Grab contribution to economy cited

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Ride-hailing firm Grab Philippines has contributed an estimated of P165.6 billion to the national economy from 2019 to 2021, according to a study conducted by the University of Asia and the Pacific’s (UA&P) Center for Research and Communications (CRC).

The study titled “The Impact of Ride-Hailing and On-Demand Delivery Services on the Philippine Economy” which was presented by Prof. Greg Mabbagu, UA&P program coordinator, showed consumer patronage of Grab services accounted for 0.07 to 0.3 percent of the national gross domestic product from 2019 to 2021 that resulted in an estimated total economic contribution ranging from P37 billion to P165.6 billion.

Mabbagu explained for every peso spent on the Grab platform, an additional P3.42 is injected into the national economy. This multiplier effect surpasses industry benchmarks – positioning Grab as a leader in economic contribution within the transportation sector, the study noted.

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The fundamental idea is that with a hypothetical P100-GrabCar ride, an additional P342 is generated for the economy, it added.

“Our study shows that Grab — with its strong foothold in the Philippines, its technology, portfolio of services, and robust ecosystem of partners and merchants, has a remarkable capacity to propel our economy forward. Having the unique position as a superapp has allowed Grab to fully realize a multiplier effect that reverberates throughout the economy and the Filipino household,” said Dr. Cid Terosa, UA&P associate professor, senior economist and Input-Output analysis specialist.

With this, the estimated total economic value of MyTaxi.Ph, operator of GrabCar and Grab Express Inc., stood at P48.2 billion during the period, of which P24.5 billion, P9.69 billion and P18.2 billion for 2019, 2020 and 2021, respectively.

Dr. Thomas Aquino, senior fellow at the UA&P-CRC, said Grab’s economic contribution is expected to be sustained driven by the growth of household income and improvement in transport network digital connectivity.

The household income multiplier of 0.44 also suggests that every additional peso spent on Grab’s services stimulates an increase of P0.44 in the national household income. This implies that an extra peso spent on Grab services extends beyond just covering the actual ride or meal — it contributes an additional 44 centavos to household incomes for laborers in the ride-hailing and on-demand delivery industry nationwide.

With this multiplier value for household income, Grab Philippines contributed 0.10 percent to 0.17 percent to the total family income from 2019 to 2021 which is equivalent to between P23.8 billion and P40.3 billion.

According to the study, Grab’s operations have also played a vital role in reducing the average number of unemployed persons by 1.1 percent to 1.6 percent from 2019 to 2021.

Grab operates in over 100 cities nationwide and eyes more areas beyond Metro Manila in 2024.

“Grab remains firm and focused in its commitment to being an active partner of the government in their growth and development agenda — and we are humbled to see this solidified in concrete economic outcomes. We understand that much work needs to be done in further driving the nation forward, and we are eager and prepared to help usher in a new phase of inclusive growth and prosperity – with the support of our partners in the government and public sector, and our regulators,” said Grace Vera Cruz, Grab Philippines country head.

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