The technological landscape in the Philippines has shown periods rapid growth, while still suffering from unique challenges, and roadblocks. The industry remains an exciting battleground for many industries, but is marred by poor infrastructure and stagnant economy.
Over the year, Tech Collective has had the chance to speak to many Filipino entrepreneurs and we bring together insights from from three renowned experts, each specializing in different facets of technology in the Philippines. Their perspectives offer a holistic view of the nation’s tech scene, particularly focusing on investment potential, the state of offline retail, and challenges in the credit industry.
Together, these three experts offer a diverse and comprehensive overview of the Philippine tech ecosystem. Their perspectives, drawn from years of experience and deep sectoral knowledge, are not just observations but actionable insights for those looking to engage with and succeed in the Philippines’ tech industry. This compilation not only highlights the current state of technology in various sectors but also sheds light on the broader economic and social implications of these technological advancements. For anyone invested in the future of tech in the Philippines, this article serves as an essential guide to understanding the landscape and identifying opportunities for growth and innovation.
Vince Yamat, the Managing Director of 917Ventures
Our first expert, Vince Yamat, the Managing Director of 917Ventures, explores the investment landscape in the Philippines. Vince’s expertise offers an in-depth analysis of the current investment climate, highlighting areas ripe for growth and innovation. His insights are particularly valuable for startups and investors looking to understand the nuances of the Philippine market and the sectors that hold the most promise for future development.
The Philippines is a diverse country with several regions and numerous dialects spoken throughout its islands, making it a complex country where a one-size-fits-all approach doesn’t always work. Understanding local customs and preferences can be important for local startups looking to expand into these different regions.
To overcome this, many opt to partner with local governments or what we call LGUs Local governments have been actively collaborating with startups to continue the growth of the ecosystem and to further digitalization, financial inclusion, and generally uplift the lives of Filipinos. For one of our portfolio companies KonsultaMD, we partnered with the local government of Kidapawan City in Mindanao to make our services available and improve access to medical services for government employees and residents.
The local government has launched a lot of initiatives to support the startup ecosystem, which provides incentives and benefits to qualified startups. Therefore, several efforts are being made to bridge and manage this challenge so that our startups find success across the country.
Nishant D’Souza, Co-Founder of edamama
Next, we turn to Nishant D’Souza, Co-Founder of edamama, to discuss the evolution and current state of offline retail in the Philippines. In an age where digital transformation is often the focus, Nishant provides a fresh perspective on the enduring importance and transformation of brick-and-mortar retail spaces.
His commentary sheds light on how offline retail is adapting to technological advancements and consumer behavior shifts in the Philippines, offering a unique viewpoint on an often-overlooked segment of the market.
We have a three-pronged strategy to scale our offline presence – our own branded stores, expos and distribution of our private label brands in existing retail outlets. edamama has already opened two permanent physical stores in Robinsons Magnolia and Robinsons Manila malls, and another store is slated for opening at Ayala Vertis North before the year ends. We expect to open many more in 2024 and beyond.
In addition, we now run the largest independent retail expo in the country for parents. We did two this year and will be doubling our event count next year. Furthermore, our bean private label fashion assortment is now available in offline retail outlets including SM and Robinsons Department Stores.
Robin Wong, Chief Executive Officer of Mocasa
Lastly, Robin Wong, Chief Executive Officer of Mocasa, shares his expertise on the major obstacles facing the credit industry in the Philippines. His insights delve into the challenges of expanding access to credit, managing risk, and navigating the regulatory landscape. Robin’s experience provides a valuable lens through which to view the intricacies of the credit industry, a crucial component of the nation’s economic fabric.
There are two main obstacles: first is the lack of cashless payment tools, and second is insufficient credit data.
There are two main types of cashless payment tools in the world. First is the credit card or debit card (which is widely used in the US market), and the second is the e-wallet App (developed and greatly used in the Chinese market). Neither of these tools works in the Philippines. Our savings card penetration rate is about 50%, and the credit card penetration rate (among the Philippines’ working population) is only 8.1% as of end-2021 according to World Bank, which means that most Filipinos still do not have digital savings accounts and credit accounts. Although there are e-wallets like Gcash and Maya, they cannot be seamlessly linked to bank accounts and automatically debit money and must be “recharged” or topped up before they can be used, which is very inconvenient, resulting in e-wallets not being widely used for payment.
In terms of credit data, our credit bureaus are still in the early stages of development and can only cover a small number of people, and even the national ID has not yet been unified, resulting in disorganized credit data. Ultimately, without proper credit data, credit service providers have to raise interest rates in order to cover bad debt losses and consumers ultimately bear high interest.