Absorbent polymers allow the soil to retain a substantial amount of moisture. This property plays a vital role in producing banana plantlets to mitigate the adverse condition of the climate. This study determined the effect of absorbent polymers in improving moisture retention in the soil and on the growth response of ‘lakatan’ banana plantlets under nursery conditions. Three factors were used in determining the effect: irrigation amount, irrigation frequency, and amount of polymer. The data was analyzed using Analysis of Variance (ANOVA) with a 3x3x2 factorial experiment in split-split plot design arranged in Randomized Complete Block Design (RCBD). The results of the study indicated that the interaction of the three factors had a significant effect on the morphological characteristics of the banana plantlets. The irrigation frequency and the amount of polymer significantly affected the average plant height and leaf area increment of the banana plantlets. However, the girth size was only affected by the amount of irrigation and polymer. Moisture retention was observed in the soils treated with the absorbent polymer. Partial budget analysis revealed that a benefit-cost ratio of 2.33 was obtained using twice a week irrigation frequency with a 15 mm volume of application.