The Rio Chagres watershed provides a large part of the water for the operation of the Panama Canal and for the domestic and industrial use of Panama City. Since water supplies have become scarce during drought years, there is a need to better understand the runoff processes in the watershed under different climatological conditions. Previous analyses of runoff data have resulted in a robust relationship between precipitation and discharge from the watershed. However, there is also evidence of a strong disproportionate increase of runoff during the first storm after the dry season as well as some increase during large storms. We hypothesize that (i) the strong increase of runoff after the dry season is caused by soil water repellency and (ii) the increase of runoff during large storms is caused by positive soil water pressures leading to non-Darcian flow through pipes and macropores. We will present field observations, laboratory measurements, and modeling results to support these hypotheses.