Philippines digital economy to hit $24bln this year

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The Philippines' overall digital economy is expected to hit $24 billion this year and $35 billion in 2025, making it one of the fastest growing in Southeast Asia, according to a new report released by Google.

Google's e-Conomy SEA 2023, which combines Google Trends with insights from Temasek and analysis from Bain and Company, showed the Philippine digital economy on track to hit $24-billion gross merchandise value (GMV) in 2023, up 13 percent from last year's $22 billion.

The report found that the country's digital economy was still largely fueled by e-commerce, which is expected to hit $16 billion this year from last year's $15 billion.

By 2025, it was projected that e-commerce - which the report said benefitted 'from the shift of informal, unorganized commerce to organized digital platforms' - will account for $24 billion in GMV in the country.

'With continued double-digit climb toward $35 B by 2025, the country's digital economy continues to exhibit resilience and generate opportunities for Filipinos despite macroeconomic headwinds,' Nikki del Gallego, head of Data and Insights at Google Philippines, said.

'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,' Del Gallego added.

In a statement released by Google, Trade Secretary Alfredo Pascual said, 'It is truly remarkable that the Philippine digital economy is on track to achieve sustained double-digit growth.'

'Through a whole-of-government approach, the Department of Trade and Industry remains committed to collaborating closely with partners from various sectors, including Google, to empower Filipinos in realizing the benefits of the growing digital economy through upskilling opportunities,' Pascual added.

Other sectors that significantly contributed to the rise of the country's digital economy included travel ($3 billion), online media ($3 billion) and transport and food ($2 billion), according to the report.

The report noted that recovery in the services sector is expected to drive growth over the medium- to long-term.