StartupBlink has launched the Startup Ecosystem Ranking Report 2019 that now ranks 1,000 cities and 100 countries worldwide and is available for download here.
While still catching up with its ASEAN neighbors in terms of startup
ecosystem development, the Philippines shows great promise
through its steadfast growth.
The Philippines is known for its vibrant business process outsourcing (BPO) sector and the strong remittances it receives from overseas Filipino workers, both of which contribute to the country’s rapidly developing economy with a growth rate of 6%, one of the highest in the world.
Its population is unique as it is made up of a highly tech-enabled and tech-savvy, English-speaking population, making it a natural gateway to the Southeast Asian market. And micro, small, and medium enterprises (MSMEs) account for 70% of total employment, with millennials venturing into entrepreneurship at an increased rate.
In 2015, there were only 100 reported active startups in the Philippines with a total of US$40 million in funding and investment. Majority of those startups were still in the early development stages and there were very few exits. Three years later, there were over 300 active startups reported in 2018 that have raised a total deal value of US$304 million.
Majority of these startups are concentrated within Metro Manila, the national capital region of the country, but there are also budding startup communities in Cebu City and Davao City.
Information & Communications Technology is the top industry for startups in terms of deal flow (US$107.5 million), but there is a huge opportunity for fintech startups as only 30% of Filipinos have bank accounts. There are around 100 fintech startups concentrated within Metro Manila that focus on mobile payments and alternative finances. Many are also integrating blockchain into their platforms.
Both Government investment and central bank policies are putting the systems in place to encourage the growth and development of small and medium enterprises (SMEs) including the P3 program, Kapatid Mentor Me Program, Go Lokal Program, SME Roving Academy, Shared Services Facilities, Go Negosyo Act, Slingshot Philippines, and QBO Innovation Hub. These initiatives are meant to encourage startup entrepreneurship by increasing local and international collaboration, addressing barriers to growth, and supporting existing startups.
One of the biggest challenges for the Philippines as a whole is the general lack of awareness on startup entrepreneurship. Many Filipinos can’t differentiate between a startup and a traditional SME, and also maintain a conservative mindset when it comes to entrepreneurship, avoiding risk and making big, forward-thinking decisions.
But all the elements are in place for the Philippine to succeed. Thanks to the talented population, the positive business climate, and the various opportunities this unique environment possesses, there is a positive outlook for the Philippine startup ecosystem.
Written by QBO Innovation Hub.