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PHL loses up to $890M a year due to plastics recycling ‘failure’ — WB

THE PHILIPPINES recycled about 28% of the key plastics resins in 2019, a World Bank study showed. — THE PHILIPPINE STAR/ EDD GUMBAN

By Angelica Y. Yang

THE PHILIPPINE economy is losing up to $890 million a year due to what is described as a “market failure” in plastic waste recycling efforts, a new World Bank Group (WB) country study showed.

“Only 22% of the total material value of plastics ($246 million/year) is currently unlocked. This results in $790-890 million/year of potential material value that is lost to the Philippine economy,” the World Bank Group said in “Market Study for the Philippines: Plastics Circularity Opportunities and Barriers” released on Tuesday.

The total material value which could be unlocked from plastics recycling amounted to $1.1 billion, assuming that four of the country’s key plastics resins had 100% collected-for-recycling (CFR) rates and were sold for maximum value in the market, the World Bank said.

The four key plastics resins in the Philippines are Polyethylene Terephthalate (PET), High-Density Polyethylene (HDPE), Low-Density Polyethylene or Linear Low-Density Polyethylene (LDPE/LLDPE) and Polypropylene (PP). They accounted for up to 93% of all the plastics resins used by Filipinos in 2015.

The World Bank said the annual material value loss of $790-$890 million is the result of “various structural challenges which affected CFR rates and value yields for the four key resins.”

The World Bank cited six challenges which prevented the Philippines from maximizing the value of plastic waste. These include high logistics costs, expensive electricity bills, and the presence of low-value and hard-to-recycle packaging, which makes up 61% of the plastic packaging units in the market.

The Philippines also faced intense competition from the informal recycling industry, low tipping fees which discourage local governments from investing in waste management solutions, and small and medium enterprises who dominated the recycling industry but cannot capitalize on the growing demand for recycled resins.

In 2019, the Philippines recycled only 28% of its key plastics resins, the report showed.

The World Bank recommended six interventions, which called for an increase in waste collection and sorting of plastics, a national design for recycling standards, and the creation of industry-specific requirements in ramping up waste collection and recycling rates, among others.

In a separate press release on Tuesday, the World Bank Group said that the Philippines, Malaysia and Thailand are losing a total of $6 billion a year due to un-recycled plastic waste, based on the group’s series of country studies.

“More than 75% of the material value of the plastics is lost — the equivalent of $6 billion per year across the three countries — when single-use plastics are discarded rather than recovered and recycled, representing a significant untapped business opportunity if key market barriers can be addressed,” the multilateral lender said.

The World Bank noted that less than a quarter of plastics were available for recycling in Malaysia, Thailand and the Philippines.

World Bank Country Director for Brunei, Malaysia, the Philippines and Thailand Ndiamé Diop said that the issue of mismanaged plastics in the three countries is threatening the tourism and fisheries sectors.

“But there is strong government momentum in these countries to identify critical policies, and craft roadmaps to strengthen demand for all recycled plastics resins, level the playing field for global and domestic companies, and help drive a circular economy for plastics,” he was quoted as saying.

GA Circular, a research and strategy firm that specializes in waste management and recycling, conducted the three country studies. The GA Circular researchers consulted with workers across the plastics value chain to develop baseline data, and undertook analyses to quantify the untapped market potential for each resin.

The Korea Green Growth Trust Fund, a partnership between the World Bank Group and Republic of Korea, provided the funding for the Philippine study. Meanwhile, umbrella multi-donor trust fund PROBLUE, which is housed at the World Bank, funded the Thailand and Malaysia studies.

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