50158-001: Supporting Implementation of Environment-Related Sustainable Development Goals in Asia and the PacificTechnical Assistance Consultant’s Report
This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.
Project Number: 50158-001 February 2020 Technical Assistance Number: 9245
Regional: Supporting Implementation of Environment-
Related Sustainable Development Goals in Asia and
the Pacific (Philippine Subproject)
Circular Economy in the Philippines
Prepared by: Patrick Schroeder Asian Development Bank is the executing and implementing agency.
ADB-NEDA Circular Economy Report Philippines (TA9245)
Author: Patrick Schröder (International Expert)
Final Version
An assessment of existing initiatives, policies and identification of potentials to support
the Philippine Action Plan for Sustainable Consumption and Production (PAP4SCP)
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Objective and structure of the Circular Economy in the Philippines report:
This report has the objective to provide recommendations to the Philippines government for
designing and implementing circular economy (CE) policies and initiatives in support of the
Philippine Action Plan for SCP (PAP4SCP) and the Philippines Development Plan (PDP).
The report provides overview of international circular economy developments, including the
conceptual foundations of the CE, current approaches and applications by businesses, international
experiences in CE policy design and implementation, and their relevance to the Philippines
development objectives and SCP Action Plan. The report reviews international and national best
practice examples, how they can be localized and implemented in the Philippines to help accelerate
action on SCP and to implement targets of SDG 12. The report also reviews existing CE related
policies and examples from the Philippines, to identify specific policy interventions that can facilitate
upscaling of best practices and support the transition towards a CE. It provides recommendations
how the promotion of CE practices across sectors can be achieved and which stakeholders need to
be involved. Institutional arrangements and policies involving economic planning, target setting for
economic sectors, urban planning and other mechanisms, through the use of identified tools, can
promote an integrated approach towards a more circular economy.
The methods for this study include an in-depth literature review of key documents, international
circular economy reports and grey literature, and semi-structured interviews with key stakeholders
from the Philippines from government, business, NGOs and academia which were conducted in
Manila in January 2019.
Acknowledgements
I would like to thank the ADB project team, especially Emma Marsden, Tanya Concepcion and Dianne April Delfino, the NEDA team, especially Undersecretary Rosemary G. Edillon, Jane DeLa Rosa, and Joy B. Bongcac. Many thanks also to the other members and consultants of the
SCP Action Plan project team including Lisa Inez Antonio, Amelia Supetran, Augustin Arcenas and
Alan Cuyno for their reviews, comments and support in completing this project and the report.
Disclaimer
This report and the assessment was prepared as part of the development of the Philippine Action
Plan for SCP (PAP4SCP) with inputs from concerned government agencies, particularly the National
and Economic Development Agency (NEDA).
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Long-term recommendations (2025-2030) ........................................................................................ 9
1 Background and Introduction to the circular economy (CE) .................................................. 10
1.1 Circular Economy (CE): conceptual foundations, definitions and approaches ..................... 10
1.1.1 Circular economy (CE) and sustainable consumption and production (SCP) ............... 12
1.1.2 Circular economy (CE) indicators and assessment criteria ........................................... 13
1.2 Circular economy (CE), Sustainable Consumption and Production (SCP) and the Sustainable
Development Goals (SDGs) ............................................................................................................... 16
2 International examples of circular economy (CE) policy frameworks .................................... 21
2.1 The European Union (EU) ..................................................................................................... 21
2.2 Japan ..................................................................................................................................... 22
2.3 China ..................................................................................................................................... 22
2.4 Other Asian countries (South Korea, Singapore, Malaysia, Indonesia) ................................ 23
2.5 The circular economy (CE) opportunities for low and middle income countries ................. 24
2.6 Employment opportunities in the circular economy (CE) ..................................................... 27
2.7 Financing the transition to a circular economy .................................................................... 28
3 Aligning circular economy (CE) strategies and needs for sustainable development pathways
for the Philippines ...................................................................................................................... 28
3.1 Sustainable development priorities of the Philippines ......................................................... 28
3.2 Philippines development priorities and needs which require CE practices to be addressed
29
3.3 Material composition and footprints of the Philippine economy ........................................ 30
3.4 Current circular economy related policies and frameworks in the Philippines .................... 32
3.4.1 Solid waste management policies ................................................................................. 32
3.4.2 Sustainable public procurement (SPP) to stimulate circular economy (CE) ................. 33
3.4.3 Housing and construction policies for climate resilient housing in informal settlements
33
3.4.5 Green job creation policies ........................................................................................... 34
3.4.6 The role of national standards for circular economy .................................................... 35
3.5 Key stakeholders and their initiatives relating to CE ............................................................ 35
3.5.1 National government agencies ..................................................................................... 35
4
3.5.3 Private sector industry and business approaches......................................................... 37
3.5.4 Civil society initiatives ................................................................................................... 39
3.5.5 Academic research and science approaches ................................................................ 40
3.5.6 International organisations and development cooperation programmes ................... 40
UNIDO ........................................................................................................................................... 40
Global Green Growth Institute ..................................................................................................... 41
EU SWITCH-Asia ............................................................................................................................ 41
4 Outlook and potentials of CE in the Philippines in socio-economic priority sectors ............... 42
4.1 Municipal waste and plastics recycling - upgrading and formalising plastic collection
systems, improving junk shops and modernising recycling facilities ............................................... 42
4.2 Organic and food waste/biological fraction of MSW and biogas generation ....................... 43
4.3 Circular economy (CE) in agriculture and food systems – agroecology, food processing
MSMEs, agricultural residues for energy and precision agriculture ................................................. 45
4.3.1 Agroecology and regenerative farming practices ......................................................... 45
4.3.2 Energy from sugarcane residues and other bioenergy options .................................... 46
4.4 Energy and appliances sector - recovery and recycling of Waste Electrical and Electronic
Equipment (WEEE), future solar PV waste in rural areas ................................................................. 47
4.4.1 Electrical equipment, second-hand appliances and Waste Electrical and Electronic
Equipment WEEE (e-waste) .......................................................................................................... 47
4.4.2 Recovery and recycling of energy storage batteries of off-grid PV programmes ......... 47
4.5 Buildings, infrastructure and construction - reuse and recycling of construction and
demolition waste, circular building solutions low-cost housing and improving informal settlements
48
4.6 Circular smart cities and urban mobility - car sharing, bike sharing, walkable cities concepts
49
4.7 Circularity in the textile industry of the Philippines ............................................................. 50
4.8 Circular Economy (CE) in Philippine manufacturing sector and circular supply chain
management ..................................................................................................................................... 50
4.9 SWOT Analysis for circular economy in the Philippines ....................................................... 51
5 Summary and conclusions ................................................................................................... 52
5.1 Defining the degree of circularity of the Philippine economy .............................................. 52
5.2 Summary of CE potentials and opportunities ....................................................................... 54
6 Recommendations for integration of CE into SCP Action Plan and PDP) ................................ 55
6.1 Recommendations for immediate action ............................................................................. 55
6.2 Medium term recommendations (2020-2025) ..................................................................... 56
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References ................................................................................................................................. 59
CE – Circular economy
DHSUD – Department of Human Settlements and Urban Development
DILG – Department of Interior and Local Government
DMB – Department of Budget and Management
DMC – Domestic material consumption
DOE – Department of Energy
EPR – Extended producer responsibility
GIZ – Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH
GPP – Green Public Procurement
GRI – Global Reporting Initiative
EIB – European Investment Bank
MSW – Municipal solid waste
ILO – International Labour Organisation
IoT – Internet of Things
PEZA – Philippine Economic Zone Authority
PRO – Producer Responsibility Organization
PSA – Philippines Statistics Authority
SDGs – Sustainable Development Goals
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Summary
This introduction section includes a summary of the main findings and key messages of the CE report.
SDG 12 on Sustainable Consumption and Production (SCP) has been identified as one of the most
interconnected goals among the SDGs. The attainment of SDG 12 is of strategic importance and can
create synergies in relation to other goals including SDGs 4, 6, 7, 8, 9, 11 and the environmental
targets 13, 14, 15. The circular economy is integral part of SCP, several targets of the SDG 12 are
directly related to the CE.
Currently, no integrated CE strategy or policy framework exists in the Philippines. Nevertheless, a
number of national policies and initiatives link directly and indirectly to circular economy approaches
in a number of different industry sectors, including food processing, building and construction.
An increased focus on circular economy and SCP as a strategy towards sustainable development
would be aligned with the Philippine Development Plan (PDP) 2017-2022, which sets overall PDP
goal of laying a strong foundation for inclusive growth, a high-trust society, and a globally
competitive knowledge economy (NEDA, 2017). Circular economy can help achieve the Strategy
Framework to Ensure Ecological Integrity, Clean and Healthy Environment. The following goals
relating to the economy and environment:
Address climate change and human-induced risks to the environment through mechanisms
to mitigate their impact on communities, tangible heritage, and biodiversity
Increased access to economic opportunities for micro, small, and medium enterprises
(MSMEs)
consumption and production
Address the countries’ municipal waste management and water pollution crisis
Support protection of ecosystems, biodiversity and improve the country’s overall environmental quality
The circular economy also offers opportunities to improve living conditions of the 21.6 percent of
Filipino people living under the below the national poverty line (ABD, 2019), through
implementation of CE solutions to mismanaged waste and open burning, improved water and
sanitation, building solutions for low-cost construction in informal settlements, and new income
generating activities in regenerative agriculture, food processing and biogas generation to support
rural livelihoods. There is much untapped potential to increase the circularity of major material
categories. Waste management and increasing the recovery rates of materials like plastic need to
become a priority area for the CE in the Philippines. This can contribute to increasing circularity,
reducing environmental impacts and contributing to human development objectives.
In addition to national policy frameworks, there are many small-scale, unconnected CE initiatives are
taking place in the economy and society. Despite these multiple initiatives, the overall degree of
circularity of the Philippine economy is still low – as in most other countries. Although specific data
were not available to conduct a quantitative analysis, it is estimated that the degree of circularity is
below the global average of 8.6 percent (Circle Economy, 2020). This is due to the large primary
resource extraction sector, stock-build up through fast growing construction in Philippine cities and
infrastructure development, and weak waste management capacity for municipal solid waste.
Significant amounts of materials and resources are either accumulated as stock in buildings (which
can be re-used in the future) or leak into the environment, especially plastic waste. Despite the low
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circularity and a growing biocapacity deficit (Global Footprint Network, 2013), the Philippines
environmental footprint is still relatively low compared to other middle income countries.
Application of CE practices as part of the implementation of the SCP Action Plan will be a necessary
approach to keep environmental footprints small while addressing the SDGs and achieving human
development objectives.
The report provides a number of recommendations on how the CE can be included in the SCP Action
Plan of the Philippines. It also provides other policy recommendations what can be used to stimulate
the development of a circular economy that contributes to the PDP. The recommendations are
clustered according to short-term (immediate) actions, medium (5 years, 2020-2025) and long-term
(10 years from now, period 2025-2030).
Recommendations for immediate action
Updating and implementing the Ecological Solid Waste Management Act of 2000 (RA 9003).
Enhancing the scope and scale of waste management and increasing the recycling rate will
require a range of policies, including the RA 9003.
Support Barangays, LGUs and local material recovery facilities (MRF). To solve
mismanagement of waste on local levels and increase the resource recovery rates will
require support from central government to tackle plastic waste leaking into the marine
environment, this is a primary concern that requires CE approaches to be solved.
Design and apply Extended Producer Responsibility (EPR) policies and the Polluter Pays
Principle to tackle issues of single use plastic packaging and plastic waste.
Inclusion and support policies for informal waste sector. The informal sector plays an
important role in the Philippines waste collection, separation and recycling sectors. The
participation of the informal sector and community “zero waste” initiatives are essential. Revise and update existing Green Public Procurement Roadmap and guidelines to include
CE criteria (e.g. recycled content requirements) for sustainable public procurement (SPP) of
goods and services used by public sector institutions.
Promote sustainable lifestyles and diets of urban population through ongoing public
education initiatives. Especially the large Manila metropolitan area needs to become more
circular and consumer behaviour to reduce food waste is a decisive factor.
Use of nudge approaches to encourage government and business to become more circular.
These “soft” nudging policy approaches can include recognizing best practices and business
awards, e.g., of circular LGUs or barangays awards, and circular economy business awards
for sustainability reporting practices.
Upgrading of the current public transport system, and promote vehicle electrification.
Building on Philippines’ Transportation Department's Public Utility Vehicle Modernization Program launched in 2017, CE and remanufacturing in the automotive sector can be further
promoted, including for heavy machinery and other transport equipment.
Medium term recommendations (2020-2025)
Development of an operational CE framework for the Philippines (e.g., based on the OECD
framework and definitions), with CE metrics and indicators, (e.g., based on the EU’s ‘CE monitoring framework’ and the ‘circular material use rate’), needs to be the first step.
Development of specific CE indicators, benchmarking and assessment for the Philippine
context should be undertaken with consideration of institutional nuances. CE indicators
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would essentially build on monitoring the implementation of strategies and the framework
through statistical indicators.
Update of Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990. The
current act regulates materials with hazardous components, but there is no explicit
provision for e-waste.
developments of the Securities and Exchange Commission (SEC) preparing draft guidelines
for mandatory sustainability reporting, specific CE criteria such as waste reduction, use of
recycled content materials and resource efficiency should be included in corporate
sustainability reporting.
Undertake feasibility study and development joint programmes and financial mechanisms
for large-scale anaerobic digestion systems. It is recommended to undertake an in-depth
study to ascertain the suitable feedstock requirements, potential biogas generation rates,
and digestate storage be undertaken prior to its inclusion in the SCP Action Plan.
Create blended finance mechanisms and provide CE credit lines for SMEs. Government and
private investors should develop cooperative and blended finance mechanisms to support
and de-risk early investment in CE value chains.
Long-term recommendations (2025-2030)
(NISUS). CE approaches and innovative building solutions such as modular building design
and 3D printing which save resources should be supported by the NISUS to provide low-cost
and resilient housing solutions.
Make use of the numerous opportunities to include CE practices in the Philippine
agriculture and food processing sectors. Agriculture policymakers should support the
mainstreaming and scaling-up of regenerative agroecology, promote CE practices in food
processing SMEs, apply precision agriculture to reduce pesticide usage and food losses,
support anaerobic digestion and briquette programmes.
Promote use of digital technologies to facilitate efficient use of transport assets and
sustainable consumption. Digital technologies are enablers for the sharing economy and
smart cities. Mobility sharing systems enabled by digital technologies can facilitate more
efficient use of transport assets in large urban centres of Metro Manila.
Initiate new industrial symbiosis programmes as national industrial innovation policy.
Philippine policymakers with remits for business, innovation and economic growth should
develop national and regional programmes for scaling up industrial symbiosis approaches,
building on the experiences on the previous industrial waste exchange programme.
Develop long-term strategies for the country’s mining sector to enable a just and smooth
transition to help the sector adjust to a CE system both on national and international level.
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1 Background and Introduction to the circular economy (CE)
This introductory section provides an overview of the current state of the circular economy including
the concept of circular economy (CE), the current state of academic CE discussions, the link between
the CE and the Sustainbale Development Goals (SDGs), and sustainable consumption and production
(SCP), and CE policies and institutional frameworks in the EU, China and other Asian neighbouring
countries.
1.1 Circular Economy (CE): conceptual foundations, definitions and approaches
The concept of circular economy (CE) focuses on a set of principles that offer an operational vision of
concrete pathways to sustainable production and consumption (SCP) patterns and thus to a
sustainable economy. The CE approach highlights the importance of changing the current linear
model “take – make – waste” into a circular system that is regenerative and restorative by design
(Ellen MacArthur Foundation, 2015).
This can be achieved by redirecting energy and material flows from a linear to a circular direction,
transforming waste into productive inputs, reducing pollution, greenhouse gases and their impacts
on health and environment. This involves systems thinking approaches that include changes in value
systems, ambitious policies to internalise externalized costs and new approaches to production,
distribution, consumption and investment within each sector of the economy (Stahel, 2016).
There is no single definition of the CE, it is a term that means different things to different people.
There are a wide range of CE thought-schools including those who associate the term with cradle-to-
cradle design, industrial ecology, performance economy, regenerative design, and even biomimicry.
Kenneth Boulding’s 1966 paper “The economics of the coming spaceship earth” is often referred to
as the origins of the term. Moving beyond strict adherence to neoclassical economic precepts, CE
has been described as a framework for re-designing the economy by the Ellen MacArthur
Foundation that has been championing the concept globally since 2010 (Ellen MacArthur Foundation,
2015).
The concept of CE focuses on a set of principles that offer an operational vision of concrete paths to
sustainable production and consumption systems, and thus to an economy which operates within
the biophysical boundaries of the planet (Rockström et al., 2009). The CE approach highlights the
importance of changing the current linear model into a system that is regenerative and restorative
by design (Ellen MacArthur Foundation, 2015). This can be achieved by redirecting energy and
material flows from a linear to a circular direction, transforming waste into productive inputs,
reducing pollution, greenhouse gases and their impacts on health and environment. This involves
systems thinking approaches that include changes in value systems, ambitious policies to internalise
externalized costs and new approaches to production, distribution, consumption and investment
within each sector of the economy (Stahel, 2016).
According to the contemporary school of thought, the CE concept is grounded in the study of non-
linear, particularly living systems (Webster, 2016), and refers to an industrial economy that is
restorative by design, and relies on renewable energy; minimises, tracks, and hopefully eliminates
the use of toxic chemicals, and eradicates waste through careful design. Imitating living systems, the
CE approach works to optimize systems rather than components. This is done through attention to
material and energy flows, which can be classified into two kinds: biological nutrients, useful to the
biosphere, and technical nutrients, useful to the so-called ‘technosphere’, i.e., the systems of
industrial production. These definitions of a CE are based on a synthesis of ideas and concepts such
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as ‘cradle to cradle’ (McDonough and Braungart, 2002) and the performance/sharing economy
(Stahel, 2016), and include insights from industrial ecology.
In a nutshell, the CE is a systemic approach to economic development designed to benefit businesses,
society, and the environment. In contrast to the extractive ‘take-make-dispose’ linear economy, a
circular economy aims to be restorative and regenerative by design. Furthermore, it aims to
decouple growth from the consumption of finite resources. It is based on three principles: Design
out waste and pollution, keep products and materials in use, and regenerate natural systems. The
Ellen MacArthur Foundation’s ‘butterfly diagram’ has emerged as the most commonly used representation of the circular economy (see Figure 1).
Figure 1: The circular economy ‘butterfly diagram’ (source: Ellen MacArthur Foundation, 2012)
As argued by the Ellen MacArthur Foundation (2015), “In a circular economy, improving the value captured from existing products and materials, not just increasing their flow, would increasingly
drive economic growth”. This is to be achieved by:
Preserving and enhancing natural capital by controlling finite stocks, and balancing
renewable resource flows;
Optimising resource yields by circulating products, components, and materials at the highest
utility;
Fostering system effectiveness by revealing and designing out negative externalities.
Despite the different views and definitions, there at least three commonly recognised features of the
CE - slowing, closing and narrowing resource loops. The definitions and the related CE features and
key effects have been summarised in Figure 2 (McCarthy, Dellink and Bibas, 2018). Although each
12
definition involves different processes and actors, they share a similar outcome: increased resource
efficiency, and aim the decoupling of natural resource extraction and use from economic output.
Figure 2: Definitions, features and key effects of the circular economy (source: McCarthy, Dellink and Bibas,
2018)
Similarly, the definition by Geissdoerfer et al. (2017), who view the circular economy as a potential
new sustainability paradigm, summarises the main elements of the circular economy as:
“a regenerative system in which resource input and waste, emission, and energy leakage are minimised by slowing, closing, and narrowing material and energy loops. This can be achieved
through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and
recycling.”
For the context of the Philippines SCP Action Plan (PAP4SCP), we propose to apply the
combination of the three definitions, the three CE features and related CE practices
(design, maintenance, repair etc.) as framework to describe and analyse the CE in the
Philippine context. We apply this framework to describe and locate existing policies and
initiatives of the Philippines in relation to the CE and to identify further potentials for
circularity (see chapter 3).
1.1.1 Circular economy (CE) and sustainable consumption and production (SCP)
The concepts and approaches of sustainable consumption and production (SCP) and circular
economy (CE) overlap, and there are many synergies between the two, especially relating to
sustainable consumption and lifestyles, circular business models, sharing economy, collaborative
consumption and waste management. The agendas of SCP and CE are closely intertwined in practice
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and conceptually. Both concepts are based on life cycle thinking, aimed at systemic changes in the
current linear production and consumption patterns. Most initiatives on local or national level are a
combination of both SCP and CE approaches.
One important difference is that the CE has more of a focus on technology and business solutions to
achieve circularity of materials and resources, whereas SCP tends to focus more on issues of social
norms, culture and affluence, aiming to change consumption patterns including both the magnitude
of material consumption and shifting of preferences toward green goods and services.
Sustainable lifestyles, especially of urban consumers, are important in shifting to both a CE and SCP.
Sharing models that provide access to services instead of products, such as mobility instead of car
ownership, require shifts in consumption behaviour. A key approach here is collaborative
consumption1 which also offers new business models. Many of these approaches are emerging,
including in Asian countries. For example, research by Retamal (2019) has analysed established and
relatively new shared-access and service businesses in Manila and other Asian cities, including in key
sectors such as transport, housing, recreation, laundering and clothing.
1.1.2 Circular economy (CE) indicators and assessment criteria
Monitoring progress towards a circular economy (CE) is a new and challenging task for companies
and governments alike, but it is key to understand where potentials lie, and how to measure
progress towards circularity of the economy. In a CE, materials embedded in products and
components are reused, repaired or recycled when they reach their end-of-life, and are then
injected back into the economy as second hand products, or secondary raw materials. This reduces
not only the environmental footprint of production and consumption, but also increases the security
of supply of raw materials for national economies.
On a micro-level, indicators and criteria to estimate how effective a product or company is in making
the transition from a linear to a circular mode of operation, and practical tools supporting such
measurement, are still being developed. For example, the Circularity Indicators Project by the Ellen
MacArthur Foundation2 has developed indicators at product and company level, and a tool at
product level. It looks specifically at material flows taken into account to arrive at the Material
Circularity Indicator (MCI) of a product. The indicators focus exclusively on technical cycles and
materials from non-renewable sources (the right side of the CE butterfly diagram), as their circularity
strategies and associated business benefits are better understood. The indicators enable companies
to assess how well their products or the company as a whole performs in the context of a CE.
There are significant potentials across many economic sectors to increase circularity. According to
the 2020 Circularity Gap Report (Circle Economy, 2020), which applies a Global Circularity Metric,
the total amount of resources entering the global economy accounted for more than 100.6 billion
tonnes in 2017. These annual material inputs into our global economy are composed of extracted
resources, complemented by cycled resources. In 2017, 8.65 billion tonnes of cycled resources were
reused by the global economy which brought the total for extracted material inputs up to 84.4
billion tonnes. Applying the definition to these numbers results in a global circularity metric of only
8.6% for 2017.
Relevant for governments are Indicators for measure progress towards a more circular economy on
a national or regional level. A ‘CE monitoring framework’ has recently been developed by the
European Union (EC, 2018). A total of 10 indicators in four categories (production and consumption,
waste management, secondary raw materials, competitiveness and innovation) were selected for
the EU context to capture the main elements of a CE (see Table 1).
In relation to the CE monitoring framework, as there was no single summary indicator for the
circularity of our economies at macroeconomic level, Eurostat (2019) developed a new indicator for
the EU monitoring framework for the circular economy. This new indicator is called the 'circular
material use rate' —referred to as the circularity rate — and it measures the contribution of recycled
materials towards the overall use of materials. The EU’s circularity rate is much lower than other
indicators of circularity, such as recycling rates, because the circularity rate has a much wider
material scope: it takes account of all the materials that are fed into economy, whereas the recycling
rates only take account of waste. The EU’s circularity rate in 2016 was, on average, only 12 %. This is the share of material resources used in the EU which came from recycled products and recovered
materials. The 12 % circularity rate in 2016 is an improvement from around 8 % in 2004. However,
progress is slow: it would take the EU a century to reach a circularity rate of 40 % with the current
trend. There are big differences in the circularity rates across countries: they ranged from 1.3 % in
Greece to 29 % in the Netherlands in 2016 (Eurostat, 2019).
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Table 1: EU Monitoring Framework for CE (EC, 2018)
Many of the indicators in this ‘CE monitoring framework’ are not new or unique to the CE. Eight indicators are present in other European frameworks, including the Waste Framework Directive, the
Resource Efficiency Scoreboard and Raw Materials Scoreboard. The other indicators ‘Food Waste’
16
and ‘Green Public Procurement’ (GPP) are still under development. It is important to note that the
indicators from the ‘CE monitoring framework’ focus mainly on measuring material and waste production and strategies to preserve materials (Moraga et al. 2019), which shows that material
resources and waste are considered the primary focus of the European policy on CE. Several of the
CE indicators are also in the scope of the Sustainable Development Goals (SDG) for SDG 12
Responsible Consumption and Production.
We propose to use selected indicators from the EU’s ‘CE monitoring framework’, and
adapt the framework to assess the current state of circularity in the Philippines based on
the 'circular material use rate', and to track progress towards more circularity in the
future. There are overlaps with SCP indicators for the SDG 12 and other SDGs, which
means that measuring the CE is synergistic to measuring progress of the PAP4SCP, and will
provide information and data relevant to SDG implementation reporting.
1.2 Circular economy (CE), Sustainable Consumption and Production (SCP) and the
Sustainable Development Goals (SDGs)
This section summarises the link between circular economy (CE), sustainable consumption and
production (SCP) and the Sustainable Development Goals (SDGs) and highlights which CE approaches
can be applied to address specific SDG targets. Overall, there is much scope for aligning CE strategies
with sustainable development commitments at the national and international level.
SDG 12 on Responsible Consumption and Production has been identified as one of the most
interconnected among the goals. It is directly linked to SGD 8 through the target relating to the 10
YFP on SCP, but also to SDGs 4, 6, 7, 9, 11, and the environmental targets 13, 14, 153 (Bengtsson,
Alfredsson, Cohen et al. 2018). Thus, the attainment of SDG 12 is of strategic importance and can
create synergies in relation to other goals.
The circular economy is an integral aspect of SCP 12. According to the UN (2018) the CE holds
promise for achieving multiple SDGs, including SDGs 6 on water, 8 on economic growth, 11 on
sustainable cities, 13 on climate change, 14 on oceans, and 15 on life on land. For example,
regarding the environmental targets, the CE has significant potentials to address climate change by
reducing up to 3.6 billion tonnes of global CO2 emissions per year (Enkvist and Klevnas , 2018). The
CE is recommended by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem
Services (IPBES, 2019) as a way to achieve sustainable consumption and production, and improve
sustainability of economic and financial systems. Its application is considered as crucial in efforts to
address current challenges to the global environment, such as marine plastic pollution (Mendenhall,
2018).
The study by Schroeder, Anggraeni and Weber (2018) analysed a wide range of circular economy
practices and their potential application to achieve specific SDG targets. Whilst the CE will not be
able to address and solve all of the SDG related challenges, the overall findings of the analysis show
that CE practices can directly contribute to achieving 21 of the SDG targets and indirectly contribute
to achieving an additional 28 targets (see Figure 3).
3 SDGs 4 (Quality Education), SDG 6 (Clean Water and Sanitation), SDG 7 (Affordable and Clean Energy), SGD 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), SDG 11 (Sustainable Cities and Communities), SDG 13 (Climate Action), SDG 14 (Life Below Water), and SDG 15 (Life on Land)
17
Figure 3: Direct and indirect contributions of the circular economy to the 169 SDG targets (source: Schroeder,
Anggraeni and Weber, 2018)
The strongest relationships and synergies between CE practices and SDG targets lie within SDG 6
(Clean Water and Sanitation), SDG 7 (Affordable and Clean Energy), SDG 8 (Decent Work and
Economic Growth), SDG 12 (Responsible Consumption and Production), and SDG 15 (Life on Land)
having high scores both for direct and indirect contributions. SDG 1 (No Poverty) and SDG 2 (Zero
Hunger) and SDG 14 (Life Below Water) are impacted by CE practices mostly indirectly. Furthermore,
the CE is important to achieve other SDGs (Schroeder, Anggraeni and Weber, 2018). CE approaches
applied in various industry sectors including agriculture, manufacturing, water and sanitation, energy
and transport would contribute to many of the SDGs, including those on water, energy, economic
growth, climate change, life below water and life on land (SDGs 6, 7, 8, 13, 14 and 15) (see Figure 4).
18
Figure 4: Circular economy practices for the SDGs (source: Schroeder, Anggraeni and Weber, 2018)
CE practices can help to address targets of SDG 12 Responsible Consumption and Production. In
particular, SDG target 12.2 focuses on the sustainable use of natural resources. SDG target 12.5 for
waste reduction is also relevant in this context. Implementing circular economy practices such as 3Rs
(reduce, reuse, recycle) can achieve smaller material throughput, and will also contribute to reduced
waste and emissions. In the following Table 2 the specific SDG 12 targets, indicators and related CE
approaches and practices are presented, in view of the potential applications for the Philippines
context and to show the relevance for the SCP Action Plan (PAP4SCP).
Table 2: Link between SDG 12 Targets on Sustainable Consumption and Production and Circular Economy
Approaches
SDG 12 Targets Indicators Circular economy approaches 12.1 Implement the 10 YFP on SCP, all countries taking action, with developed countries taking the lead, taking into account the development and capabilities of developing countries
12.1.1 Number of countries with SCP national action plans or mainstreamed as a priority or a target into national policies
National SCP action plans can include specific references to circular economy approaches linked to 10 YFP programmatic areas;
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12.2 By 2030, achieve the sustainable management and efficient use of natural resources
12.2.1 Material footprint, material footprint per capita, and material footprint per GDP 12.2.2 Domestic material consumption, domestic material consumption per capita, and domestic material consumption per GDP
Circular economy practices to slow the growth of domestic material consumption and improve material efficiency in primary and secondary processing of resources; Substitution of non-renewable with renewable (indigenous) resources for small scale industries, such as natural fibers to replace synthetic fibers, (specific opportunities in the Philippines could be abaca fiber for the upholstery industry (in lieu of synthetic fiber), bamboo for flooring tiles and panelling
12.3 By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post- harvest losses
12.3.1 Global food loss index
Reduced food waste and losses through behavioural changes; soil restoration of land through food waste utilisation for organic fertilisers; improving of agricultural supply chains to reduce food losses
12.4 By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle, in accordance with agreed international frameworks, and significantly reduce their release to air, water and soil in order to minimize their adverse impacts on human health and the environment
12.4.1 Number of parties to international multilateral environmental agreements on hazardous waste, and other chemicals that meet their commitments and obligations in transmitting information as required by each relevant agreement 12.4.2 Hazardous waste generated per capita and proportion of hazardous waste treated, by type of treatment
CE approaches such as industrial symbiosis to reduce industrial and hazardous waste; Industrial wastewater treatment to recover chemicals from wastewater, grey water recycling; Agro-ecology to reduce waste and careful management of agro- chemicals in food production; Formalise and upgrade e-waste recycling facilities to deal with old electronics and appliances
12.5 By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse
12.5.1 National recycling rate, tons of material recycled
Enhanced recycling of paper, plastic and other secondary resources to reduce waste; Product design for reuse and repair; Wastewater treatment and grey water re-use and recycling; Support community based recycling initiatives in cities, towns and informal settlements; Integration of the informal recycling sector in the national waste management programs
12.6 Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate
12.6.1 Number of companies publishing sustainability reports
Circular economy practices in manufacturing and supply chains, reported by companies through their sustainability reports
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sustainability information into their reporting cycle 12.7 Promote public procurement practices that are sustainable, in accordance with national policies and priorities
12.7.1 Number of countries implementing SPP policies and action plans
Certification schemes for use of secondary raw materials (e.g. recycled plastic contents) in government SPP policies and related initiatives and practices;
12.8 By 2030, ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature
12.8.1 Extent to which (i) global citizenship education and (ii) education for sustainable development (including climate change education) are mainstreamed in (a) national education policies; (b) curricula; (c) teacher education; and (d) student assessment
Information campaigns and environmental education about circular lifestyles, especially waste prevention and plastic use reduction; life-cycle assessments (LCA) of goods and services in tertiary education
12.A Support developing countries to strengthen their scientific and technological capacity to move towards more sustainable patterns of consumption and production
12.A.1 Amount of support to developing countries on research and development for sustainable consumption and production and environmentally sound technologies
Improved technological capabilities to implement circular economy approaches in industrial development through Life Cycle Assessments (LCA), and municipal waste management, and transfer of technologies with improved materials efficiency
12.B Develop and implement tools to monitor sustainable development impacts for sustainable tourism that creates jobs and promotes local culture and products
12.B.1 Number of sustainable tourism strategies or policies and implemented action plans with agreed monitoring and evaluation tools
Nature-based solutions using natural resources and circular design approaches in tourism destinations as part of tourism strategies; tools to monitor the impact of tourism on natural resources and ecosystems (e.g. coral reefs) and tourism-related local jobs and employment
12.C Rationalise inefficient fossil-fuel subsidies that encourage wasteful consumption by removing market distortions, in accordance with national circumstances, including by restructuring taxation and phasing out those harmful subsidies, where they exist, to reflect their environmental impacts, taking fully into account the specific needs and conditions of developing countries and minimising the possible adverse impacts on their development in a manner that protects the poor and the affected communities
12.C.1 Amount of fossil-fuel subsidies per unit of GDP (production and consumption) and as a proportion of total national expenditure on fossil fuels
Linked to subsidies for bioenergy, potentials for promotion of anaerobic digestion and bioenergy from agricultural waste; reducing reliance on imported fossil fuels
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2 International examples of circular economy (CE) policy frameworks
Most circular economy (CE) research to date has focused on European countries, China and Japan. In
particular, macroeconomic country models which estimate the economic benefits and potentials for
national economies are unequally distributed. In the ASEAN region, so far only one macroeconomic
model has been conducted, focusing on the country of Indonesia (see Figure 5).
Figure 5: Number of macroeconomic models on circular economy per country (Source: Preston, Lehne and
Wellesley, 2019, based on data from McCarthy et al. 2018)
2.1 The European Union (EU)
The European Commission (EC) initiated a Circular Economy Action Plan in 2015 which consisted of
the 54 actions which were delivered in March 2019, even if the work on some of them continues
beyond 2019 (EC, 2019). The action plan included measures that aim to stimulate Europe's transition
towards a CE, boost global competitiveness, foster sustainable economic growth and generate new
jobs. The EU Action Plan for the Circular Economy also established a concrete programme of action,
with measures covering the whole life cycle: from production and consumption to waste
management, and the market for secondary raw materials, and a revised legislative proposal on
waste.
The EU Action Plan for the Circular Economy emphasises that the maintenance of value of products,
materials and resources in the economy for as long as possible is “an essential contribution to the EU's efforts to develop a sustainable, low carbon, resource efficient and competitive economy” (EC, 2019). Thus, the CE is usually understood in terms of enhancing resource productivity, i.e., the
economic value created per unit of resource use, and decoupling economic growth from resource
use and environmental impacts.
In 2018 the EU Strategy for Plastic in the Circular Economy was launched. It has the goal to create a
‘smart, innovative and sustainable plastics industry’ (EC, 2018) that aims to ensure that all plastic
packagings that are produced and used is recyclable by 2030. The plastics strategy also
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encourages voluntary action by stakeholders to boost the uptake of recycled plastics. The objective
is to ensure that by 2025, ten million tonnes of recycled plastics find their way into new products on
the EU market.
In December 2019, the incoming European Commission announced a European Green Deal,
including the commitment to net zero carbon for 2050. The CE is expected to be a key approach in
the European Green Deal, which will include new waste and recycling laws, and represent about 50
percent of the EU’s effort to achieve net-zero carbon emissions by 2050, and will be erected as “the number one priority” (Simon, 2019).
2.2 Japan
Japan has a range of policies and laws aimed at reducing waste and increasing circularity. Japan has
been promoting a CE since 1991 with the Law for Promotion of Effective Utilization of Recyclables. In
2000, Japan passed the Basic Law for Establishing a Sound Material Cycle Society.
At a national level, Japan’s policy approach to the CE includes a set of indicators to measure progress
towards more circularity of the economy:
A resource productivity indicator measuring material use as a proportion of GDP;
An indicator for cyclical use rate of materials in the economy, measured by the material
reused as a proportion of total material used by the economy; and
An output indicator, measuring how much waste is ultimately landfilled.
These indicators have associated targets. Japan supplements these with a host of sector-specific
measurements, for which there are sometimes industry-specific targets. Finally, it also measures
indicators of societal efforts toward a circular economy, looking at the size of the market for rental
and leasing of goods, the amount of reusable packaging sold, the number of local authorities that
charge for residual waste collection (Benton and Hazell, 2015).
2.3 China
Another major player in the CE is China, which has been implementing a Circular Economy
Promotion Law since 2008. It has been estimated that advancing and adopting the circular economy
as main development pathways could save Chinese businesses and households approximately CNY
32 trillion (USD 5.1 trillion) in 2030, and CNY 70 trillion (USD 11.2 trillion) in 2040 in spending on
high-quality products and services. These savings would be equivalent to around 14% and 16% of
China’s projected GDP in 2030 and 2040 respectively (Ellen MacArthur Foundation, 2018). In terms of living standards, this CE pathway could enable more Chinese urban dwellers to enjoy a middle-
class lifestyle while at the same time reduce the environmental impacts of current urban consumer
lifestyles.
China’s CE approach has focused on eco-industrial development and promotes approaches such as
industrial symbiosis, a CE approach for green industry by which increased sustainability (e.g., lower
carbon emissions, lower resource consumption) can be achieved through the establishment of
symbiosis networks between different industrial facilities, which results in more efficient material
and energy use. Industrial symbiosis networks are generally formed through a long process of
planning wherein potential synergies between different plants are identified and evaluated (Bacudio
et al., 2016)
Other Asian countries, including neighbours and trading partners of the Philippines, also have passed
policy frameworks supporting CE developments. South Korea has initiated a number of policies,
including resource efficiency programmes and recycling technology programmes, in order to change
the linear industrial development model the country has followed over the last decades, but which is
facing difficulties to achieve the country’s environmental objectives (Jin, 2016). Specific examples
are South Korea’s Wastes Control Act (2007) and South Korea’s Law on Recycling Resources (2008).
In 2017, Singapore’s National Environment Agency (NEA) announced its Closing the Waste Loop Initiative, a programme that funds collaborations between industry and research institutes to
develop waste management solutions. In 2018, Singapore’s Ministry of the Environment and Water Resources initiated a new waste infrastructure plan based on the principles of zero waste and circular economy. To this end, the Ministry, in collaboration with NEA, released a “Zero Waste Masterplan”, calling on all sectors and stakeholders to contribute innovative solutions to the plan. One of the drivers for this shift towards CE is that Singapore’s landfill will run out of room by 2035, 10 years earlier than expected, and that there are no plans to replace it. The masterplan phases in new regulations and governing bodies for food, e-waste, and packaging waste over the next five years. Singapore generates 60,000 tonnes of e-waste a year of which currently only 6 percent is recycled. E-waste in Singapore comprise products under 10 years old, many devices often contain gold, silver, rare earths and other valuable recyclable materials. Upgrading Singapore’s ability to capture e-waste through urban mining is the masterplan’s main priority. Starting 2021 producers of e-waste will be responsible for end-of-life collection and treatment as supervised by a Producer Responsibility Organization (PRO). The Extended Producer Responsibility (EPR) system will cover end-of-life information and communications technology equipment, solar photovoltaic panels, batteries and lamps, and certain household appliances (NEA, 2018). In the case of Malaysia, the CE is an important element of Malaysia’s National SCP Blueprint from 2016. Table 3 summarises the key CE features of the SCP Blueprint. Table 3: CE strategies in Malaysia’s SCP Blueprint (Source: Ngan et al., 2019, based on information from
Malaysia’s Economic Planning Unit (EPU)
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The main lessons from these various country experiences for the Philippines are:
1. It is important to have national policy frameworks for a circular economy to address waste
management challenges, and improving resource efficiency of the economy more
generally.
2. All countries serious about improving competitiveness of their industries, reducing
environmental impacts from production and consumption systems is part of the process of
developing or advancing relevant policy frameworks.
2.5 The circular economy (CE) opportunities for low and middle income countries
Most attention has focused on the gains that developed countries and multinational companies can
make from the circular economy by creating value through producing more from less. It is equally if
not more important for small companies in developed countries and people living in poverty to have
the opportunity to create value from the circular economy.
Several research reports have identified the options for adopting the circular economy in low and
middle income countries (e.g. Gower and Schröder, 2016; Williams et al. 2018). The circular
economy offers opportunities to reduce pollution, improve people’s health, create new jobs and provide new business opportunities. Williams et al. (2018) have divided the circular economy
practices frequently used in developing countries into three broad categories: proven, evolving and
speculative. Proven approaches are practices with strong evidence base across different regional and
country contexts (See Table 5 below). The proven approaches have the potential to be implemented
in a way that empowers marginalised and poor communities. Evolving practices are those where the
evidence base is patchier. The speculative category includes practices such as e-waste, an area of
major concern in many developing countries, but so far relying on unsustainable practices with
negative environmental and health outcomes and as-yet-unproven technology.
Circular economy practices in the waste management sector can contribute to reducing the public
health impacts of mismanaged waste. Open burning of waste releases pollutants that increase the
risk of diseases such as heart disease and cancer, respiratory ailments, nausea and headaches, and
damage to the reproductive and nervous systems. Outdoor air pollution is responsible for 3.7 million
deaths a year, and estimates suggest that open burning of waste could be responsible for as much as
a fifth of this death toll (Williams et al., 2019). Waste reduction, improved waste management in
communities affected, better waste separation, collection and recycling systems can contribute to
reducing open burning and improving public health.
CE concepts are also being used in the water and sanitation sector. It includes, for example, the
capture and reuse of slightly used ‘greywater’ for non-potable purposes within cities. In agriculture,
CE water practices include capture and treatment of livestock farm effluent to ensure water quality.
In industry, industrial wastewater can be treated to use sludge to form biogas which, compared to
other methods, offers a significantly smaller carbon footprint (Tahir et al., 2018). In the sanitation
sector, human waste can feed into a circular system which replaces traditional waste management.
This connects the biological cycle, recovering nutrients and water, creating value-adding products
such as biogas, organic fertilisers, proteins and more, and catering for multiple forms of biological
waste. The circular economy approaches to sanitation can have positive impact for the urban poor
by focusing on waste processing at the municipal level (Toilet Board Coalition, 2017).
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Many of these CE approaches to reduce waste and sanitation solutions for communities are
already being practiced in the Philippines, but need to be up-scaled and replicated to achieve
wider environmental, social and economic benefits for the whole society.
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Table 4: Proven and evolving circular economy approaches in developing country contexts (source: Williams
et al. 2018)
2.6 Employment opportunities in the circular economy (CE)
The transition to a circular economy to reduce material extraction and waste generation is expected
to also result in net job gains. According to the ILO (2018), embracing a circular economy that
emphasizes the reuse, recycling, remanufacture and repair of goods will create around 6 million new
employment opportunities across the world as such actions replace the traditional model of “extract, make, use and dispose”. The industries expected to see the highest growth in employment by 2030
are reprocessing of various secondary metals and steel, retail trade and repair sectors. Not all
sectors will be winning, some will see decline in employment such as manufacture of basic iron and
steel, and the mining sector for copper ores and concentrates, and the wood manufacturing sectors
(see Figure 6).
Figure 6: Job gains and job losses in the circular economy by 2030 (ILO, 2018)
Although no detailed figures or specific assessment exists for the Philippines, it can be expected
that this global employment assessment will be applicable for relevant sectors in the country
including the mining sector.
2.7 Financing the transition to a circular economy
Finance and investment is a crucial component to facilitate the transition to a CE. It will require
public sector resource allocations in the form of grants and loans to support research, development,
innovation and public procurement. There is a growing movement showing that private sector
capital is also becoming relevant for CE investment. In response, current emergent innovative
banking and insurance products for circular economy initiatives, such as sharing and leasing business
models, continue to emerge. Banks and the financial industry are encouraged by this green
opportunity.
In 2019, substantial activity in this realm could be observed. Governments have committed to
support circular economy projects. The European Investment Bank (EIB) is offering EUR10 billion
over the next five years. This capital is allocated in the form of loans, equity investments, guarantees
and advisory services as part of ‘The Joint Initiative on Circular Economy’ between EIB and other
European banks. This flagship partnership will target at least EUR10 billion of investments over a five
year period (2019 – 2023). The aim is to prevent and eliminate waste, increase resource efficiency
and foster innovation by promoting circularity in all sectors of the economy (EIB, 2019).
New privately-driven investment funds have emerged. BlackRock, the world’s largest asset manager, launched a Circular Economy Fund of USD20 million seed capital.4 BNP Paribas one of the largest
European banks announced its first Circular Economy Exchange Traded Fund. A group of European
banks ABN AMRO, ING, Rabobank and MVO Nederland, the Dutch association for corporate social
responsibility, are partnering to accelerate the transition to a CE. To promote and provide better
insight into CE funding across the world, the banks launched joint circular economy finance
guidelines in 2018, inspired by the ambition to create a joint framework for financing the CE.5 These
efforts are real, present, and growing.
Greater focus is still needed on circularity in international value chains, and on the governance and
investment frameworks required to enable a global CE. For developed and developing countries
alike, it is necessary to catalyse increased public and private investment in the roll-out and scale-up
of CE solutions.
3 Aligning circular economy (CE) strategies and needs for sustainable
development pathways for the Philippines
3.1 Sustainable development priorities of the Philippines
Is it possible to align the circular economy (CE) with existing sustainable development policy
priorities in the Philippines? Generally speaking, CE approaches are consistent with most sustainable
development objectives, including driving resilient economic growth, and reducing impacts on
environment and resources. If implemented in an inclusive way, CE can provide opportunities for the
most vulnerable people, including workers in the informal waste management sector. In the
following chapter, we aim to identify synergies between the CE and existing national development
plans and policies in the Philippines, and undertake an assessment of the scale of opportunity in
transitioning to a CE across key sectors of the economy.
4 BlackRock website: ]https://www.blackrock.com/ch/individual/en/products/310165/blackrock-circular-economy-fund 5 ABN AMRO website: https://www.abnamro.com/en/newsroom/press-releases/2018/abn-amro-ing-and-rabobank-launch-finance- guidelines-for-circular-economy.html
By promoting innovation, resource efficiency and new business models, the CE can support the
Philippine economy which is poised to grow at 6.4 percent in 2019, and 6.5 percent in 2020 and
2021, according to the Philippines Economic Update (World Bank, 2019). In addition to supporting
economic development, the CE concept and approach can be contextualized in the Philippines to
address some of the country’s most pressing development needs.
The PDP 2017-2022 and the Ambisyon Natin 2040, with the 2030 Agenda and the principle of
“leaving no one behind” involves three key pillars namely, 1. People: the most marginalized,
vulnerable, and at risk; 2. Planet and Prosperity: urbanization, economic growth, and climate change
actions; and 3. Peace: more inclusive and responsive governance systems, and sustainable and
equitable development, for just and lasting peace in conflict-affected areas. The CE would mostly
contribute to the second pillar on Planet and Prosperity, but implemented in an inclusive way it can
also contribute to pillar 1 People. Pillar 3 Peace and inclusive governance systems will be required to
implement a CE successfully.
3.2 Philippines development priorities and needs which require CE practices to be
addressed
1. Municipal waste management, reduction of unmanaged waste and wastewater treatment,
improve OHS and working conditions of informal sector and promote healthy communities
Waste management is a development priority for the Philippines and CE practices are essential to
solve the waste crisis. The PDP aims to increase the solid waste diversion rate to 80% by 2022.
Although a national waste management framework exists, the required action for solid waste
management at the local government level is not fully implemented given the inadequate materials
recovery facilities (MRFs) and sanitary landfills available. Even the 10-year solid waste management
plan required by law is only at 51 percent compliance as of 2016 (833 approved out of 1,631 cities
and municipalities). In Metro Manila, only 41 percent of wastes in are diverted for reuse and
recycling. A comprehensive CE approach can help to address this challenging task of reusing,
recovering and recycling more non-renewable materials, such as plastics, and reducing the amount
of materials entering the environment as waste. The CE can potentially help to contribute to a
strategy for integrating the informal waste sector in the solid waste management plans at both
national and local level. CE needs to address working conditions for those handling hazardous waste,
e.g., e-waste or used lead-acid batteries, which are a very common occurrence in the Philippines.
2. Inclusive urbanisation, climate-resilient housing, and disaster risk management in informal
settlements.
Inclusive urbanisation and the construction of affordable, climate-resilient housing is an urgent
development priority of the Philippines. In 2012, 5.4 percent of the urban population, about 2.2
million people, lived in informal settlements in the Philippines. In Metro Manila alone, an
estimated 1.3 million people, or close to 11 percent of the population, lived in informal
settlements (World Bank, 2017). An estimated 4.5 million Filipinos are homeless, with around 3
million homeless in Manila (Torregoza, 2019). If left unaddressed, the housing shortage could affect
as many as 12 million people by 2030. Informal settlements are particularly vulnerable to climate
change related disasters such as typhoons and flooding where resilient and cost efficient housing is
the most urgent need. With 10 percent of the population of 100 million living below the poverty line,
climate resilient housing solutions for the poor is an urgent challenge. CE solutions for sustainable
low-cost buildings include modular architectural systems from renewable materials that reduce the
number of different building parts and reduce waste material.
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3. Clean and affordable energy, access to electricity and climate change mitigation
Another priority is to enable inclusive growth through access to sustainable energy. Moreover,
promotion of renewable energy in the Philippines is crucial to jointly address the global challenge of
climate change. Ensuring reliable and affordable access to energy is a key priority of the Philippine
Development Plan (PDP, 2017-2022) and Energy Plan (2016-2030), in addition to issues like health,
education, rural development and gender equality, it is essential for the improvement of the welfare
of the poor. The circular economy supports the achievement of ambitious electrification targets for
poor areas. Specific CE practices in this area include solar PV mini-grids and bioenergy, e.g., biogas in
rural areas using agricultural waste (see e.g. Williams et al., 2018).
4. Green job creation, innovation & technology and MSME development
In April 2016, the Philippine Government adopted the Green Jobs Act (Republic Act No 10771). The
aim is to leverage the process of structural change towards a sustainable, low-carbon, climate-
resilient economy that creates decent jobs on a significant scale. Current efforts aim to build
capacity and advocacy will develop ways to enable the creation of sustainable enterprises and
decent work opportunities, and to ensure social well-being (ILO, 2018). There are opportunities to
include the CE concept into the planning and these capacity building activities.
Furthermore, The PDP aims to advance science, technology and Innovation, and expand
opportunities in industry and services, especially through increased access to economic
opportunities for micro, small, and medium enterprises (MSMEs). According to the ILO, in a circular
economy, almost 6 million jobs can be created by moving away from an extract-manufacture-use-
discard model and embracing the recycling, reuse, remanufacture, rental and longer durability of
goods (ILO, 2018).
The circular economy offers innovation and employment opportunities for a range of different
industry sectors ranging from reprocessing of metals and materials, services and (automotive) repair
services, (re-)manufacturing, agriculture and forestry, food processing, construction and recycling
and waste management. According to the Philippines Statistics Authority (PSA, 2019), in 2018,
employment in the wholesale and retail trade. and repair of motor vehicles was 19.4 percent,
manufacturing 8.8 percent, agriculture and forestry 21.6 percent, and construction 9.4 percent.
Employment in all these sectors will be impacted by the circular economy. Furthermore, water
supply, sewerage and waste management sectors accounted for only 0.1 percent of total
employment in the Philippines, these sectors can expect growth in employment in the transition to a
circular economy.
5. Improving access to clean water and sanitation in informal settlements
There are various circular economy approaches to sanitation and access to clean water which can
have positive impact for the urban poor by focusing on waste processing at the municipal level
(Toilet Board Coalition, 2017). There are still a large number of Filipino people without access to
sanitation. According to figures cited by the National Statistical Coordination Board (NSCB) in July
2012, 92.5% of households had access to basic sanitation (i.e., sanitary toilets) in 2011, up from 76.0%
in 2008, though the figure was projected to decrease to 83.8% by 2016 (ABD, 2013).
3.3 Material composition and footprints of the Philippine economy
Over the last three decades, the Philippines has shifted from a renewable resource based to a non-
renewable material-based economy. The Philippines also shifted from being net resource
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dependent in 1980 to being a net resource provider in 2014, as shown by negative physical trade
balance due to the increased export of metal ores. The shift from biomass (51 percent in 1980) to
non-metallic minerals-based consumption (51 percent in 2014) shows that the transition from an
agrarian towards an industrial metabolic profile is well underway (see Figure 7).
Figure 7: Material Footprint/capita (by main categories) and Direct Material Consumption/capita (total) in
the Philippines (source: Martinico-Perez et al. 2018a)
The overall level of resource consumption and domestic material consumption (DMC) of the
Philippines is still medium in size, compared to other countries. The DMC (domestic
extraction+imports−exports) increased from 282 Mt (6.0 t per capita) in 1980 to 581 Mt (5.9 t per capita) in 2014, with a compounding annual growth rate of 2.2%. At the same time, the total
material footprint of the Philippines increased from 198 Mt in 1990 to 364 Mt in 2010.
The DMC of the Philippines was 5.9 t/capita in 2014, fluctuating between 3.9 and 6.0 t per capita
over the past three decades. The MF has been dominated by biomass, but with a declining share
from 55% (109 Mt) in 1990 to 44% (159 Mt) in 2010. Non-metallic minerals increased from 32% (63
Mt) in 1980 to 42% (155 Mt) in 2010. Similarly, fossil fuels increased from 10 Mt (5%) to 33 Mt (9%)
(Martinico-Perez et al. 2018a).
The lower MF (consumption indicator) than DMC (production indicator) suggests that the average
amount of materials embodied in imports is lower than the average amount of materials embodied
in exports. This trend has been heavily influenced by the growing consumption of construction
minerals in the period since 2014. Biomass and metal ores are now the country's main material
exports, also accounting for a large share of the country’s material footprint.
As the Philippines economic structure changes, waste composition is shifting from biodegradable to
non-biodegradable materials like plastics, metals and non-metallic minerals. Disposal of these
materials poses challenges in terms of quantity, handling and treatment. Martinico-Perez et al.
(2018b) find that materials consumed are released to the environment at a fast rate, the increased
output to the environment signifies inefficient allocation and use of resources as well as low levels of
circularity which keep resources in use for longer. Direct material inputs in the Philippines have
grown at 2.4% yearly, from 293 million tonnes in 1980 to 661 million tonnes in 2014. Domestic
processed output, or materials released to environment, has tripled from 96 million tonnes in 1980
to 260 million tonnes in 2014, with 89% as emission to air (Martinico-Perez et al., 2018b).
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According to the Asia Pacific Energy Research Centre (APERC, 2019) Energy and Demand Outlook,
the share of coal in the country’s Total Primary Energy Supply (TPES) will increase significantly (in the Business –as –Usual /BAU scenario), from 26% in 2016 to 39% in 2050, to meet surging electricity
demand with domestic resources. Renewable energy accounts for 20% of energy supply, down from
24 percent in 2016. Even with a doubling of renewable generation, large increases in fossil fuel
generation are expected.
A policy approach should be adopting additional policies to mitigate environmental concerns
associated with coal use, and take measures to address its increasingly vulnerable energy security.
3.4 Current circular economy related policies and frameworks in the Philippines
3.4.1 Solid waste management policies
The current main policy which links directly to the circular economy is the national policy on solid
waste management (Republic Act 9003), Republic Act 9003, also known as the ‘Ecological Solid
Waste Management Act 2000.’ It provides the legal framework for the country’s systematic,
comprehensive, and ecological solid waste management program that shall ensure protection of
public health and the environment. It also provides for the necessary institutional mechanisms with
the creation of the National Solid Waste Management Commission (NSWMC) which shall oversee
the implementation of solid waste management plans and prescribe policies as well as incentives to
achieve objectives of the Act. It mandates solid waste segregation at source, it also mandates the
local government units (LGUs) to create their respective Solid Waste Management Boards, formulate
their ten-year Solid Waste Management Plans, building of materials recovery facilities (MRFs) and
final disposal facilities such as sanitary landfills.
RA 9003 was signed into law in 2001, but in practice there has been very little change in solid waste
management. A significant percentage of the population are still unfamiliar about the law, about the
need for solid waste segregation, and do not understand the fact that mismanagement of solid
waste contributes to a lot of environmental degradation, and is a significant factor in street flooding
during the monsoon rains through blocked drains and water ways. According to the NSWMC, waste
generation increased from 37,427.46 tons per day in 2012 to 40,087.45 tons in 2016.
The PDP highlights that the waste management problem has persisted despite 38 percent
compliance of local government units (LGU) RA 9003. The greater majority have yet to comply and
the reason cited is the lack of funds among LGUs to put up the waste collection and management
infrastructure facilities required by RA 9003. As of September 2017, local governments have
submitted 1,460 solid waste management plans to the NSWMC Secretariat but unfortunately, only
318 solid waste management plans have been approved so far (Senate of the Philippines, 2017). In
addition, only few households practice 3Rs (reduce, reuse, and recycle) in waste management (NEDA,
2017).
Regarding the issue of e-waste, the Philippines currently does not have a specific regulation covering
this growing waste stream. E-waste is classified as hazardous waste, and the Republic Act No. 6969,
or the ‘Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990,’ regulates
materials with hazardous components, but there is no explicit provision for e-waste. A set of
guidelines, ‘Guidelines on the Environmentally Sound Management of Waste Electrical and
Electronic Equipment (WEEE)’ was issued by DENR.6
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3.4.2 Sustainable public procurement (SPP) to stimulate circular economy (CE)
Sustainable public procurement (SPP) policies can contribute to the development of the CE. In the EU monitoring framework for the CE, SPP is included as one of the indicators. The rationale is that public procurement accounts for a large share of consumption, and can drive the CE (EC, 2018). Through leading by example, governments can encourage businesses and households to follow similar purchasing policies. The Government of the Philippines has passed the “The Philippine Green Public Procurement
Roadmap: Advancing GPP until 2022 and beyond” in 2017 (see also the SWITCH-Asia Policy Support Component). This Green Public Procurement Roadmap integrates green practices into the existing procurement process as covered by the Government Procurement Reform Act (Republic Act (RA) 9184, GPRA 2003,) ‘An Act Providing for the Modernization, Standardization and Regulation of the Procurement Activities of the Government and for Other Purposes’. The Roadmap embodies the government’s commitment towards transforming the market, as well as reflects the strategies for green procurement of commonly used and non-commonly used supplies and equipment. This existing Roadmap could be directly aligned with a CE strategy and indicator systems to measure circularity of the Philippines. In the specific case of plastic waste, SPP can stimulate the use and consumption of post- consumer recyclates by reducing primary resource consumption through commitment to procurement of products which have embedded recycled content (Hogg, et al, 2018). Such initiatives can be applied at national and local levels of government, and could set purchasing guidelines requiring particular products to contain a minimum amount of recycled content. SPP is appealing as it couples increased concern about environmental quality with governments leading the way by improving their own purchasing habits. However, the influence that a SPP policy will have, depends on the sector. When applied to an area where the government sector is a large co-ordinated purchaser of relevant products or services, the influence can be significant.
3.4.3 Housing and construction policies for climate resilient housing in informal settlements
A number of policies and plans relating to housing and construction are relevant for both the context
of SDG 12 and SDG 11 which aims to “make cities and human settlements inclusive, safe, resilient, and sustainable.” To mention are the 2017-2022 National Urban Development and Housing
Framework (NUDHF), and the Department of Human Settlements and Urban Development Act (RA
11201). The strategies for housing under the NUDHF and RA 11201 include the promotion of
resilient and affordable housing.
Furthermore, the National Informal Settlement Upgrading Strategy (NISUS) is the main policy
relating to informal settlements, formulated by the Housing and Urban Development Coordinating
Council (HUDCC). The NISUS 2014-2024 institutionalized major shifts in the government’s housing programme for Informal Settler Families (ISFs). With the NISUS, the government encourages the
creation of an enabling policy environment that allows people the opportunity to transform from
informal settlers to active participants of the urban economy, and for the potential beneficiaries to
fully accept and assume responsibilities that go with the transformation. The NISUS adopts a
community-driven development approach, which would aid ISFs in planning the upgrading of their
settlements according to their needs and priorities within the constraints of their affordable limits,
through a community action planning process. The NISUS targeted to assist one million ISFs over a
period of ten years.
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Concrete actions using circular economy principles to benefit ISFs could include improved
sanitation and access to clean water, modular low-cost construction, and job opportunities in a
formalised repair and recycling sectors.
3.4.4 Renewable energy and rural electrification policy frameworks
Promotion and diffusion of renewable energy sources are part of the CE. In addition, the CE
emphasises the need to ensure that solar panels, wind turbines, and batteries are accounted for at
the end of their product life. Globally, it is estimated that by 2050, 78 million tonnes of
decommissioned equipment are estimated to arise from solar panels alone (IRENA and IEA-PVPS,
2016)
The Philippine government has promoted rural electrification as early as 1999 through the
Accelerated Barangay Electrification Program (ABEP) which was launched with the initial partnership
of several energy agencies lead by the Department of Energy (DOE). The subsequent Rural
Electrification program (REP) of the Philippines, and the Expanded Rural (ER) Electrification Program
envisaged to achieve 100% barangays electrification by 2008, and 90% household electrification by
2017. One of the main thrusts of the ER Electrification Program was to formulate and recommend
policies and guidelines to implement rural/missionary electrification with greater private sector
participation in a holistic and sustainable manner. Many of the previously electrified barangays
particularly those of solar projects were found to be short lived due to absence of a strong
sustainable mechanism (DOE, no date).
Furthermore, to facilitate the transition from fossil fuel-based electricity generation to renewable
energy-based electricity generation, and make renewable energy investments competitive in the
country, the Philippine government introduced Renewable Energy Act of 2008. The Act set out a
policy framework for net-metering, in an aim to incentivize small-scale renewable energy generation
(up to 100 kW). A feed-in tariff scheme for wind, solar, biomass and hydro was introduced in 2012. A
high feed-in tariff is offered to solar project developers, and a strong project pipeline resulted in a
vast capacity growth in 2016. Additionally, the government aims to increase the solar PV
installations to reach 3 GW of utility solar in 2022, with the cumulative solar installation is predicted
to reach 8.7 GW by the end of 2030. Solar rooftops are expected to constitute 35% of the total solar
installations (Mordor Intelligence, 2018). These government initiatives are likely to drive the growth
of the Philippine solar energy market.
The circular economy is linked to the renewable energy development and will become increasingly
important as both roof top installations and off-grid energy equipment (solar PV panels, inverters
and battery storage systems) reach their end-of-life, some of them often earlier than anticipated.
This end-of-life solar energy equipment requires appropriate collection, recycling and disposal
systems to prevent pollution from heavy metals and toxins contained in the equipment.
3.4.5 Green job creation policies
The Philippine Green Jobs Act of 2016 (RA 10771) which fosters a competitive, low-carbon, and
environmentally sustainable economy, through the promotion of green jobs is relevant for the
circular economy. The law mandates the development of a National Green Jobs Human Resource
Development Plan which lays down strategies to support the development of green skills and
competencies required in a green economy. It mandates the just transition of work by providing
adequate and sustainable social protection for job losses and displacement, and ensuring skills
development and social dialogue. Further development of the Green Jobs Act could include the
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inclusion of considerations how the circular economy will affect jobs, both positively and negatively,
and policy measures to support the development and skills need in the circular economy.
3.4.6 The role of national standards for circular economy
On international level, a number of standards relating to the circular economy are being developed,
lead by the International Standardisation Organisation (ISO). In the UK, BSI Group has developed a
framework standard for ‘