PHL digital economy expected to sustain growth momentum

The Philippine digital economy is expected to maintain its growth trajectory, driven by e-commerce and the continued development of digital infrastructure.

The e-Conomy SEA report by Google, Temasek Holdings and Bain & Co. found that the Philippine digital economy is projected to grow 20% to $31 billion in terms of gross merchandise value (GMV), making it the fastest-growing digital economy in Southeast Asia.

The report also reiterated earlier market-size forecasts for the Philippines of $80 billion and $150 billion in GMV growth by 2030.

E-commerce will be the main driver for digital economy growth, with the segment projected to post $21 billion in GMV this year, up 23%.

Transport and food are expected to deliver $3 billion worth of GMV this year; while online media and online travel were valued at $4 billion and $3 billion, respectively.

“The increase in digital payment volumes is compelling service providers to maintain competitive fees while enhancing security and service reliability,” it said.

Digital payments are projected to post 22% growth in 2024 to $125 billion in gross transaction value (GTV). By 2030, digital payments are projected at between $200 billion and $300 billion in GTV.

GTV for digital payments includes the value of credit, debit, prepaid card, account-to-account, and e-wallet transactions, according to the report.

Google, the Singapore state investment company Temasek, and consulting firm Bain added that the surge in digital payments in the Philippines is keeping fees competitive while forcing providers to enhance security and service reliability.

“As the digital payments landscape matures and adoption becomes more widespread, e-wallet providers are increasing merchant discount rates,” according to the report.

The expansion of Philippine digital infrastructure is also expected to contribute to the overall digital economy’s growth, with broadband poised to connect even in remote areas.

Source: Business World

Big Byte Index: Philippines’ monthly internet cost 37th cheapest in the world

The Philippines ranked 37th out of 168 countries in World Data Lab’s Big Byte Index 2024, after scoring 16.6 out of 100. This means the country’s internet price at $4.8 a month is lower than the United States’ $28.8. The Philippines had the fourth-cheapest internet price compared with its peers in the East and Southeast Asian region.

The Philippines ranked 56th out of 169 countries in terms of the “internet poor” as a share of the population, according to the 2024 Internet Poverty Index by Austria-based data enterprise World Data Lab. This translated to over 18.33 million Filipinos or 15.9% of the total population who cannot afford a 1-GB-per-month internet package, the third highest in the region.

Source: Business World

Mobile financial apps gain traction

Financial technology (fintech) adoption through mobile applications is likely to reach 80 percent or about 65 million users by the end of this year, an analysis from consumer credit service Digido showed.

Approximately 79.5 percent of Filipinos ages 15 and older — about 66.4 million people — are expected to use fintech through mobile apps.

The growth is expected to be driven mainly by digital commerce, contributing 34 percent, followed by digital wallets at 27.2 percent and digital banking at 8.6 percent.

"The positive numbers seen in digital lending, digital wallets and digital commerce can be attributed to growing trust in these segments and its natural synergies with one another," Digido Business Development Manager Rose Arreco said.

"As strong demand for fintech in the Philippines continues, so too Filipinos' expectations on convenience, interoperability and improved user experience across these applications," Arreco added.

Digido reported that 76.2 percent of Filipino adults (63.1 million users) adopted fintech services through mobile apps from September 2018 to June 2024, with fintech app downloads totaling 617 million.

Digital commerce led with 31.4 percent of downloads, followed by digital wallets at 21.7 percent, and digital lending at 20.3 percent. The remaining downloads were for digital payments and transfers (11.6 percent), digital personal finance apps (8 percent), and digital banking (7 percent).

In the first half of 2024, Digido found that digital lending saw the highest growth with 25.4 million downloads, followed by digital commerce at 13.5 million, and digital wallets at 12.2 million.

Digital payments and transfers, digital banking, and digital personal finance apps had 7.8 million, 6.2 million, and 4 million downloads, respectively.

Digido noted that, on average, downloads grow at about 10.26 percent every six months.

In the first half of 2024, digital banking saw the highest growth at 22.34 percent, followed by digital payments and transfers at 17.72 percent, and digital lending at 16.81 percent.

"We believe that the Philippines remains on course towards widespread digitalization, with its 'fintech-ization' far from weakening," Arreco said.

"Collaboration within and outside of the industry remains paramount for this growth to be realized at a faster rate," she added.

Source: Manila Times