Manila, Philippines – Following the significant digital participation of AI, Google’s latest e-Conomy report for Southeast Asia revealed the accelerated growth for Philippines is expected to reach double digital growth from 2023 to 2025, positioning itself as one of the region’s fastest-growing economies.
Amongst the findings, it was reported that e-commerce continues to be the primary driver of the country’s digital economy, accounting for its 70% overall online activities. Benefiting from the shift of informal, unorganised commerce to organised digital platforms, it is also expected to reach $24B GMV by 2025 at 21% CAGR.
By 2025, the local digital economy is set to continue its double-digit climb towards $35B GMV, growing at 20% CAGR making the Philippines a fastest-growing digital economy.
Meanwhile, online travel demonstrated the largest growth from 2022 to 2023 at 88% due to the ongoing momentum of tourism.
Specifically, both domestic and regional transport providers are growing into outer cities. Businesses have also embarked on expanding their two-wheeler products as a more cost-effective alternative form of transportation in an effort to attract these markets.
Speaking about the report, Nikki Del Gallego, head of data and insights at Google Philippines, said, “With continued double-digit climb towards $35B by 2025, the country’s digital economy continues to exhibit resilience and generate opportunities for Filipinos despite macroeconomic headwinds. This momentum is poised to continue, fueled by the immense potential of AI and the digital participation of internet users outside Metro Manila which could drive medium to long term growth.”
Bennett Aquino, partner at Bain and Company also commented, “It really is quite a feat that both Southeast Asia’s digital economy GMV and revenue continued their double-digit growth momentum despite this challenging macroeconomic environment, with revenue breaking the $100B mark in 2023.”
“More than anything, this shows the resilience of the Southeast Asia digital economy and that the key players are figuring out the monetization puzzle and making headway towards healthier unit economics. Despite external headwinds, we are optimistic that the digital economy – both for SEA and the Philippines – will continue to grow substantially in the longer run,” he added.
Meanwhile, Fred Pascual, secretary at the Department of Trade and Industry, said, “It is truly remarkable that the Philippine digital economy is on track to achieve sustained double-digit growth. Through a whole-of-government approach, the Department of Trade and Industry (DTI) remains committed to collaborating closely with partners from various sectors, including Google, to empower Filipinos in realising the benefits of the growing digital economy through upskilling opportunities.”
This year’s SEA digital economy revenue also is projected to reach $100 billion, expanding at a rate 1.7 times faster than the GMV of the area. This further delves into the opportunities of increasing digital participation to unlock the potential of raising digital engagement.