To combat plastic pollution, the Philippines imposes fees on companies.

The Philippines now requires large companies to take financial and operational responsibility for the plastic waste their products generate, a policy shift that makes it the first country in Southeast Asia to impose penalties on businesses over plastic pollution. Under the Extended Producer Responsibility (EPR) Act of 2022, obliged enterprises must recover or offset a rising share of their plastic packaging footprint each year, with fines reaching up to PHP 20 million for non-compliance. This means that for the first time, the cost of managing plastic waste is being shifted from local governments and taxpayers back to the producers who design and distribute the packaging.

56%
National plastic waste diversion rate in 2025
Tribune.net.ph

246M+ kg
Plastic waste diverted by EPR entities in 2025
Tribune.net.ph

1,017
Entities registered with EPR programs as of Jan 2026
Tribune.net.ph

80%
Mandatory recovery target by 2028 and beyond
Keslio.com

The Department of Environment and Natural Resources (DENR) reported that the country exceeded its 40 percent target for 2025, registering a national diversion rate of 56 percent last year. More than 246 million kilograms of plastic waste had been diverted by 1,017 entities that registered their EPR programs as of January 2026. That figure represents actual waste collected, recycled, upcycled, or co-processed — not just pledges. The Philippines generates roughly 1.7 million metric tons of post-consumer plastic waste annually, according to the World Bank, with about a third ending up in landfills and 35 percent discarded on open land. The EPR law is designed to reverse that trajectory by making the companies that produce plastic packaging pay for its end-of-life management. For a deeper look at how plastic waste disproportionately affects low-income communities, read our analysis of the Philippine pollution crisis and inequity.

How the EPR law shifts responsibility to producers

🏭
Who Must Comply
Large enterprises with total assets exceeding PHP 100 million (excluding land) that generate plastic packaging waste must register an EPR program with the EMB.

📦
What Is Covered
Flexible and rigid plastic packaging, plastic bags, polystyrene, sachets, labels, laminates, caps, and lids — including multi-layer packaging that is commercially difficult to recycle.

📈
Rising Recovery Targets
Companies must recover or offset 50% of their 2025 plastic footprint, 60% for 2026, 70% for 2027, and 80% from 2028 onward — calculated by weight of plastic packaging placed in the market.

The core idea behind the EPR Act (Republic Act No. 11898) is straightforward: companies that design, manufacture, and distribute plastic packaging should bear the cost of managing the waste it becomes. Before this law, local government units shouldered most of the burden of collecting and disposing of plastic waste, even though they had no control over how products were packaged. The law requires obliged enterprises to establish EPR programs that cover the full lifecycle of their plastic packaging, from design to recovery. A large enterprise under the law generally means a business whose total assets exceed the medium-enterprise threshold under the MSME framework, commonly referenced as assets above PHP 100 million, excluding land. The law does not ban any plastics, including single-use sachets, but it forces companies to account for every kilogram they put into the market.

Extended Producer Responsibility (EPR)
A policy approach that makes producers financially and operationally responsible for the post-consumer management of their products and packaging, shifting the burden away from local governments and taxpayers.

What the 2025 compliance data reveals about implementation

The 56 percent diversion rate for 2025 exceeded the statutory target of 40 percent, but the numbers tell a more complicated story than a simple success headline. Of the plastic waste recycled, upcycled, and co-processed in 2025, more than 56 percent were flexible plastics and over 55 percent were rigid plastics, according to the DENR. That distinction matters because flexible plastics — including sachets, pouches, and multi-layer packaging — are commercially unviable for traditional recycling and often end up being burned for energy in a process called co-processing, where the ash is used in cement production. The law allows this as a compliance method, but environmental groups have raised concerns that co-processing does not truly eliminate plastic waste and may release harmful emissions.

Quick Note
Co-processing explained
Co-processing involves burning plastic waste at high temperatures in cement kilns and using the resulting ash as a raw material for cement. While it reduces the volume of waste sent to landfills, critics argue it is not true recycling and may produce toxic emissions. The EPR law currently counts co-processing toward recovery targets.

Around half of the eligible companies under the law have launched EPR programs so far, meaning over a thousand more must do so or face penalties. The law removed 486,000 tonnes of plastic waste from the environment in 2023, according to Environment Undersecretary Jonas Leones, which topped the first-year target. But the real test will come as the recovery obligations ratchet up from 50 percent in 2025 to 80 percent by 2028. Each step requires companies to either collect more waste or invest in alternative packaging materials, and the infrastructure for both remains limited in many parts of the country. For more context on how the government is pushing companies to fund waste management, see our article on how the Philippines urges companies to fund plastic waste management.

What gets overlooked in the EPR framework

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Source: Keslio EPR Law Guide
Compliance YearRecovery TargetPenalty for Non-Compliance (First Offense)Penalty for Missing Target
202320%PHP 5M–10MFine or 2x cost of shortfall
202440%PHP 10M–15MFine or 2x cost of shortfall
202550%PHP 15M–20MFine or 2x cost of shortfall
202660%PHP 15M–20M + permit suspensionFine or 2x cost of shortfall
202770%PHP 15M–20M + permit suspensionFine or 2x cost of shortfall
2028+80%PHP 15M–20M + permit suspensionFine or 2x cost of shortfall

The plastic credits loophole and what it means for real waste reduction

The law allows companies to outsource their obligations to producer responsibility organisations (PROs), many of which use a mechanism called plastic credits. These credits let a company buy a certificate verifying that a metric ton of plastic has been removed from the environment and either recycled, upcycled, or co-processed. PCX Solutions, one of the country’s largest PROs, offers local credits priced from around US$100 for collection and co-processing of mixed plastics to over US$500 for collection and recycling of ocean-bound PET plastic. While PCX credits cannot be claimed against plastic that is landfilled, they do allow for waste to be burned. This creates a situation where a company can meet its legal obligation without actually reducing the amount of plastic packaging it produces — a distinction that critics say undermines the law’s intent to drive upstream design changes.

Why flexible plastics remain a structural challenge

The law covers flexible plastics including sachets, labels, laminates, and multi-layer packaging, which are among the most common packaging formats in the Philippines due to their low cost and convenience for low-income consumers. But these materials are extremely difficult to recycle because they consist of multiple layers of different plastics and aluminium fused together. Most recycling facilities cannot process them, which is why co-processing has become the default recovery method. The law does not require companies to phase out these hard-to-recycle formats, only to recover a percentage of them. That means a company could theoretically continue producing millions of sachets each year as long as it pays for an equivalent amount to be collected and burned. For a broader look at the country’s waste crisis, read our piece on the Philippines’ plastic waste crisis.

The gap between registered entities and active programs

As of January 2026, 1,017 entities had registered their EPR programs with the EMB, but the DENR has acknowledged that not all registered companies are fully operational. Some have submitted program plans without implementing actual collection or recovery activities. The DENR has identified priority areas for 2026, including improvements in digital monitoring systems, capacity-building within institutions, and the standardization of audit frameworks to enhance transparency. Without robust verification, there is a risk that reported diversion figures overstate actual environmental impact. The law requires independent third-party audits of compliance reports, but the quality and consistency of these audits vary.

What companies need to do to comply with the EPR law

Register your EPR program with the EMB

Every obliged enterprise must register its EPR program with the Environmental Management Bureau. The registration process requires submitting a program plan that details how the company will recover or offset its plastic packaging footprint, including collection methods, partner organisations, and timeline. Companies that fail to register face fines of PHP 5 million to PHP 10 million for a first offense, escalating to PHP 15 million to PHP 20 million and automatic suspension of business permits for a third offense. The registration must be renewed annually and updated whenever the program changes significantly.

Calculate your plastic packaging footprint accurately

The recovery target is calculated based on the weight of plastic packaging a company puts into the market. This includes all covered plastic types: flexible and rigid packaging, plastic bags, polystyrene, sachets, labels, laminates, and multi-layer packaging. Companies need to establish a measurement system that tracks the weight of each packaging type they distribute, which often requires coordination with suppliers and manufacturers. The footprint calculation forms the baseline for determining how much waste must be recovered each year. Underestimating the footprint can lead to non-compliance if the recovery target is not met.

Choose between direct recovery and plastic credits

Companies have two main compliance pathways. They can set up their own collection and recycling programs, partnering with local governments, waste pickers, or recycling facilities. Alternatively, they can purchase plastic credits from accredited PROs like PCX Solutions. The choice involves trade-offs: direct recovery gives companies more control over where and how waste is managed but requires significant operational investment, while plastic credits are simpler to administer but may not result in actual reductions in plastic production. Companies should evaluate which approach aligns with their long-term sustainability goals and budget, keeping in mind that the cost of credits varies by plastic type and recovery method.

Submit audited compliance reports annually

RA 11898 requires obliged enterprises to submit annual compliance reports certified by an independent third-party auditor. The auditor must verify the accuracy of the reported plastic product footprint, recovery data, and overall EPR program compliance. DENR Administrative Order No. 2024-04 introduced specific compliance reporting and audit guidelines. Companies should engage an accredited auditor early in the process to ensure their data collection systems meet audit requirements. Late or inaccurate submissions can trigger penalties even if the recovery target was met. For practical solutions to plastic waste management, explore our guide on fighting plastic pollution in the Philippines.

Frequently asked questions about the EPR law

Does the EPR law apply to small businesses?
No, the law currently applies only to large enterprises with total assets exceeding PHP 100 million (excluding land). Micro, small, and medium enterprises are not required to comply, though they may voluntarily register EPR programs.
What happens if a company misses the recovery target but still registers a program?
The penalty can be the statutory fine or twice the cost of recovery and diversion of the plastic footprint shortfall, whichever is higher. Simply having a registered program does not shield a company from penalties for missing the target.
Can companies use plastic credits from other countries?
The law requires that recovery and offset activities occur within the Philippines. International plastic credits generally do not count toward compliance unless the waste is collected and processed locally through an accredited PRO.
Does co-processing count as recycling under the law?
Yes, co-processing is counted toward recovery targets alongside recycling and upcycling. However, it is not considered true recycling by many environmental advocates because the plastic is burned rather than converted back into usable material.
Are single-use plastic sachets banned under the EPR law?
No, the law does not ban any plastics, including single-use sachets. It only requires companies to recover or offset a percentage of the plastic packaging they produce. Sachets remain legal but must be accounted for in the company’s plastic footprint.
How does the DENR verify that reported diversion figures are accurate?
The law requires independent third-party audits of all compliance reports. The DENR is also working on standardizing audit frameworks and improving digital monitoring systems to enhance transparency and verification.

What to watch for as the EPR law matures

The EPR law represents a significant shift in how the Philippines manages plastic waste, but its effectiveness will depend on enforcement, verification, and whether companies use the flexibility in the system to genuinely reduce plastic use or simply pay for offsets. The 2025 data shows that the law can drive measurable waste recovery, but the rising targets — 60 percent for 2026, 70 percent for 2027, and 80 percent from 2028 — will test whether the current infrastructure and compliance model can scale. Companies that invest in redesigning packaging to use less plastic or more recyclable materials will be better positioned than those that rely entirely on credits and co-processing. If this was useful, you might also want to read how water pollution connects to the broader environmental challenges facing the Philippines.

Sources

Fighting marine pollution to save the Coral Triangle — Explores how plastic waste from land-based sources damages marine ecosystems and what conservation efforts are underway.

Toxic chemicals and foul water in the Philippines — Examines how industrial and household waste, including plastics, contaminates water sources and affects public health.

DENR cites EPR partners as plastic waste recovery hits 56%. Daily Tribune, 2026.

A Guide to the Extended Producer Responsibility (EPR) Law in the Philippines. Keslio, 2025.

To tackle plastic scourge, Philippines makes companies pay. The Straits Times, 2024.

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Thim

Just a regular Filipino who started sharing stories, tips, and insights—now it’s grown into something bigger. RichestPH is my way of giving back by creating free content that helps fellow Pinoys make better choices around money, health, and lifestyle. No fluff, just honest content to help you live smarter and feel more in control.

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