MANILA, Philippines — Clean energy and climate startups in the Philippines are trailing their regional counterparts in terms of capital investments, according to California-based business incubator New Energy Nexus (NEX).
At a recent media roundtable, NEX country director Brenda Valerio said the Philippines is “lagging” in Southeast Asia when it comes to the number of unicorns, or startups with a valuation exceeding $1 billion.
“I guess the quality of startups that emerge within the community and the ecosystem, we don’t have good success cases for the longest time,” Valerio said.
Although investments from foreign investors were flowing in the Philippine market, Valerio stressed that they were “not quite significant” to provide financial muscle to startup companies.
According to Valerio, government grants are insufficient to cover the inadequate private sector investments.
“The Filipino clean energy innovation ecosystem has shown huge progress and promise in the past years, but the nascent space runs the risk of stalling because of a lack of access to networks, funding, testing facilities and skills training,” she said.
Notwithstanding this, Valerio is seeing brighter prospects for local startups on the back of an improving business landscape and government policies.
Latest NEX data showed that clean energy and climate startups in the country increased to 91 this year from 15 in 2020.
The bulk is in Metro Manila at 34.1 percent, followed by Calabarzon (16.5 percent) and Northern Mindanao (14.5 percent).
Nearly half of the startups are in the renewable energy sector, while others are in the sustainable transportation, energy access and waste management sectors.
Amid the challenges in the local startup sector, Valerio emphasized the need for stronger public and private sector collaboration to bridge these gaps.
“Instead of working independently, government agencies, think tanks and non-government organizations must collaborate to make processes more efficient for startups and to catch up with the country’s growing startup space,” she added.
Looking ahead, Valerio expects local energy and climate startups to hit around 350 in the next six years.