Phl digital economy seen at $25B in ‘25

WHILE the local digital economy is expected to balloon to $25 billion by 2025, the Philippines stands to be the nation with the smallest digital economy among six countries in the Southeast Asian region, according to a study conducted by Temasek and Google.

In its 2019 report entitled e-Conomy SEA 2019: Mobile Internet Economy Transforming Southeast Asia, Temasek and Google found that the Philippine digital economy will grow by a whopping 257.14 percent from $7 billion this year to $25 billion by 2025. The dollar figures are measured by the gross merchandise value.

This expected expansion of the digital economy is driven largely by the rise of e-commerce in the country, led by various shopping platforms, such as Shopee, Lazada, and Zalora, online travel, online media and ridehailing.

However, this growth rate is dwarfed by rising tech hub Indonesia, home to super app Go Jek and the largest market of everyday, everything app Grab. It will end 2025 with a digital economy worth $133 billion, or a surge of 232.5 percent, albeit slower by a few percentage points versus the Philippines’s growth of 257.14 percent.

Thailand will trail behind at $50 billion in gross merchandise value, followed by Vietnam at $43 billion. Singapore at $27 billion, and Malaysia at $26 billion.

“While Indonesia and Vietnam are leading the way, Malaysia, the Philippines, Singapore and Thailand are also performing strongly. In fact, with growth rates averaging between 20 percent and 30 percent a year since 2015, these countries stack up very well against many others globally,” the report read.

The Philippines, the report said, may further drive its digital economy by leveraging on its current strengths and developing those to expand more quickly.

“Of the six Southeast Asian countries, the Philippines has the most room for growth. The Internet economy makes up 2.1 percent of the country’s GDP currently, and is expected to hit 5.3 percent by 2025. Notably, the Philippines is experiencing a growth surge in the Online Media sector, which has recorded a 42-percent annualized growth rate since 2015. Subscription Music and Video Streaming services are especially popular among young Filipinos who are well-acquainted with English content,” the report read.

Temasek and Google, likewise, cited strides on digital finance by Voyager Innovations inc., Coins, and First Circle, all three of which“boosted” investments in the Philippine Internet economy to roughly $300 million last year.

“Aided by supportive regulations, Digital Financial Services is one of the country’s most dynamic and promising sectors,” the report read.