MANILA, Philippines — The country’s financial technology (fintech) industry is flourishing, with current growth expected to rise further in the coming years, according to the Department of Trade and Industry (DTI).
“The opportunity for fintech businesses to thrive is strong due to a confluence of unique and positive factors like the growing adoption of e-commerce and the opportunity to embrace new technologies including financial inclusion to serve the unbanked,” Trade Undersecretary Rafaelita Aldaba said.
The number of startups entering the fintech sector in the country is growing at an average rate of 16 percent annually, according to the DTI.
Aldaba said that based on DTI figures, there are now 136 fintech companies operating in the country, taking up 26 percent of the total number of local startups.
According to Aldaba, most of these fintech companies are in the alternative finances segment, accounting for 29 percent of the total.
She said 22 percent are in payments and 19 percent are focusing on blockchain, while the rest are in other fintech activities such as remittances, investment, and crowd funding.
Citing the latest report from Genome, Aldaba said the transaction value of the fintech market in the country amounted to $5.7 billion in 2018 and the figure is expected to rise to $10.5 billion by 2022.
“There so many potentials in the Philippines. We are still not among the top, but we are catching up. The government recognized the importance of creating an enabling environment by advancing our regulations and investing in infrastructure to promote greater digital connectivity,” Aldaba said.
“There are still many challenges ahead, but we in the government are working together to increase the awareness on the benefits of digitalization, and address skills gaps along with inadequate connectivity,” she said.
According to Aldaba, fintech companies and products have largely contributed to the government’s drive for financial inclusion. These include telcos and traditional banks launching their own fintech products, offering millions of consumers access to formal credit products, small and medium enterprises as well as farmers being given alternative finance by startup firms who link them to banks and other investors, and mobile wallets and startup firms working on modernizing remittances through online payments and use of cryptocurrencies.
Given the industry’s numerous contributions, Information and Communications Technology Undersecretary Jose Arturo de Castro said fintech is a game changer for the country.
“DICT aspires for a truly digital Philippines, a nation empowered with digital opportunities and enabling tools. It is with that vision in mind that we recognize and support the promise that fintech dreams of – a truly inclusive digital future,” De Castro said.
This May, the Philippines will hold the Philippine Fintech Festival, an international gathering of experts and leaders in innovation.
The event is a partnership among various government agencies and private corporations and organizations such as Distributed Ledger Technology Association of the Philippines (DLTAP) and FinTech Philippines Association (FPH).
“We are working closely with the various government and industry partners in putting together PFF 2020 because this is an opportunity to showcase the Philippines’ capabilities in the fintech space. Through the PFF, we are taking a shot at co-creating the future together, DLTAP and FPH chairman Justo Ortiz said.