The growth of FinTech in the Philippines


Over the last few decades, technological advancement has been akin to a rocket launch. A slow and steady accumulation of power at first, followed by a prolonged ratcheting up of momentum toward an ambitious liftoff into orbit. The growth of financial technology (fintech) is a perfect illustration in the Philippines.  The pandemic has hastened the growth of the financial technology (fintech) industry. Cashless payments and banking digitalization have become widespread, and several nations, including the Philippines, have speedily embraced the emerging trend. Despite noticeable advancements and higher capitalization in the financial technology sector, the island nation is still not as progressive as the other Southeast Asian nations. The complete absence of a comprehensive regulatory environment, as well as the industry’s poor financial inclusivity, discourages its progress. Nonetheless, financial technology (fintech) companies are on the rise, and their future is consistently being shaped as reported by the Department of Trade and Industry (DTI).

The Evolution of the Fintech Industry and Its Current Status

With a population of now over 100 million citizens, over half of whom have a mobile phone, the Philippines can be viewed as an ideal location for fintech development. Matter of fact, the Philippines has seen the establishment of numerous startups and fintech new ventures, with several putting the emphasis on payment solutions and innovative finance, with blockchain, cryptocurrencies, and other financial sectors quickly following.

The government’s reaction to the shifting landscape of fintech has been favorable. In recent times, the Philippine government has implemented policies aimed at increasing financial inclusion while also encouraging innovation and advancement in the financial services industry. The country’s central banking regulator even intends to boost digital payment system adoption by 20% by 2020. The government has also indicated its willingness to work collaboratively with other fintech leading figures by signing a fintech partnership deal with the Monetary Authority of Singapore. Regulatory safeguards were also put in place to assist in addressing concerns regarding laundering money and consumer protection laws.

According to the Department of Trade and Industry (DTI), the Philippines’ financial technology (fintech) industry is thriving, with current growth expected to accelerate in the years ahead. According to the Department of Trade and Industry (DTI), the amount of new businesses entering the country’s fintech sector is increasing at a rate of 16 percent on an annual basis. Because of the Philippines’ massive but young population, expanding middle class, and boosting urban development, the Philippines is one of the most thriving Southeast Asian economies presently. A thriving job market and significant remittances keep the country’s consumer demand strong, which compels economic growth. Commercial activities are growing rapidly, with exceptional results in service industries such as real estate, insurance, business process outsourcing, and finance. Massive economic improvements have increased in recent times, due mainly to the Philippine government’s productive pursuit of financial growth in collaboration with the country’s central bank, the Bangko Sentral ng Pilipinas (BSP). Among the most well-known and oldest financial assets is real estate. Technology-driven innovation has opened up brand-new possibilities within this classical financial asset in recent years, ranging from co-working to co-living to self-storage. Financial technology (fintech), like any other asset category, is critical to capitalizing on emerging trends in the Philippines.

Financial inclusion is a common problem in most underdeveloped countries. According to the Philippines’ central bank (BSP), just under 30% of Filipinos seemed to have bank accounts in 2019. In this regard, the BSP set a lofty objective of increasing this figure to 70% by 2023, and the figures actually rose. Some fintech solutions can help to solve the inclusivity problem indeed very effectively. Today, more than 74% of Filipinos own mobile phones, and they can conveniently register for a bank account utilizing their gadgets through a credible, government-approved app.

From 2013 to 2018, the percentage of Filipinos with debit cards nearly doubled thanks to fintech channels. In terms of digital payments, the Philippines is expected to be 30% in advance of the rest of the region. A whole other benefit is that women are more involved in the digital payment scene than men, and the aforementioned are far more financially included in a broad sense. The COVID19 pandemic emerged as an effective stimulator, pushing banks to go online and governments to begin preparing regulatory strategies. With the expansion of the ecosystem and steadily increasing sector funding, the number of fintech startups has started to grow. There are, as of now, over 220 fintech firms registered in the Philippines, with the majority of them focusing on mobile payments, e-wallets, lending, eCommerce, investment, and blockchain technology.

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Challenges of Fintech in the Philippines

But it is not all promising. Inadequate investment is a major impediment to the evolution of fintech. Amid rising interest, the industry’s funding puts much to be aspiring. Perhaps the investment climate will optimize once the country introduces its first reasonable regulatory framework. While other countries have made strides with fintech startups, the Philippines remains far behind. In 2018, startups in the Philippines received approximately $50 million in venture capital funding, a pitiful sum given that investment opportunities in the region totaled $3.6 billion that same year. Aside from seed funding, the Philippines seems to have limited entry to venture capital.

Fintech startups in the country encounter more than just funding challenges. Firms in the country face a troubling shortage of skilled employees. Startups in the country have reported challenges in acquiring and keeping fintech skillset. Even in the most technologically advanced regions, skilled professionals are difficult to find. The Philippines must begin the transition by implementing new educational programs and paying competitive wages.

Moreover, the Philippines’ fintech industry has also been decelerated by a shortage of infrastructure. Low internet infiltration and atrociously slow internet connection speeds have been exacerbated by a number of factors, including geographical considerations, government lack of action, corporate monopolies, and, most intriguingly, corruption, to leave the country with one of the poorest internet services in the Asia-Pacific region.


Fintech is an essential component of modern finance in the Philippines. The traditional perception of the sector of financial services has transitioned. Fintech possibilities make it easier and faster for individuals to handle their financial affairs. Furthermore, it has enormous potential for improving global economic life. People changed their spending habits as a result of the COVID19 pandemic, shifting to digital payments and online banking, liberating fintech startups in many Southeast Asian countries, such as the Philippines. But even though the industry remains in its early stages, the opportunities for expansion are greater than ever. The implementation of a well-constructed regulatory framework, combined with investment incentives, will greatly enhance the industry’s situation.

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Written by: MC Sanchez