosion and sediment yield in the area. Agricultural lands planted with corn, potato, and tomato, which make up 22.38 percent of the sub-watershed area, resulted in an average annual sediment yield of 110.1 t/ha, with the areas planted with potato producing the largest sediment yield of 205 t/ha. Forest and pasture and/or grassland produced a sediment yield of 0.7 t/ha and 2.15 t/ha, respectively. On average, simulation results showed an annual sediment yield of 12.86 t/ha for the whole area. It is evident from these initial results that conversion of forest to agricultural lands coupled with poor agricultural management practices could lead to serious erosion problems. Further simulation work will be done to generate results that could serve as sound basis for policy formulation geared toward sustainable watershed and agroforestry management.