How to start a junk shop business in the Philippines

A summary, not legal advice. Checked October 7, 2026.

To start a junk shop business in the Philippines, register the business name with DTI (or the SEC for a partnership or corporation), get a barangay clearance, a mayor's permit and BIR registration, and have your timbangan sealed by the city or municipal treasurer. A DTI starter guide puts minimum capital at ₱100,000, much of it for rent, scales and the cash you pay suppliers.

Where does a junkshop fit in the recycling chain?

A junkshop buys kalakal by the kilo from the people who collect it, sorts it, and sells it in bulk to someone bigger. The Iloilo study traced the chain. Households, shops and offices throw things out. Waste pickers, barangay eco-aides, private haulers and residents bring the recyclables to the junkshop. The junkshop weighs, agrees a price, pays cash, then sorts and bags the material. It sells to bigger junkshops and consolidators, the trading companies, which move it on to recyclers and plants.

The Iloilo shops sold to consolidators in Iloilo City and nearby towns such as Pavia, Santa Barbara, Leganes and Estancia, and as far away as Novaliches and Valenzuela in Metro Manila, Antique, Laguna, Cavite and Cebu. The study notes that Panay had no recycling plants, so the material left the island. How far your nearest trading company is decides your hauling cost, and hauling cost eats into your margin.

The materials are the familiar ones: paper (dyaryo, karton, white paper), plastics (PET bottles, HDPE, LDPE, PP), bote, ferrous metals (bakal, lata, yero), non-ferrous metals (aluminum, tanso, tansong dilaw) and e-waste including batteries. By weight, ferrous metals were the biggest share, at 608.26 metric tons a month across the shops studied.

What permits do you need to open a junkshop?

The national steps are the same as for any small business. They usually go in this order, because each office asks for the papers from the one before.

• Business name. A sole proprietor registers the business name with DTI through its online Business Name Registration System. The fee depends on scope: ₱200 for barangay, ₱500 for city or municipality, ₱1,000 for regional and ₱2,000 for national, plus ₱30 documentary stamp tax. The registration is valid for five years. A partnership or corporation registers with the SEC instead.
• Barangay clearance. Under Section 152(c) of the Local Government Code, no city or municipality may issue a business permit unless the barangay where the business sits has first issued a clearance. The barangay has 7 working days to act on it.
• Mayor's permit. Apply at your city or municipal business permit office or Business One Stop Shop. The Ease of Doing Business Act caps processing at 3 working days for simple applications and 7 for complex ones, and at 20 working days for activities that pose a danger to public health or safety. The same law ties the fire safety inspection certificate from the BFP to the permit, and the DTI junkshop guide lists a sanitary permit with the mayor's permit.
• BIR. Register with the Revenue District Office on or before the day you start the business. Under the Ease of Paying Taxes Act of 2024 you register once, and the BIR stopped collecting the ₱500 annual registration fee from January 22, 2024. The DTI guide lists the TIN, the authority to print receipts and invoices, and the registration of your books of accounts under this step.

Many cities add their own junkshop rules on top: police anti-fencing clearances, environment office clearances and record books. Our guide "Junkshop permit requirements and record books in the Philippines" covers the Anti-Fencing Law and those city ordinances in detail. Read it before you sign a lease.

Do you need an environmental permit?

We found no single national environmental permit that every small junkshop must hold. What you need depends on your city and on what you buy. Some cities send junkshops through their environment office before the mayor's permit (our permit guide names them), so ask the city or municipal environment office when you apply.

Batteries are the item to decide on early. Used lead-acid batteries from cars and motorcycles are hazardous waste under Republic Act No. 6969, the Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990, as GMA News reported in September 2024 when an industry group pushed for tighter rules against illegal lead smelters in San Simon, Valenzuela, Tarlac and Cavite. If you plan to buy batteries, ask the DENR Environmental Management Bureau regional office what registration you need before the first one comes in, or decide not to buy them.

How do you choose the yard and the scale?

In the Iloilo study, almost all shops ran on 50 to 1,000 square metres, about two in three rented their space, and 88% were built of light materials. The paper also points to Iloilo City's 2,000 square metre minimum lot area for junkshops, which most surveyed shops did not meet. Rules like that differ by city, so ask the business permit and zoning office about lot size before you sign anything. Owners in the study also reported material piling up outside the yard and flooding, so look for room to stack and good drainage.

The timbangan is the heart of the business. Shops in the study had one to three scales, from 10 kg up to 150 kg capacity, and the bigger ones wanted a 50-tonner truck scale and a forklift. The DTI starter guide lists a bascula (platform scale) and a 50 kg countertop or hanging scale as the basic set.

Have every scale sealed. Article 62 of the Consumer Act (Republic Act No. 7394) says weighing instruments used in consumer transactions must be tested, calibrated and sealed every six months by the official sealer, who is the provincial, city or municipal treasurer or a representative, on payment of the fees. Section 148 of the Local Government Code lets the local council set those fees. Using a scale that was never sealed, or whose seal has lapsed, is a prohibited act under Article 64, punished for a first offence by a fine of at least ₱500 or one month to five years in jail. Ask your treasurer's office how sealing works where you are.

How much capital do you need to start a junk shop?

DTI's starter guide for junkshops, printed in 2010, sets minimum starting capital at ₱100,000. The Iloilo study found real shops close to that: almost 81% started with ₱100,000 or less, and the rest with ₱100,001 to ₱250,000. An earlier Philippine study cited in the same paper found that 80% of 20 junkshops had invested less than ₱200,000. Costs have risen since 2010, so treat ₱100,000 as a floor, not a budget.

The DTI guide lists where the money goes:

• Business licenses and registrations.
• A refundable security deposit and advance rent equal to four months, if you rent.
• Equipment: a bascula, a 50 kg countertop or hanging scale, two metal push carts (cartilla), an acetylene torch and gas tank, a pulley, and hand tools such as a steel saw, pliers, vise grips, screwdrivers, a hammer and a baretta de cabra.
• Renovation if you lease the land, plus miscellaneous costs.
• A pick-up truck, which DTI marks as optional.
• A revolving fund for buying cash.
• Labor: a general manager, an officer-in-charge and a driver-helper at minimum wage, and two helpers who also act as checkers.

The revolving fund is the part new owners underestimate. You pay for every kilo on the spot, and you only get that money back when the trading company pays you.

How should you handle buying cash?

In the Iloilo study, sellers were paid in cash right after weighing and price talk. The DTI guide calls the daily float the Starting Purchasing Cash: a fixed amount the cashier counts each morning and tops up to the same level every working day. Its routine still works:

• The helper checks and sorts the load and puts it on the scale.
• The officer-in-charge weighs it, writes a weigh slip with the item and weight, and signs it.
• The cashier computes the amount, pays, and has the seller sign the slip as proof of payment.
• At closing, the cashier totals the day's slips in a purchase log, writes expenses in a separate log, and counts the cash. Starting cash minus purchases and expenses should match the cash on hand.
• Money from sales to trading companies goes straight to the business bank account, not into the drawer.

Example with made-up round numbers: you open with ₱30,000, buy ₱22,500 of kalakal and spend ₱500 on gasoline. The drawer should hold ₱7,000. If it holds ₱6,200, there is an ₱800 gap to explain before anyone goes home.

How big a float you need depends on your daily volume and on how fast your trading company pays. The DTI guide also mentions giving suki collectors small advances, up to a limit you set, to keep material coming in. Every advance is cash out of the drawer, so write each one down.

How do you find suppliers and a trading company?

The Iloilo shops bought from households, waste pickers, barangay eco-aides and private haulers. The DTI guide adds businesses with by-products to sell, and suggests lending wooden pushcarts (kariton) to collectors who agree to sell to you first.

For selling, the DTI guide advises looking for several buyers rather than one, and asking for a price locked in for a month on specific items. Agree in advance on payment terms, the pickup or delivery schedule and volume, and who pays for hauling, because that cost changes the real price. If a broker or agent stands between you and the buyer, agree that payment goes directly to you.

Expect prices to move. The Iloilo paper says prices go up and down with what recyclers pay and their processing costs, so ask more than one buyer before you set your own buying prices, and check again every week.

What records should you keep from day one?

Keep a weigh slip or ticket for every purchase with the supplier, material, weight and price per kilo, a daily purchase log, an expense log, a daily cash count, and a record of every delivery showing your weight and the weight the trading company accepted. The BIR expects registered books of accounts on top of that. Records also protect you: under Section 5 of the Anti-Fencing Law, mere possession of stolen goods is prima facie evidence of fencing, so you want to know who sold you each load. City record book rules are in our permit guide.

If you would rather keep those records on a phone than on paper, ScrapTrack, our junkshop system, records each purchase at the scale as a numbered ticket with the supplier, material, weight (entered directly, as gross minus tare, or over several weighings) and price per kilo, and the payment by cash, GCash, Maya, bank transfer or check. It keeps stock in kilos and pesos per material, runs the daily cash drawer from opening fund to closing count, and compares your delivery weight with the weight the trading company accepted. It runs in the browser on a budget Android phone. It does not file reports with the police or city hall, has no seller ID field yet, and cannot tell you whether your city accepts digital records. A demo is available.

Sources

• Romallosa, Penetrante and Ravena, Junkshops as Recycling Chain Actors in the Recovery of Waste Resources from a Highly Urbanized City in the Philippines, Applied Environmental Research, Vol. 46 No. 3 (2024), article page and full-text PDF on ThaiJO (ph01.tci-thaijo.org). Checked October 7, 2026.
• Featured paper of the week on the same study, Central Philippine University (cpu.edu.ph). Checked October 7, 2026.
• Starting a Business: Junkshop and Scrap Business, Department of Trade and Industry, Bureau of Micro, Small and Medium Enterprise Development, printed September 2010 (dti.gov.ph). Checked October 7, 2026.
• Business Name Registration System FAQ, Department of Trade and Industry (bnrs.dti.gov.ph). Checked October 7, 2026.
• Republic Act No. 7160, the Local Government Code of 1991, Sections 148, 151 and 152, on Lawphil (lawphil.net). Checked October 7, 2026.
• Republic Act No. 11032, the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, on Lawphil (lawphil.net). Checked October 7, 2026.
• Republic Act No. 11976, the Ease of Paying Taxes Act, Section 34, on Lawphil (lawphil.net). Checked October 7, 2026.
• BIR waives annual registration fee for business taxpayers, BusinessWorld, January 10, 2024, republished on Metrobank Wealth Insights (wealthinsights.metrobank.com.ph). Checked October 7, 2026.
• Republic Act No. 7394, the Consumer Act of the Philippines, Articles 61, 62, 64 and 65, on Lawphil (lawphil.net). Checked October 7, 2026.
• Presidential Decree No. 1612, the Anti-Fencing Law, Section 5, on Lawphil (lawphil.net). Checked October 7, 2026.
• GMA News report on used lead-acid batteries and the Federation of Philippine Industries, September 12, 2024 (gmanetwork.com). Checked October 7, 2026.