The Philippines’ digital economy is on track to achieve $24 billion in gross merchandise value (GMV) this year, an increase of 13 percent compounded annual growth rate (CAGR), and well on its way to grow 20 percent to $35 billion in GMV by 2025.
This year’s e-Conomy SEA report released yesterday by Google said this firmly places the Philippines as one of the fastest-growing digital economies in Southeast Asia.
The report said electronic commerce continues to drive the country’s digital economy.
“With continued double-digit climb towards $35 billion 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 (artificial intelligence) and the digital participation of internet users outside Metro Manila which could drive medium to long term growth,” said Nikki Del Gallego, head of Data and Insights, Google Philippines.
Themed” Reaching new heights: Navigating the path to profitable growth,” the report said online media which comprises music, video streaming, and online gaming is projected to grow at $3 billion GMV in 2023, at 13 percent CAGR. This sector is also expected to reach $5 billion by 2025 at 19 percent CAGR.
Transport and food delivery is projected to reach $2 billion GMV this year and will continue to grow at 19 percent CAGR to hit $3 billion GMV in 2025 driven by return to office, travel, eating out, and brick-and-mortar shopping.
The report said the Philippines has the highest spend index for this sector among high value users (HVUs) in SEA which is more than 21 percent higher than non high value users (NHVUs).
The report added online travel is on its track to hit $3 billion GMV this year and is seen growing 18 percent CAGR by 2025 when the sector is expected to reach $4 billion GMV.
Online travel posted 88 percent growth from, the highest growth rate in the local digital economy from 2022 to 2023.
Digital payments is set to hit $93 billion this year and $126 billion by 2025 with e-wallet and account-to-account payment rails posting the fastest growth due to lower costs to merchants.
The annual report, which combines Google Trends, Temasek insights and Bain & Company analysis, as well as industry sources and expert interviews, spotlights the digital economies of six countries in Southeast Asia: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
