Kaya Founders, a venture capital firm that invests in early-stage startups across Southeast Asia, has released “The Philippine Fintech Stack,” a research report identifying the structural constraints currently limiting the country’s financial services growth. While the Philippines has seen rapid digital adoption – with over 70 million e-money accounts and annual remittances nearing $40 billion – the report argues that the ecosystem is “over-distributed and under-infrastructured.”
The study explores why several market friction points persist in 2026, such as the continued use of post-dated checks, high interest rates for MSMEs despite a surge in lenders, and the requirement for repeated KYC processes. According to the findings, while consumer-facing applications have scaled quickly, the shared “rails” beneath them – including identity, banking, and credit data frameworks – remain fragmented. This lack of coordination results in high onboarding costs and limited underwriting visibility.
“The Philippines has proven demand,” the report notes. “What will determine whether growth compounds or plateaus is infrastructure efficiency—lower onboarding costs, better underwriting visibility, cheaper settlement, and interoperable data standards.”
Drawing comparisons to India’s successful fintech stack, the report proposes a practical sequence for reform. In the short term, the focus centers on establishing portable identity and connected credit data to reduce fraud. This is intended to lead into medium-term improvements in payment rail efficiency to lower merchant costs, and eventually, a long-term goal of building consent-based data-sharing layers for dynamic risk management.
Connor Wen, the author of the report and a collaborator with Kaya Founders, emphasizes that the current challenge is not a lack of innovation at the app level, but a need for coordination at the foundational level. “Digital finance in the Philippines has reached meaningful scale. The constraint now is not innovation at the app layer, but coordination at the infrastructure layer. Where identity is portable, payments are cheap, and data can move securely, financial inclusion becomes economically sustainable,” Wen said.
The report highlights that these improvements are fundamentally economic issues. Strengthening shared rails directly impacts unit economics by reducing loss rates for lenders and minimizing fee leakage for overseas Filipinos sending money home. It also calls for a clear division of labor between sectors: public institutions should steward core data and standards, while regulated private operators build and deploy the infrastructure in the market.
The Philippine Fintech Stack is available in full at https://www.kayafounders.com/insights