BUSINESSES in the Philippines, particularly micro, small, and medium enterprises (MSMEs), will join a regional pilot of a self-assessment tool designed to help them strengthen sustainability practices, improve operating efficiency, and prepare for tougher market expectations on responsible business.
The East Asia Business Council (EABC) said Philippine MSMEs will take part in the pilot use of the Circular Business Check, along with businesses in Indonesia and Thailand, ahead of a broader regional rollout in September.
The tool is designed to help small business owners assess how ready they are to adopt circular economy practices, measure the maturity of existing initiatives, and receive recommendations on practical next steps.
EABC Chairman Jay Yuvallos said 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 on environmental, social, and governance performance,” Yuvallos said.
The Circular Business Check is supported by the European Union’s SWITCH-Asia Programme.
The initiative forms part of the East Asia Circularity Agenda discussed during the 66th EABC meeting in Tokyo in May. The agenda includes the development of the East Asia Circularity Roadmap 2030, the Green Business Diagnostics Toolkit, and regional training programs on circular economy, resource efficiency, waste-to-value solutions, and ESG compliance for MSMEs.
In May, Yuvallos signed a strategic cooperation charter to advance circular economy and responsible business practices across the region with ASEAN Circular Economy Business Alliance President Thomas Thomas and Muhammad Firdaus Abdullah, chairperson of ARAIBA Sdn. Bhd.
The regional effort reflects growing pressure on small enterprises to comply with sustainability requirements increasingly embedded in financing, supply chains, export markets, and consumer preferences.
MSME BACKBONE
John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies, said the tool could help local enterprises improve profitability by lowering costs, reducing waste, and making better use of energy and raw materials.
Rivera said circularity could also open new revenue opportunities through reuse, recycling, and sustainable product offerings.
“They may gain better access to financing, stronger supply chain resilience, and improved competitiveness as consumers and export markets increasingly favor sustainable practices,” Rivera said.
The pilot comes as MSMEs remain a dominant force in the Philippine economy, accounting for 99.6 percent of all business establishments and 67 percent of total employment in 2023, according to data cited by the BSP Research Academy.
The same BSP presentation said MSMEs contribute an estimated 40 percent of the country’s gross domestic product and 25 percent of total export revenue, underscoring their role in job creation, domestic demand, export activity, and inclusive growth.
GROWTH PRESSURES
But the sector remains exposed to persistent operating challenges, with firms citing talent retention, utility costs, labor costs, road congestion, permit delays, access to finance, productivity, digital transformation, and market access among the key constraints to business growth.
For smaller enterprises, circular business practices could help address some of these pressures by improving resource efficiency, reducing input waste, cutting avoidable operating costs, and helping owners make better pricing, investment, and financing decisions.
The BSP presentation also noted that understanding economic indicators such as inflation, interest rates, exchange rates, labor conditions, and GDP growth can help MSMEs anticipate market conditions, manage risks, and plan for sustainable growth.
Industry groups said the pilot could give MSMEs a practical entry point into sustainability by translating broad ESG goals into concrete steps suited to smaller firms with limited capital, technical capacity, and manpower.
