e-Conomy SEA 2022: PH Digital Economy to Reach $20 Billion by End of Year

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Google e-Conomy SEA 2022

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This year’s e-Conomy SEA report title Through the waves, towards a sea of opportunity projects that the Philippines’ digital economy is on track to hit $20 billion Gross Merchandise Value (GMV) in 2022, after growing at 22% over the past year.

By 2025, the local economy is projected to reach $35 billion GMV, growing at a 20% Compound Annual Growth Rate (CAGR), as possibly $100 to $150 billion GMV by 2030.

The annual report, which combines Google Trends, Temasek Insights, and Bain & Company’s analysis in addition to industry sources and expert interviews, highlights the digital economies of six countries in SEA – Indonesia, Malaysia, The Philippines, Singapore, Thailand, and Vietnam.

With a growth of 17% from the previous year, e-commerce is expected to reach $14 billion GMV by 2022 and $22 billion GMV by 2025 as it continues to propel the local digital economy. Even with in-store shopping slowly returning, e-commerce still accounted for 70% of the overall Philippine digital economy.

E-commerce, food delivery, and video on-demand are the top three digital activities of Filipinos showing an adoption rate of 88%, 69%, and 58% respectively among digital urban users.

This year’s e-Conomy SEA report

Here are the rest of the key insights into the Philippine digital economy:

  • Transport and food delivery are projected to reach $1.9 billion GMV in 2022 and continue to grow at 29% CAGR to hit $4 billion GMV in 2025. Demand growth is normalizing as more people eat out. The gradual return to office, increase in brick-and-mortar shopping, and the resurgence of tourism are driving recovery from lockdown lows for Transport.
  • Travel is back, with 180% YoY growth to hit $1 billion GMV in 2022. As recovery to pre-pandemic levels is likely to be gradual, travel is growing at 44% CAGR by 2025 where the sector is expected to reach $4 billion GMV.
  • Online media which comprises music, video streaming and online gaming is projected to grow at $3.1 billion GMV in 2022, with YoY growth at 17% since the pandemic peak last year. Highest in Southeast Asia, 37% of paying users in the Philippines said that they play online games at least once a week.
  • Digital financial services show sustained growth, with lending and remittance hitting $6 billion this year. Remittance is expected to deliver $4 billion in Gross Transaction Value (GTV) at 32%YoY growth. In 2022, digital payments will drive $75 billion GTV and keep growing at 18% CAGR to reach $123 billion GTV in 2025.

The Philippines will attract more investors over the long term

As the second fastest growing digital economy in SEA (next to Vietnam) in 2022 at 22% YoY and between 2022 to 2025 (at 20% CAGR), the Philippines will be a hot investment hub across sectors including digital financial services.

  • The Philippines has the fastest growing digital investments sector this year in SEA, at 63%growth rate from 2021 to 2022. Seventy-three percent (73%) of investors (second highest in SEA after Vietnam) are expecting deal activity to increase in the country’s local digital economy in the period of 2025 to 2030 as compared to the current situation.
  • Digital financial services are soaring high, and the sector continues to attract investor interest, capturing 56% of total investor funding in 2022 and raising roughly $450M in the first half of 2022 alone. Both Filipino unicorns Mynt and Voyager are in the fintech space.
  • Web 3.0 has attracted sizable investor funding raising $90M in the first half of 2022 with investors bullish on cryptocurrency adoption in the Philippines which is considered one of the fastest growing in the world.

“The Philippine digital economy remains resilient despite headwinds and continues to provide boundless opportunities as it is projected to reach $20 billion GMV by end of year. This year’s e-Conomy SEA report also suggests that the country will be a leading investment destination with over 70% of investors expecting deal activity to increase in the period of 2025 to 2030. Google is committed to help the Philippines sustain the growth momentum of its digital economy through local partnerships, programs and products that aim to improve the lives of Filipinos.”

– Bernadette Nacario, Country Director, Google Philippines

“The Philippines’ digital economy is one of the more attractive investment hubs in the region. Across
internet sectors there remains tremendous whitespace for growth as the ecosystem drives greater digital
inclusion in the country, particularly outside of metro areas. We expect growth to come from not only the
physical goods and services internet sectors, but also digital financial services across payments, lending,
and other Fintech products.”

– Willy Chang, Associate Partner at Bain & Company

“The seventh edition of the e-Conomy SEA report shows that the digital future of the Philippines is bright
as it has the fastest growing digital investments sector this year in the region. The Department of Trade
and Industry is committed to digitalize our MSMEs and work closely with our private sector partners like
Google to help reach the full potential of the country’s growing digital economy.”

– Alfredo Pascual, Secretary, Department of Trade and Industry

For PH Specific Findings, Click Here.

Emman has been writing technical and feature articles since 2010. Prior to this, he became one of the instructors at Asia Pacific College in 2008, and eventually landed a job as Business Analyst and Technical Writer at Integrated Open Source Solutions for almost 3 years.

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