Agricultural terraces are the most evident landscape imprints of traditional knowledge on soil conservation and water management globally. This article focuses on the Ifugao Rice Terraces (IRT) of the Philippines, a sustainable agroecosystem built on the harmonious relationship between indigenous people and their local environment. We elucidate how the rice terraces influence the hydrologic response at a small catchment scale through detailed field monitoring and physically based mathematical modeling. We also explore the consequences of socioeconomic pressures manifested through land-use change. Our results quantitatively reaffirm the effectiveness of well-maintained agricultural terraces in regulating water resources by enhancing groundwater recharge. Meanwhile land-cover change induced by terrace abandonment was shown to lead to an overall decrease in water resource availability.