The Philippines’ digital economy is forecast to hit $35 billion in gross merchandise value (GMV) by 2025, up from $20 billion this year, and then reach up to $150 billion by 2030, according to the 2022 e-Conomy report by Google, Temasek, and Bain & Co.
The report said the main driver of the country’s digital economy will be the e-commerce sector, which is seen to hit $22 billion by 2025, at a 17% compounded annual growth rate (CAGR).
Online travel, transport and food, and online media are also expected to contribute to the growth of the digital economy in the Philippines. The sectors are expected to grow to $4-$5 billion by 2025.
The 2022 e-Conomy report also shares an update on how digital economy sectors are tracking across six countries – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. This year, the report projects that Southeast Asia’s digital economy is on track to hit $200 billion GMV in 2022, three years earlier than was anticipated in the inaugural report shared in 2016.
One of the key findings in this year’s report is the shifting priorities of the majority of digital players from new customer acquisition to deeper engagement with existing customers to increase usage and value.
It also noted that technology investments in Southeast Asia have witnessed strong momentum in 2022, with deal value in the first six months surpassing that of the year-ago period.
“Most investors remain bullish in SEA’s medium- to long-term potential, and have $15 billion dry powder on hand. We note increasing interest in emerging markets, like the Philippines and Vietnam, and in nascent sectors, like SaaS and Web3,” the report added.
Singapore and Indonesia remain primary investment destinations in 2022 while Vietnam, and the Philippines are seeing growing investors’ interest over the longer term.
Vietnam is expected to have the biggest increase in terms of deal activity between 2025 and 2030 versus today at 83%, followed by Indonesia and the Philippines at 73%, Singapore at 50%, Thailand at 47%, and Malaysia at 30%.
The Philippines, however, is likely to attract more investors over the longer term, with deal activities seen to increase by 73% between 2025 and 2030, according to the report.
Stephanie Davis, Vice President, Google Southeast Asia, said the region’s digital decade continues to provide opportunities for people, businesses and communities to grow, and there are boundless opportunities ahead.
“While increasing profitability and maintaining growth momentum in the next 2-3 years has become a priority for companies across the region, it’s just as important to ensure the digital economy scales in an environmentally and socially sustainable way,” Davis added.