PH MSMEs tap new ASEAN circular tool to fight waste and skyrocketing costs

MANILA, Philippines — Micro, small, and medium enterprises (MSMEs) in the Philippines are getting a major sustainability upgrade in a bid to turn lofty “green goals” into hard-nosed business survival strategies.

"Many MSMEs recognize the growing importance of sustainability but still lack practical tools to turn commitments into measurable action. The circular economy provides a practical framework for MSMEs to demonstrate commitment and action,” said Jay Yuvallos, Chairman of the East Asia Business Council (EABC).

Yuvallos said that local MSMEs are joining a regional pilot of the Circular Business Check—a self-assessment tool designed to help small businesses slash waste, boost efficiency, and survive increasingly strict global market demands.

The initiative, backed by the European Union’s SWITCH-Asia Programme, places the Philippines alongside Indonesia and Thailand in testing the digital tool ahead of a broader regional rollout across ASEAN in September 2026.

While multi-billion-dollar conglomerates have dedicated teams to navigate Environmental, Social, and Governance (ESG) compliance, small neighborhood businesses and local manufacturers often find themselves left out in the cold.  To bridge this gap, the Circular Business Check acts as an entry-level digital diagnostic.

Yuvallos bared that the Circular Business Check allows business owners to assess their readiness to adopt circular economy practices such as reusing, recycling, and reducing raw materials; measure the effectiveness of their current eco-friendly initiatives and receive concrete, tailored recommendations on what practical steps to take next.

Why this matter for the Philippine economy?

In the Philippines, according to Yuvallos, MSMEs aren't just a market segment, they are the economic backbone. Citing data from the BSP Research Academy, it showed that MSMEs comprised 99.6 percent of all business establishments in the country with an employment rate of 67 percent, contributing some 40 percent to the country’s gross domestic product (GDP) and an export revenue of 25 percent for the economy.

Yet, these very engines of growth are facing immense pressures. High utility costs, supply chain disruptions, rising labor costs, and bureaucratic red tape often threaten their daily operations. Transitioning to a circular model is no longer just about "saving the planet"—it’s about saving the bottom line, Yuvallos added.

"Circular practices can help address these pressures by improving resource efficiency, reducing input waste, cutting avoidable operating costs, and helping owners make better pricing, investment, and financing decisions," noted John Paolo Rivera, a senior research fellow at the Philippine Institute for Development Studies (PIDS).

By eliminating waste and reusing materials, small businesses can open up entirely new revenue streams while building resilience against unpredictable global supply chains. Furthermore, meeting these standards unlocks access to green financing and export opportunities, as international buyers increasingly refuse to work with high-emission, wasteful suppliers, noted Yuvallos.

Part of a larger regional push is the pilot program that was borne out of the East Asia Circularity Agenda, which was formalized during the 66th EABC Meeting in Tokyo under the co-chairmanship of the Philippines and Japan.

To solidify the initiative, Yuvallos signed a strategic cooperation charter alongside Thomas Thomas, President of the ASEAN Circular Economy Business Alliance (ACEBA), and Muhammad Firdaus Abdullah of ARAIBA Sdn. Bhd.

By simplifying sustainability into bite-sized, actionable steps, local business leaders hope the tool will strip away the intimidating corporate jargon surrounding ESG and empower the average Filipino entrepreneur to thrive in a rapidly greening global market. (Photos: Google Images)