The people of Talim Island are experiencing dispossession of its natural resources – the lake and its hills. This affects the way of life of the residents, thereby, affecting rural development in the area. This study provides an account of how Laguna Lake affects its development related to the degradation of environmental commons due to urbanization. This study discusses the competing forces between the typical ‘village culture’ in the island as against the arrival of ‘urbanized culture’ in the area. The study attempts to illustrate the economic life on the island and raise critical issues as it addresses the question ‘how do we describe Talim Island in reference to critical issues and perspectives of Philippine rural development’. Talim is a model wherein the geographic location along with the population is highly dependent on the natural environment, thus, whatever happens to the natural elements like water and land would significantly alter the social and economic conditions. To provide a narrative of the socio-cultural dimensions of the island, this research implores an ethnographic field study about the lives of the people in the context of how it is affected by the ongoing social and economic progress.