Economic Analysis of Establishing a Barangay-Level Materials Recovery Facility in Los Baños, Laguna, Philippines

Date

5-2025

Degree

Bachelor of Science in Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jaimie Kim B. Arias

Committee Member

Rowena A. Dorado, Gideon P. Carnaje, Maria Angeles O. Catelo

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Abstract

The increasing volume of solid waste in the Philippines is largely driven by rapid economic growth. In response, Republic Act No. 9003 was enacted to provide a policy framework for addressing this issue, with one of its key provisions being the establishment of Materials Recovery Facilities (MRFs) to promote waste diversion and reduction.

This study conducted an economic evaluation of a barangay-level MRF using Benefit- Cost Analysis (BCA), which assessed all associated costs and potential benefits over a 15-year project lifespan. To ensure a more comprehensive analysis, the environmental benefits of waste diversion were also estimated through the Benefit-Transfer (BT) method.

Contrary to common assumptions, the results indicate that establishing an MRF is economically viable, as it yields positive net social benefits. However, the study also found that sustaining MRF operations is not financially profitable due to limited revenue from recyclable sales, which are insufficient to cover operational and capital expenses. Thus, to ensure long-term viability, it is essential to implement financial support mechanisms— such as government subsidies, grants, or public-private partnerships—that can alleviate the financial burden on barangays. Without such support, MRFs may struggle to operate sustainably, despite their significant potential to improve environmental outcomes and contribute to broader societal welfare.

Language

English

LC Subject

Refuse and refuse disposal--Philippines, Cost effectiveness

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2025 E2 D36

Notes

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Document Type

Thesis

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