Philippines

Manila

MEMBERS:
Department of Trade and Industry

Despite setbacks due to Covid-19, startups remain a catalyst for innovation. Leveraging on our strengths, the Philippines will continue supporting startups by reducing barriers to entrepreneurship, providing the right conditions, and boosting their entrepreneurial potential.

Undersecretary Rafaelita M. Aldaba
Competitiveness and Innovation Group, Department of Trade and Industry
Top 10 Asian Ecosystem: Affordable Talent
Top 20 Global Ecosystem: Affordable Talent
Top 30 Asian Ecosystem: Performance

Highlights

The Philippine startup ecosystem is rapidly developing with stronger government support particularly in high-growth services, such as AI, Big Data, and fintech, among others. Enabling policies such as the Philippine Innovation Act and the Innovative Startup Act aim to boost the country’s innovation and entrepreneurship ecosystem through harmonized government support measures and policy reforms. These laws are consistent with the country’s science and technology-based industrial policy, Inclusive Innovation Industrial Strategy (i3S), which aims to nurture innovative startups, especially those that can introduce new ideas, products, processes, and business models using Industry 4.0 technologies, like AI. In May 2021, the Department of Trade and Industry (DTI) launched the National AI Strategy Roadmap to position the Philippines as an AI center of excellence, a big data processing and analytics hub providing high-value services to the world. It will focus on building robust digital connectivity and data infrastructure, nurturing STEM-related professions, institutionalizing AI-related regulations, cybersecurity measures, and accelerating investments in AI R&D. Through a National Center for AI Research, the country aims to grow more AI startups by providing specialized incubation and commercialization support, fiscal incentives, linkages to multinational corporations, and targeted R&D grants. The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act has enhanced the country’s attractiveness for investments by making its incentives more competitive and innovation focused. Under CREATE, the highest level of incentives (up to 17 years of combined Income Tax Holiday and Special Corporate Income Tax/Enhanced Deductions) will be provided to support innovative economy-stimulating activities.

Ecosystem by the numbers

TOTAL EARLY STAGE FUNDING
$101 m
GLOBAL AVG.
$548 m
ECOSYSTEM VALUE
$584 m
GLOBAL AVG.
$13.68 bn
MEDIAN SEED ROUND
$217 k
GLOBAL AVG.
$480 k
MEDIAN SERIES A ROUND
$5 m
GLOBAL AVG.
$3 m
SOFT. ENGINEER SALARY
$8.6 k
GLOBAL AVG.
$44 k

Sub-sector Strengths

Fintech

The fast-growing use of mobile banking, an enabling regulatory environment, and a high number of unbanked and underserved Filipinos allowed more fintech startups to prosper in the Philippines. Amidst the pandemic, several local fintech startups managed to increase volume of transactions and raised funding for expansion. PayMongo secured USD 12 million in a Series A financing round. Squidpay secured USD 2 million in Series A. NextPay has raised $1.6 million (around P80.6 million) in a seed round of funding.

E-commerce

The acceleration of digital transformation paved the way for the growth of E-commerce in the Philippines. The country’s revenue in e-commerce is estimated at over USD 5 million in 2021, with market volume projected to reach USD 8.8 million by 2025. Taking advantage of this momentum, the DTI launched the eCommerce Philippines 2022 Roadmap in January 2021, providing strategic direction to accelerate the sub-sector’s growth. Great Deals E-Commerce, riding on the opportunity, raised a total of $41.3 million in funding.

Reasons to move your startup to Manila

Government Support

DTI, the Department of Information and Communications Technology (DICT), and the Department of Science and Technology (DOST) are implementing the Innovative Startup Act, to create a startup one-stop-shop, startup central portal, and startup ecozones. The law also established the Philippine Startup Development Program, to provide benefits such as grants, subsidies, visa support, and equity financing to eligible and qualified startups and startup enablers.

Startup Funds

A Startup Grant Fund (SGF) has been created by DTI, DICT, and DOST to provide grants-in-aid for startups to overcome R&D roadblocks and to strengthen their IP. DTI is also administering a Startup Venture Fund (SVF) with the National Development Company (NDC), matching private sector investments and providing equity funding to support startups’ establishment and expansion in key areas.

Startup Community

Startup Genome
Members

Startup Genome
Partners

Department of Science and Technology
Department of Information and Communications Technology
Intellectual Property Office of the Philippines
Small Business Corporation
National Development Company
Philippine Exporters Confederation, Inc.
QBO Innovation Hub
AIM-Dado Banatao Incubator
IdeaSpace Foundation
StartUp Village
Launchgarage
Brainsparks
Philippine Fintech Association
Fintech Alliance of the Philippines

Featured Articles from
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Katrina Chan
Innovation Hub Director at QBO Philippines
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