ASEAN member state the Philippines has established a supportive ecosystem for startups, which could lead to acceleration of the development of innovative companies, the Asian Development Bank (ADB) said in a recent report.
Technology-based startups are an increasingly important part of the business landscape in Asia and the Pacific, the bank said in its report ‘The Philippines Ecosystem for Technology Startups.’
Fintech and e-commerce dominate the startup scene in the Philippines, as in many countries. There are also startups with high development impact emerging in the country, such as startups focused on education (edtech), health (healthtech), agriculture (agritech), and the environment (greentech).
The Philippines government has recently launched a series of supportive policies and programmes, including the Innovative Startup Act and the Philippine Innovation Act. Those pieces of legislation were passed before the start of the COVID-19 pandemic.
Moreover, the Philippines government has helped create a large number of incubators, many through universities, and a grants programme has been launched, according to ADB’s report.
Financing is the key constraint for young startups. In the Philippines, there are at least 40 venture capital firms, but investments are concentrated in mature digital sectors such as fintech, media and entertainment, and e-commerce.
“There is a need to attract investors for agritech, cleantech, edtech, and healthtech to give these sectors a greater chance of development,” said ADB Economist Paul Vandenberg, who collaborated on the study with local researchers.
But overall, “The government understands the importance of startups for driving innovation now and in the future,” Vandenberg noted.
“It has significantly raised the scope and quality of public sector support for startups in recent years, including creating a policy environment conducive to the sector’s growth.”