‘TWENTIETH CONGRESS OF THE —_)
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No._ 2479

Introduced by Hon. Antonio B. Legarda, Jr.

AN ACT
ESTABLISHING A COMPREHENSIVE FRAMEWORK FOR CIRCULAR
ECONOMY IN THE PHILIPPINES, PROVIDING MECHANISMS FOR WASTE
MINIMIZATION, EXTENDED PRODUCER RESPONSIBILITY, CIRCULAR
PROCUREMENT, AND COMMUNITY PARTICIPATION IN SUSTAINABLE
RESOURCE USE

EXPLANATORY NOTE

‘The Philippines is facing a compounding resource and pollution crisis. Every
day, the country generates an estimated 61,000 metric tons of solid waste—a total of
over 21 million metric tons annually.’ This includes an overwhelming. number of
plastic sachets (163 million), shopping bags (48 million), and thin-film bags (45
million) daily. ? In 2019, the Philippines accounted for 36.38% of global ocean plastic
leakage, the highest of any country.?

These figures expose not only the scale of our environmental challenges, but
also the urgent need for systemic transformation in how we extract, use, and discard
materials. The prevailing linear economy — take, make, dispose—is no longer viable.
It depletes resources, worsens inequality, burdens local governments, and imposes

massive environmental and economic costs.

| Retrieved on 07 July 2025, from Emesto M. Pemia, Waste management for renewable energy,
https .phyin_ the news/waste-management-for-renewable-eneray/

bttDs://opinion inquirer net/157304/waste-management-fo:-renewabie-enera

2 Retrieved on 07 July 2025, from Ateneo de Manila University ~ News, “Refill Revolution Returns
Ateneo,” https://www ateneo edu/news/2025/03/ 1 L/refill-revolution-returns-ateneo

3 Retrieved on 07 July 2025, from earth.org, "How Did the Philippines Become the World's Biggest
Ocean Plastic Polluter?,” https://earth.org/philippines-plastic



An estimated 78% of the material value of plastics~ nearly US$890 million
annually —is lost due to low recovery rates.t Meanwhile, the economic cost of plastic
pollution to the Philippines — factoring in impacts on health, tourism, and fisheries —
is valued at over US$1.2 billion per year.

To reverse this trajectory, this bill proposes a comprehensive legal framework
for a circular economy—one that keeps materials in use for as long as possible,
regenerates natural systems, and redefines growth away from waste and pollution.
Globally, this transition holds transformative potential. The UNDP estimates US$4.5
trillion in global economic benefits by 2030 from circular models.* The ILO forecasts
up to 8 million new jobs worldwide,” while Southeast Asia alone could generate 6.6
million circular economy jobs by 2030 with the right policies. *

While the Philippines has foundational policies in place—such as Republic Act
No. 9003 (Ecological Solid Waste Management Act of 2000) and Republic Act No.
11898 (Extended Producer Responsibility Act of 2022)—implementation remains
fragmented and inadequate. As of early 2025:

1. Only 11,625 Materials Recovery Facilities (MREs) serve 42,011 barangays
(just 27.7% coverage),
2. Only 237 sanitary landfills are operational for 1,634 LGUs, ® and

* Retrieved on 07 July 2025, from World Bank, Market Study for the Philippines: Plastics Circularity

Opportunities and Barriers, tos: //vww.worldbank. ora/en/country/philippines/publication/market-
for-philippin: lastics-circularit yrtuunite ni wrriers-re banding:

5 Retrieved on 07 July 2025, from Climate Impacts Tracker, Plastic Pollution in the Philippines,
ttps://mww.climateimpactstracker.com/plastic-pollution-in-the-philippines/

© Retrieved on 07 July 2025, from UNDP Climate Promise, “Transitioning to a circular economy: The
future we cannot afford to delay,” hitos://climatepromise.undp. org/news-and-stories/ transitioning:
circular-economy-future-we-cannot-afford.delay

7 Retrieved on 07 July 2025, from International Labour Organization, “Global South circular economy
could generate millions of job opportunities,” https: //www.ilo.ora/resource/news/global-south-
circular-economy-could-aenerate-millions-job-opportunities

* Retrieved on 07 July 2025, from Xueling Lee, Chris Addy, Roger Thompson, and Rose Farah,
Promoting Equitable and Inclusive Green Job Growth in Southeast Asia, The Bridgespan Group,
https://www.bridgespan.ora/aetmedia/9ab68ac6-Gba2-47d6-a2c3-910dd3e7 8615 /promoting:
equitable-inclusive-green-job-growth-in-south if

° Retrieved on 07 July 2025, from Philippine Institute for Development Studies, "Waste management
is a collective responsibility: contribute your share for a healthier environment,”

bttos/ aw pids gov.ph/details/news/in-the-news/waste-management-is-2-collective-responsibality
nitribute-your-share-for-a-healthier-
environmentét:-:text= Despite %20the% 20mandates%%200f%20Republic, the%20financial%20and%:

Otechnical%20aspects.


3. Waste segregation and EPR compliance remain weak, particularly for
small and medium enterprises.

‘This bill addresses these gaps through a whole-of-government, whole-of-
economy approach. Its key features include:

1. Philippine Circular Economy Roadmap - Anchored in measurable
goals, transition pathways, and localization strategies.

2. Circular Economy Inter-Agency Council (CE-IAC) - Ensures cross-
sectoral policy alignment across environment, finance, industry, and
development agendas.

3. Circular Economy Incentive Code - Harmonizes fiscal and non-fiscal
incentives with the Department of Finance and Board of Investments,
supporting enterprises, cooperatives, LGUs, and circular innovation.

4. Innovation Sandboxes - Regulatory flexibility zones for real-world
testing of circular models, such as refill/reuse platforms, reverse
logistics, and biomaterials.

5. Local Circular Economy Action Plans - Embedded in Local
Development Councils via advisory subcommittees, ensuring bottom-
up implementation and community participation.

6. SUP Transition Mandate - Requires a national plan within one (1) year
and a full five-year phase-out of non-recyclable, non-compostable
single-use plastics, aligned with local capacity and industry readiness.

The bill also builds upon existing frameworks:

1. The Philippine Development Plan (PDP) 2023-2028 identifies circularity
as key to inclusive and climate-resilient growth;

2. The National Climate Change Action Plan (NCCAP) cites circularity as
a resilience measure; and

3, The Philippine Ecosystem and Natural Capital Accounting System
(PENCAS) Act of 2024 provides the data infrastructure to track resource
flows and inform adaptive strategies.

The circular transition is not just an environmental imperative—it is an

economic opportunity and a social contract. It can reduce inequality, empower local


industries, and create resilient livelihoods — especially in sectors like recycling, repair,
manufacturing, and sustainable packaging.

The Philippines can transform from one of the world’s leading plastic polluters
into a regional pioneer in circular economy innovation. But to do so, we must act
decisively — with coherence, ambition, and long-term vision.

In line with the policy espoused by its original proponent, Senator Loren
Legarda, this bill is being introduced as a counterpart measure. In view of the

foregoing, the immediate passage of this measure is earnestly sought.

Ld
HON. ANTONIO. Geafon.


TWENTIETH CONGRESS OF THE)
REPUBLIC OF THE PHILIPPINES. )
First Regular Session )
HOUSE OF REPRESENTATIVES

House Bill No, 2479

Introduced by Hon. Antonio B. Legarda, Jr.

AN ACT
ESTABLISHING A COMPREHENSIVE FRAMEWORK FOR CIRCULAR
ECONOMY IN THE PHILIPPINES, PROVIDING MECHANISMS FOR WASTE
MINIMIZATION, EXTENDED PRODUCER RESPONSIBILITY, CIRCULAR
PROCUREMENT, AND COMMUNITY PARTICIPATION IN SUSTAINABLE
RESOURCE USE

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

Section 1. Short Title. - This Act shall be known as the “Philippine Circular
Economy Promotion Act.”

Sec. 2. Declaration of Policy. - It is the policy of the State to protect and advance
the right of the people to a balanced and healthful ecology in accord with the rhythm
and harmony of nature and promote sustainable development. In line with the 2030
Sustainable Development Agenda, the Philippines adopts the goals of making cities
and human settlements inclusive, resilient, and sustainable; ensuring sustainable
production and consumption patterns; taking urgent action to combat climate change
and its impacts; and restoring natural ecosystems, in line with national development
priorities and capacities.

‘Towards this end, the State shall prevent and reduce the impact of certain
plastic products, particularly marine litter, on the environment and human health, as,
‘well as promote the transition to a circular economy with innovative and sustainable
business models, products, and materials.

Sec. 3. Definition of Terms. - For purposes of this Act, the following terms are
defined:


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a) Alternative delivery systems shall refer to sustainable eco-friendly
apparatuses or processes for storing and dispensing different retail
items, goods, and consumer products;

b)

Assimilating capacity assessment shall refer to an assessment of the
assimilative capacity of a certain ecosystem, which is the ability to
accommodate a particular activity or rate of an activity (usually
pertaining to waste and residuals-producing activities such as the
discharge of contaminants), without unacceptable impact;

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Biocapacity assessment shall refer to an assessment of the biocapacity,
which is the ability of biologically productive ecosystems to provide the
resources and services used by humanity;

d) Business enterprises shall refer to establishments engaged in the
production, manufacturing, processing, repacking, assembly, or sale of
goods and/or services, including service-oriented enterprises. It shall
include self-employed or own-account workers, micro, small and
medium enterprises (MSMEs), and community-based business
enterprises;

e) Capacity assessment shall refer to the generic term for the following sub-
classifications: carrying capacity assessment, biocapacity assessment,
and assimilating capacity assessment. The assessments shall focus on
ecosystem and environment-related systems of interest;

£) Carrying capacity assessment shall refer to an assessment of the carrying
capacity of a certain ecosystem, which is the maximum number of
people, or individuals of a particular species, that a given area of the
environment can sustain without causing environmental, economic or
socio-cultural stress or damage;

2) Circular economy shall refer to a system approach wherein products are
designed for durability, reuse, and recyclability, and materials for new
products come from old products. It minimizes waste and maximizes
the use of natural resources;

h) Collection shall refer to the act of gathering and/or removal of solid

waste from a source or from a communal storage point and/or facility;

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i) Consumer shall refer to a natural person who is a purchaser, lessee,

recipient or prospective purchaser, lessor or recipient of consumer
products, services or credit, pursuant to the defined terms under

Republic Act No. 7394 or the Consumer Act of the Philippine

j) Ecological footprint shall refer to human demand/activity on the
biosphere, the extent to which the regenerative capacity of the planet is
being used by human activities, and related methods of assessing or
computing the same;

k

Incentives shall refer to incentives provided for under RA No. 9520
otherwise known as the Philippine Cooperative Code of 2008, RA No.
9178 otherwise known as the Barangay Micro-Business Enterprise Act
of 2002, RA No. 9501 otherwise known as the Magna Carta for Micro,
Small and Medium Enterprises, Executive Order No. 226 otherwise
known as the Omnibus Investment Code of 1987, RA No. 10771
otherwise known as the Green Jobs Act of 2016 or incentives as defined
by the local government unit through an ordinance specifically for the
purpose of this Act, where applicable;

National Solid Waste Management Commission (NSWMC) refers to the
inter-agency body created under RA No. 9003 responsible for solid

waste management policymaking, coordination, and oversight;

m) Natural Capital Accounting and Valuation or Environment and Natural
Resource Accounting and Valuation shall refer to a process that provides a
systematic way to measure and report on stocks and flows of natural
capital, recognizing the environment as an asset that must be
maintained and managed;

n) Permaculture shall refer to an innovative framework for creating,

sustainable ways of living. It is a practical method of developing
ecologically harmonious, efficient, and productive systems. The
application of permaculture principles enables households,
communities, and businesses to creatively re-design their environment

with less energy and resources;


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©) Producer shall also refer to a manufacturer which has been defined under
RA No. 7394 as “any person who manufactures, assembles, or processes
consumer products, except that if the goods are manufactured,
assembled or processed for another person who attaches his own brand
name to the consumer products, the latter shall be deemed the
manufacturer. In case of imported products, the manufacturer’s
representative or, in his absence, the importer, shall be deemed the
manufacturer”;

p) Recovery or Resources recovery shall refer to the collection, extraction or
recovery of recyclable materials from the waste stream for the purpose
of recycling, generating energy or producing a product suitable for

beneficial use;

q) Recycling shall refer to the treatment of used or waste materials through
a process of making them suitable for beneficial use and for other
purposes, and includes any process by which solid waste materials are
transformed into new products in such a manner that the original
product may lose their identity, and which may be used as raw materials
for the production of other goods or services;

1)

Single-use plastics shall refer to plastic products which are not conceived,
designed and placed on the market to accomplish, within its life
span/cycle, multiple usage or rotations such as being returned to the
producer for refill or reused for the same purpose for which it was
conceived. These include, but are not limited to, items such as grocery
bags, food packaging films and bags, straws, stirrers, containers,
styrofoam/styros, cups, sachets and plastic cutlery;

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Sustainable Consumption and Production (SCP) shall refer to the use of
services and related products, which respond to basic needs and bring a
better quality of life while minimizing the use of natural resources and
toxic materials as well as the emissions of waste and pollutants over the
life cycle of the service or product so as not to jeopardize the needs of

further generations; and


t) Source reduction refers to the reduction of solid waste before it enters the
solid waste stream by methods such as product design, materials
substitution, materials reuse, and packaging restrictions.

Sec. 4. Scope. - This Act shall apply to producers and consumers involved in
value chains of all goods, products, services, and processes contributing to the
Philippine economy, and to the mechanisms facilitating the policy, regulatory, and
advocacy measures to promote, implement, monitor, and evaluate the strategies on
circular economy, complementing thereby the goals and targets of sustainable
consumption and production.

The activities contemplated in this Act cover the interplay between the public
and private sectors, as well as national, subnational, regional, and global stakeholders,
taking into consideration the trajectories under the better normal or green recovery
directions consistent with the national economy and planet-people-nature nexus.

In pursuing the circular economy, the following value creation principles,
which underpin the transition from a value chain to a value circle perspective, shall
be adhered to:

a) The “inner circle” refers to minimizing comparative materials use vis-a-
vis the linear production system. The tighter the circle, i.e, the less a
product has to be changed in reuse, refurbishment, and
remanufacturing and the faster it returns to use, the higher the potential
savings on the shares of material, labor, energy, and capital still
embedded in the product, and the associated externalities (such as
greenhouse gas emissions, water, and toxicity);

b)

The “circling longer” refers to maximizing the number of consecutive
cycles (be it repair, reuse, or full remanufacturing) and/or the time in
each cycle. Each prolonged cycle avoids the material, energy, and labor
of creating a new product or component;

c

The “cascaded use” refers to diversifying reuse across the value chain or
transforming materials across product categories to offset the need for
virgin material inputs;

d) The “pure inputs” postulates that uncontaminated material streams
increase collection and redistribution efficiency while maintaining

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quality, particularly of technical materials, which in turn extends
product longevity and thus increases material productivity;

e) The utmost need to remove the use of toxic chemicals and hazardous
substances in the production of goods and products. The elimination of
toxicity in the production line will protect workers’ health and
guarantee safe and clean recycling processes throughout the product’s
lifecycle; and

f) All products are designed to avoid waste leakage into the oceans and
environment and must meet the guaranteed minimum number of
recycling cycles per material,

Sec. 5. Product or Process Design. - Any entity or individual engaging in the
design of process, equipment, product, and packing material shall, in accordance with
the requirements of reducing resource consumption and waste generation, give
priority to choosing designs and materials that are easy to be recovered, dismantled,
and degraded; non-toxic or of low toxicity, with minimal environmental and health
risks, in addition to complying with the mandatory requirements as prescribed in
relevant industry standards.

With respect to electric and electronic products that may pollute the
environment in the processes of dismantling and handling, toxic and harmful
substances as defined by law or treaty may not be used in the design. ‘The design of
product packing shall be subject to standards for product packing to avoid wasting
resources and polluting the environment due to overpacking.

Sec. 6. Innovation in Products and Services. - Innovation contemplated in this Act
shall include the following, among others:

Mobile technology which enables universal and low-cost access to data
and applications and reduces the need for physical resources;
b)

Machine-to-Machine (M2M) Communication used in factory control
systems and vehicle telematics, enabling critical mass to mainstream
M2M use as wireless network coverage expands worldwide;

c) Cloud Computing/Dematerialization, which enables the replacement of

"something physical" with a digital alternative, transforming data and

service industries;


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d) Social technology which reduces the cost of setting up sharing platforms
by tapping into existing networks and facilitating consumer feedback;
e

Big Data Analytics that, consistent with the circular economy, enables
organizations to generate revenues from product use instead of sales;

£) Modular Design Technology which revolutionizes product functionality
and extends product lifecycles by allowing only defective parts to be
replaced or repaired;

g) Advanced Recycling Technology which enhances recycling efficiency
and returns on circular economy investments;
h) Life and Material Sciences Technology which creates circular material

input options at scale and enables outputs to be reused as inputs;

Trace and Return Systems which support circular business models by
making product collection for reuse, repair, recovery, refurbishment, or
recycling more cost-effective; and

j) 3D Printing which facilitates repair and creates opportunities for
circular inputs that are biodegradable or infinitely recyclable.

Sec. 7. Role of National Government Agencies and Stakeholders. ~

a) The Department of Economy, Planning, and Development (DEPDev)
shall formulate and regularly update the Philippine Action Plan for
Sustainable Consumption and Production (PAP4SCP), which shall serve
as the anchor plan for mainstreaming the circular economy in
development activities and ensuring its contribution to sustainable
development. DEPDev shall lead in the implementation of this Act; and
The Department of Environment and Natural Resources (DENR) and
Philippine Statistics Authority (PSA) shall formulate the National

b)

Natural Capital Accounting or Environment and Natural Resource
Accounting and Capacity Assessment Plan (NCACAP). The Plan shall
institutionalize a comprehensive system for accounting, valuing, and
assessing the quality and integrity of the country’s natural capital, and
support policy, technical, technological, administrative, and market-

based interventions.


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°

4)

‘The NCACAP shall enable the following programs and activities:

1. Development of localized methodology for accounting and
valuation of capital resources;

2. Development of implementing guidelines and methodology on
capacity assessments;

3. Development of standards and indicators for calculating,
ecological footprints;

4. Development of circularity indicators and adequate metrics to
assess circular economy performance;

5. Development of guidelines on damage compensation;

6. Design of finance modalities for payment for ecosystem services
(PES) and user-fee systems;

7. Implementation of natural capital accounting and capacity
assessment interventions;

8. Conduct of ecosystem loss and damage valuations;

9. Development of data transparency arrangements and reporting
systems; and

10. Development of ICT infrastructure/ platforms to support NCA

Ss

and capacity assessment programs.
The DENR and PSA shall lead the formulation and implementation of
the NCACAP within one (1) year from the effectivity of this Act, in
consultation with concerned agencies including DICT, DEPDev,
Department of Finance (DOF), Department of Agriculture (DA), Office
of Civil Defense (OCD), Climate Change Commission (CCC), and
relevant stakeholders.

The DOF shall identify incentives and market interventions to
mainstream circular economy principles, in line with harmonized
incentives under existing laws;

The DTI, in coordination with the Department of the Interior and Local
Government (DILG), shall lead in developing standards for circular

economy product or process design; and

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e) Non-government organizations, civil society organizations, and
academe working in marine ecosystems, healthcare, forest conservation,
mining, and sustainable agriculture shall be consulted by DEPDev,
DENR, and PSA in the formulation of PAP4SCP and NCACAP.

‘The implementation of the NCACAP under this Act shall be aligned with the
standards, institutional arrangements, and reporting mechanisms established under
Republic Act No. 11995 or the PENCAS Act. All relevant data, indicators, and
ecosystem accounts shall be consistent with those generated by the Philippine
Statistics Authority pursuant to the PENCAS Act.

Sec. 8. Creation of the Circular Economy Inter-Agency Council. — There is hereby
created a Circular Economy Inter-Agency Council (CE-IAC) to serve as the primary
coordinating and oversight body for the implementation of this Act. Itshall harmonize
strategies, resolve conflicts among implementing agencies, monitor compliance, and
ensure alignment with national development goals.

‘The CE-IAC shall be composed of the following:

1) Chairperson: Secretary of DEPDev
2) Co-Chairs: Secretaries of the DENR, DTI, and DOF
3) Members:

a) DOST

b) DA

©) DepEd

d) TESDA

e) DILG

f) DICT

g) ccc

h) NSWMC

i) PSA

)) ocD

k) Two (2) representatives from the private sector, to be appointed

by the Council


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1) Two (2) representatives from civil society organizations (CSOs)
working on sustainable development, ecological governance, or
waste management

m) One (1) representative from local government units (LGUs),
nominated through the League of Provinces of the Philippines

The CE-IAC shall meet at least bi-annually and may convene special sessions
as necessary. It may create technical working groups (TWGs) or task forces to carry
out specific functions, including monitoring, technical assessments, or conflict
resolution.

The CE-IAC shall be supported by the Economic Development Committee of
the DEPDev as its permanent Secretariat, which shall coordinate documentation,
stakeholder engagement, and inter-agency follow-through.

‘The CE-IAC shall submit an annual Circular Economy Progress Report to the
President and to both Houses of Congress, through the Committee on Sustainable
Development Goals, Innovation, and Futures Thinking of the Senate and the
Committee on Ecology of the House of Representatives. The report shall include: (a)
updates on implementation milestones, (b) metrics on waste reduction and circularity
performance, (c) identified challenges, and (d) policy and legislative
recommendations to further advance the goals of this Act.

Sec. 9. Single-use Plastic Phase-Out and Extended Producer Responsibility Measures
- The phase-out of single-use plastics (SUPs) by business enterprises shall take full
effect five (5) years after the effectivity of this Act.

A transition plan shall be formulated within one (1) year after the effectivity of
this Act, led by the DENR through the NSWMC, in coordination with DTI, DOST,
DILG, DOF, DOLE, DEPDev, CCC, and other stakeholders.

The phase-out and transition plan shall include:

. SUP Production and Consumption Reduction Program;

se

. Extended Producer Responsibility Schemes;
Greener Plastic Product Standards;
|. R&D for Alternatives to SUP Products;

a9

°

. Regulatory Instruments and Incentives for Producers and Consumers;

Collection, Recovery, and Recycling Plan;

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g. Just Transition Plan for displaced workers;

h. Support to businesses adopting zero-waste and sustainable delivery

systems;

i, Awareness-raising and Information, Education, and Communication (IEC)

strategies.

The Plan shall adopt a phased approach considering economic ripple effects,
business model shifts, and worker livelihood transitions.

Sec. 10. Circular Public Procurement Program. ~ All government agencies shall
establish Circular Public Procurement Programs incorporating circular economy
standards and set annual targets. Submissions to the Government Procurement Policy
Board (GPPB) are due six (6) months from the effectivity of this Act. The GPPB shall
submit annual compliance reports to Congress.

The GPPB, in coordination with the Department of Budget and Management
(DBM), Department of Trade and Industry (DT!), and Commission on Audit (COA),
shall issue guidelines within thirty (30) days of effectivity to promote sustainable
government procurement. It shall also lead capacity-building for circular
procurement professionals.

‘The Public-Private Partnership Center and DT!'s Bureau of Product Standards
shall ensure vital infrastructure procurement and product sales comply with this Act.

LGUs shall also integrate circular economy criteria in their procurement
planning and may adopt localized Circular Public Procurement Programs aligned
with national guidelines, subject to capacity-building support from the DILG and
GPPB.

Sec. 11. Integration of Permaculture Principles and Practices. ~ NGAs, GOC

SUCs, and LGUs shall integrate permaculture into programs, services, and operations.

‘The DepEd shall integrate permaculture education into the K-12 curriculum,
covering agrobiodiversity, sustainable mobility, seed saving, food gardens, and
ecological waste management.

The DILG-Local Government Academy shall develop training for LGUs on
permaculture.

TESDA shall offer permaculture-related skills and entrepreneurship training.


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Permaculture integration shall be monitored as part of circularity indicators
under the Circular Economy Monitoring and Accountability Framework (CEMAF).

Sec. 12. Local Circular Economy Action Plans and Incentives for Local Government
Units. ~ All provinces, cities, and municipalities shall prepare and implement a Local
Circular Economy Action Plan (LCEAP) within two (2) years from the effectivity of
this Act. These plans shall be aligned with the PAP4SCP and shall include, at a
minimum:

1. Targets and timelines for waste reduction, reuse, and circular business
models;

2. Local ordinances supporting circular practices and the phase-out of
single-use plastics;

3. Partnerships with communities, MSMEs, cooperatives, and civil society;
and

4, Integration into the Local Development Plan and Annual Investment
Program (AIP).

‘The DILG, in coordination with DEPDev, DENR, and DTI, shall provide
capacity-building programs to assist LGUs in formulating and implementing their
LCEAPs. LGUs that demonstrate measurable outcomes in implementing their
LCEAPs may access the following incentives:

1. Priority access to circular economy project funding from the General
Appropriations Act and the Circular Economy Implementation Fund
(CEIF);

2. Eligibility for performance-based grants or awards from DILG and
DBM;

3. Technical and logistical support for scaling up high-impact circular
initiatives.

The DILG shall jointly monitor LGU compliance and performance, with annual
reporting to the CE-IAC.

Sec. 13. Incentives and Rewards for the Public Sector. - The DBM, with relevant
agencies, shall implement an incentives system for NGAs, GOCCs, SUCs, and LGUs
choosing circular economy standards. Up to 25% of savings from such measures may

be used for additional performance incentives.

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Sec. 14, Capacity-building for Government and Sectors. - Government agencies
shall promote and invest in capacity building to implement circular economy
programs, DOLE, TESDA, DICT, and DENR shall provide technical assistance to their
sectors.

Sec. 15. Strategic Communications Plan. - The PIA shall lead the creation and
implementation of a strategic communications plan for sustainable consumption and
production, aligned with RA No. 9512 (National Environmental Awareness and
Education Act of 2008).

Sec. 16. Mainstreaming Circular Economy in the National Budget. - The DBM shall
align the annual national budget with circular economy goals and sustainable
production and consumption practices.

Sec. 17. Monitoring and Evaluation Framework. - To ensure effective
implementation, transparency, and continuous improvement of this Act, the
following shall be undertaken:

a) The DEPDey, in coordination with the PSA, shall develop and maintain
a Circular Economy Monitoring and Accountability Framework
(CEMAF). This framework shall:

1. Establish key performance indicators (KPIs) for circularity, waste
reduction, resource use, and innovation uptake;

2. Establish standardized protocols for data collection and
submission for all implementing agencies and LGUs;

3. Provide for independent data verification, audits, and third-party
assessments;

4. Align with the PAP4SCP, Natural Capital Accounting plans, and
SDG indicators.

b) All implementing agencies and LGUs shall submit annual progress
reports to DEPDev and PSA, based on prescribed templates and metrics
under the CEMAF.

Results from the CEMAF shalll be used to inform national and local planning,
investment prioritization, and performance-based budgeting.


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Sec. 18. Citizen Participation and Community Engagement. - To ensure broad
public involvement in the implementation of this Act, the following shall be
undertaken:

(a) Local Circular Economy Advisory Committees shall be established by

all provinces, cities, and municipalities, composed of representatives
from civil society, community organizations, and key local sectors.
These Committees shall assist in planning, monitoring, and
recommending programs under the Local Circular Economy Action
Plans.

The Local Circular Economy Advisory Committee may be
constituted as a functional sub-committee or technical working group
under the Local Development Council, Local Special Bodies, or similar
mechanisms established by the LGU, to streamline implementation and

avoid redundancy;

(b) The CE-IAC, in coordination with the DILG, shall convene annual multi-

stakeholder consultations to gather public input and review progress on

national circular economy programs;

(©) LGUs shall integrate circular economy initiatives in their Annual

Investment Plans through participatory planning and budgeting

processes; and

(d) A public feedback mechanism, including an online , shall be
pul

developed by the CE-IAC to enable citizens to suggest solutions, report
violations, and access information related to this Act.

Sec. 19. Circular Economy Implementation Fund. — To support the
implementation of this Act, particularly the operations of the CE-IAC and its technical
working groups, a Circular Economy Implementation Fund (CEIF) is hereby
established.

‘The Fund shall be administered by the DEPDev and sourced from the

a. Age savings allocated for environmental, innovation, or
gency gs

sustainability programs;


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b. Appropriations under the annual General Appropriations Act (GAA)
for DEPDev and CE-IAC member agencies;

c. A portion of proceeds from Extended Producer Responsibility (EPR)
schemes, as may be determined in the Implementing Rules and
Regulations (IRR);

d. Official development assistance, climate finance instruments, and
donations from domestic or international sources.

The CEIF shall be used to support capacity-building programs, technical
working groups, monitoring and evaluation systems, circular innovation pilots,
stakeholder consultations, and other operational or implementation needs as
determined by the CE-IAC.

Sec. 20. Appropriations. — The initial implementation of this Act shall be funded
from the current budgets of concerned agencies.

Thereafter, the necessary funds for the operations of the CE-IAC and the
Circular Economy Implementation Fund (CEIF) shall be included in the annual
General Appropriations Act.

Not less than three percent (3%) of the total appropriations for the
implementation of this Act shall be allocated exclusively for monitoring and
evaluation (M&E) activities, including the development and operation of the CEMA,
third-party audits, and data reporting systems.

Sec. 21. Implementing Rules and Regulations. - The Implementing Rules and
Regulations of this Act shall be drafted jointly by DEPDev, DENR, DTI, DOF and the
CE-IAC. It shall ensure that all member agencies, private sector representatives, civil
society organizations, and LGU networks are adequately consulted during the IRR
development process. The IRR shall include operational details for multi-agency
coordination, funding mechanisms, reporting standards, and monitoring systems in
support of this Act. The IRR shall be issued within one hundred twenty (120) days
from the effectivity of this Act

Sec. 22. Enforcement and Penalties. - To ensure compliance with this Act, the
following shall apply:

Any producer, retailer, importer, service provider, or other covered entity that
fails to comply with the requirements of this Act, including the submission of

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transition plans, adherence to single-use plastic phase-out schedules, or circular
procurement rules, may face the following:

1. Written warnings and compliance orders;

2. Fines ranging from P50,000 to P500,000, based on a matrix of severity,
frequency, environmental impact, and economic benefit from non-
compliance, as defined in the IRR;

3. Suspension or cancellation of business permits or relevant licenses;

4. Disqualification from government incentives and procurement programs;

5, Escalating penalties for repeat or willful violations.

Violations may be detected through the CEMAE, third-party audits, or public
feedback mechanisms established under this Act. Affected entities may appeal such
penalties through a grievance mechanism to be established in the Implementing Rules
and Regulations (IRR), consistent with due process requirements

LGUs that fail to prepare or implement their LCEAPs within the prescribed
period may face administrative sanctions from the DILG, including the suspension of
budget support or exclusion from performance-based circular economy incentives,
subject to due process.

‘The CE-IAC, in coordination with concerned agencies, shalll issue detailed rules
on enforcement, appeals, and penalties within ninety (90) days from the effectivity of
this Act.

Sec. 23. Circular Economy Regulatory Sandbox. - ‘To encourage innovation and
support the development of new business models, technologies, and systems aligned
with circular economy principles, a Circular Economy Regulatory Sandbox Program
is hereby established.

The sandbox shall provide a controlled environment for eligible participants to
test circular solutions—such as sustainable packaging, waste-to-resource platforms,
reverse logistics, and modular product systems—under temporary regulatory
relaxations or exemptions.

The DTI and DEPDev shall issue the implementing guidelines for the sandbox
within six (6) months from the effectivity of the Implementing Rules and Regulations
(IRR), including:

(a) Application procedures and eligibility requirements;

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(b)

Criteria for sandbox participation, including environmental, economic,
or social benefit;

(©) Incentives for sandbox participants, which may include technical
assistance, regulatory exemptions, fiscal or non-fiscal support, or access
to pilot funding under the Circular Economy Implementation Fund
(CEIE);

(d) Mechanisms for periodic monitoring, reporting, and evaluation of
sandbox initiatives;

(@) Procedures for scaling and integrating successful sandbox outcomes
into formal policy or regulation; and

(8 A grievance and appeals mechanism for rejected or disqualified
applications.

Sandbox participation shall be granted for a period of up to two (2) years,
subject to periodic review. Participants must:

1. Demonstrate potential environmental, social, or economic benefit;
2. Submit monitoring data and implementation reports;
3. Comply with safety, health, and consumer protection laws.

Upon successful completion, sandbox innovations may be recommended for
wider adoption, supported by formal regulatory integration, incentives, or funding
under this Act or related programs.

Sec. 24. Phased Implementation. - The implementation of this Act shall be carried
out in phases, as shall be defined in the Implementing Rules and Regulations (IRR),
taking into account the readiness of sectors, availability and maturity of technologies,
institutional and administrative capacities, and the outcomes of circular economy
pilot programs, including those implemented under the regulatory sandbox
mechanism.

The phased implementation schedule in the IRR shall include clear milestones,
transition pathways, and indicative timelines for government agencies, LGUs,
business sectors, and other stakeholders, ensuring a just and practical transition
toward a circular economy.

The IRR may provide differentiated compliance periods for specific industries
or local government units, particularly those in resource-constrained, geographically

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isolated, or climate-vulnerable areas, provided that such differentiation shall not
prejudice the attainment of national targets under this Act.

All phases shall be aligned with the PAP4SCP, the National Circular Economy
Roadmap, the National Climate Change Action Plan, and the Philippine Development
Plan or its successor frameworks.

‘The phased implementation schedule shall include, among others, the five-year
transition to single-use plastic (SUP) phase-out as outlined in Section 9 of this Act.

Sec. 25. Circular Economy Incentive Code. - To support the transition to a circular
economy, the CE-IAC, in coordination with the DOF, DTI, and other concerned
agencies, shall develop a Circular Economy Incentive Code as part of the IRR of this
Act.

The Incentive Code shall identify and harmonize existing fiscal and non-fiscal
incentives under current laws, regulations, and programs, and provide guidelines for
their effective application to circular economy enterprises, LGUs, cooperatives,
startups, and innovators. It shall establish criteria for eligibility, priority sectors and
technologies, application procedures, and performance monitoring mechanisms. The
Incentive Code shall also include provisions for regular review, update, and
rationalization of incentive instruments to ensure continued relevance and impact.

The CE-IAC shall serve as the primary harmonization and evaluation body to
ensure that all incentive mechanisms under this Act are aligned with national
development goals, sustainable fiscal policies, and the key performance indicators
established under the CEMAF. The DOF, in coordination with the Board of
Investments (BOI), shall be responsible for the technical design, cost-benefit
assessment, and implementation of fiscal and non-fiscal incentives under the Circular
Economy Incentive Code. All incentive proposals shall be reviewed and endorsed by
the CE-IAC prior to approval to ensure policy coherence and alignment with circular
economy principles.

Sec. 26. Circular Innovation Hub, - To accelerate the development and adoption
of circular economy solutions, a Circular Innovation Hub shalll be established under
the DOST, in coordination with the DICT, DTI, and the DEPDev.

The Hub shall serve as a platform for supporting research, development, and
innovation in circular design, materials recovery, waste reduction technologies, and

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circular business models. It shall operate in partnership with higher education
institutions (HEIs), startups, MSMEs, and local governments.

The IRR shall define the structure, funding sources, and operational guidelines
of the Hub, including pilot programs, grant support, and collaborative research
initiatives.

Sec. 27. Repealing Clause. - All laws, decrees, executive orders, rules, and
regulations or parts thereof inconsistent with this Act are hereby repealed, amended,
or modified accordingly.

Sec. 28. Separability Clause. - If any provision of this Act is declared
unconstitutional, the rest shall remain valid and effective.

Sec. 29. Effectivity. - This Act shall take effect fifteen (15) days after full
publication in the Official Gazette or in two (2) newspapers of general circulation.

Approved,