The Philippines’ Internet economy is expected to quadruple to $21 billion (₱1.1 trillion) by 2025, according to the e-Conomy SEA 2018 report by Google and Temasek. The report predicted that the Southeast Asian Internet economy as a whole will reach $240 billion (₱12.6 trillion) in value by 2025.

The Google-Temasek report says that the gross merchandise volume (GMV) of the Philippine Internet economy in 2015 was $2 billion (₱105 billion) and is expected to rise to $5 billion (₱260 billion) in 2018. The report also predicted that the GMV of the Philippines’ Internet economy will reach $21 billion (₱1.1 trillion) seven years later.

Nevertheless, the Philippines is still lagging behind its Southeast Asian neighbors. Indonesia’s digital economy has a GMV of $27 billion this year and is expected to reach $100 billion by 2025, with Thailand coming in second at $12 billion with an expected GMV of $43 billion by 2025.

The Philippines is also trailing its neighbors in terms of its Internet economy’s contribution to the country’s GDP. The Philippines’ Internet economy GMV is only 1.6% of the GDP – the lowest among the seven countries in the report. By comparison, Vietnam’s contribution is 4% while the regional average is 2.8%.

Of the Philippines’ $5 billion GMV, e-commerce takes up $1.5 billion, online media $1.3 billion, online travel $1.8 billion, and ride-hailing $500 million.

By 2025, e-commerce in the Philippines is expected to hit $10 billion, while online media takes up $4 billion, online travel $5 billion, and ride-hailing $3 billion.

Southeast Asia’s Internet Economy

The Internet economy of the Southeast Asian region is expected to triple in value from $72 billion in 2018 to $240 billion in 2025. This is higher than what was estimated by the 2016 and 2017 reports, which predicted the region’s Internet economy to reach $200 billion. The 2018 report says that Southeast Asia’s Internet economy “keeps blowing expectations out of the water,” noting that tech companies have already raised half of the $40-50 billion that they are expected to attract.

This year, Southeast Asia’s e-commerce sector is estimated to make $23 billion, while online travel, online media and, ride-hailing make $30 billion, $11 billion and $8 billion, respectively.

By 2025, e-commerce will take up the bulk of the Internet trade and is expected to earn $102 billion. Online travel, online media, and ride-hailing will get $78 billion, $31 billion and $29 billion, respectively.

The Google-Temasek report also says that there are 350 million Internet users in Southeast Asia, with 3 million people going online for the first time every month. Furthermore, 1.7 million full-time jobs will also be created by the Internet economy by 2025.

Startup Funding

Since 2015, Southeast Asian startups have already raised $24 billion so far, of which $9.1 billion was raised only in the first half of 2018.

Majority of the startup funding went to the region’s nine “unicorns” (startups with more than $1 billion in value), led by Grab with a value of $6 billion. Unicorns fetched $16 billion in funding since 2016, with $6.5 billion coming in the first half of 2018 alone.

Outside of the unicorns, Southeast Asian startups raised $7.1 billion in funding since 2016, raising $2.6 billion in the first half of 2018. Startups valued at $10 million to $100 million raised a record $1.4 billion so far this year.

Ride hailing ($10 billion) and e-commerce ($8 billion) grabbed the lion’s share of the funding. Singapore-based companies raised $16 billion in investments, while Indonesian companies received $6 billion. The rest of the region raised a mere $2 billion.