Philippines among the top 100 startup ecosystems worldwide, with notable strengths in transportation, education technology, and health technology.
Philippines Startup ecosystem 2024
The Philippines is an archipelago of over 7,100 islands in Southeast Asia, located in the western Pacific Ocean. With a population of 117.3 million people, it ranks 6th in Southeast Asia and 60th globally. In the 2023 Global Innovation Index, the Philippines is ranked 56th out of 132 economies. The country is also among the top 100 startup ecosystems worldwide, with notable strengths in transportation, education technology, and health technology.
The startup scene in the Philippines is quickly gaining momentum. The rapid growth of the Philippine startup ecosystem is promising for both new businesses and investors. There are huge opportunities for innovation and entrepreneurship in the country. The Philippines is becoming a vibrant center for tech companies. Its strategic position in Southeast Asia, along with a skilled and cost-effective workforce, provides access to a large regional market and serves as a gateway to neighboring economies.
According to the 2024 Global Startup Ecosystem Report, the value of the country’s tech startups will double from $3.5 billion last year to $6.4 billion this year. With a rapidly growing population and a government that supports foreign investment through effective policies, the Philippines offers a large potential customer base for businesses. The country is moving towards becoming a strong startup ecosystem in the Asia Pacific region. It benefits from a skilled English-speaking population. Its appeal to foreign entrepreneurs and digital nomads, as well as the experience local remote workers get from working with global startups.
The Philippines supports tech startups through two significant laws: the Philippine Innovation Act and the Innovative Startup Act, both enacted in 2019. These laws aim to drive technological innovation and foster economic growth and sustainable development.
Three main government departments support the startup community: the Department of Science and Technology (DOST), the Department of Trade and Industry (DTI), and the Department of Information and Communications Technology (DICT). Each department offers various programs and initiatives to aid startups.
Several government programs are available to assist entrepreneurs. These include the QBO Innovation Hub and the P3 Program. KMC, the largest co-working space provider in the country, along with various startup incubation programs, contributes to the development of local startup ecosystems.
The government is working on regulatory measures through the Innovative Startup Act to support early-stage startups. This act introduces new types of visas to attract entrepreneurs, investors, and startup employees. Additionally, an amendment to the Foreign Investment Act seeks to encourage global small and medium-sized enterprises to establish fully-owned businesses in the country.
The DICT provides grants to early-stage startups and leads the Digital Cities Program. This initiative evaluates and promotes the startup environment in cities outside Metro Manila to strengthen local innovation ecosystems and support homegrown startups.
The Philippines has over 8,700 startups, with three achieving Unicorn status. The latest Unicorn is Voyager Innovations. From January to June 2024, the Board of Investments (BOI) in the Philippines approved investments totaling PHP 950 billion (USD 16.7 billion). This figure includes PHP 286 billion (USD 5 billion) from foreign investments, marking the highest first-semester BOI approvals in its 57-year history.
Conclusion
Despite the progress, the Philippines’ startup ecosystem continues to face several challenges, including limited infrastructure and slow regulatory support, which hinder economic growth. To tackle these issues, it is recommended to appoint startup advocates in the National Innovation Council, which comprises key government officials, and closely monitor the Innovative Startup Act and the Philippine Innovation Act. It is important to maintain high standards for incubators and advanced-stage startup accelerator programs. Additionally, it is important to encourage students to pursue STEM studies and integrate STEM elements into agricultural courses in senior high schools and vocational institutions. As the Philippines continues to grow at a strong pace among ASEAN countries, focusing on effective decision-making for startups will be crucial for future growth.
FAQs
Q1. What is the Philippines startup ecosystem ranked?
In 2024, the Philippine startup ecosystem ranks 60th out of 100 countries in the Startup Ecosystem Index.
Q2. What are the startup sectors in the Philippines?
The country’s startup scene is particularly strong in Transportation, Edtech, and Healthtech sectors.
Q3. Is Philippines a fast growing economy?
The Philippines is the fastest-growing economy in the ASEAN region, with a 5.6 percent growth rate in 2023, supported by positive assessments from multilateral organizations
