2024菲律宾金融科技行业报告 Fintech Industry in the Philippines 2024 Bridge finance and future

Bridgefinanceandfuture

FintechIndustryinthePhilippines2024

Preface

AsarapidlydevelopingSoutheastAsianeconomy,thePhilippinesisexperiencing

unprecedentedgrowthinitsfintechindustry.Increasinginternetpenetration,

widespreadsmartphoneadoption,andstronggovernmentsupportforthedigital

economyhavefosteredaflourishingfintechecosystem.Thisgrowthisbringing

moreconvenientfinancialservicestothearchipelagicnationofover7,000islands.

Thisreportaimstoanalysethecurrentstateanddevelopmenttrendsofthe

fintechindustryinthePhilippines,whilealsoguidingreadersthroughthe

opportunitiesandchallengesfacingtheindustry,suchasdigitalinfrastructure

developmentandfinancialinclusion.

Thisreportisacomprehensivedataanalysis.Theconclusionarederivedfromobjectivedataanalysiswithoutanybiasedopinion▌

Contents

01

Preface

17

ChapterIII:Fintechindustrytrends

03

ChapterI:Philippinesmarketoverview

20

ChapterIV:Industryopportunities&challenges

08

ChapterII:Fintechecosystem

23

Conclusion

PHILIPPINES'a

MARKETOVERVIEW

4

.FINTECHINDUSTRYINTHEPHILIPPINES2024

PhilippinesGDP(2018-2023)(inbillionUSD)

Thefastest-growingeconomyinSoutheastAsiain2023

ThePhilippineeconomydemonstratedresiliencein

2023,achievingagrowthrateof5.6%,makingitthefastestgrowingeconomyinSoutheastAsia.The

WorldBankforecaststhatitseconomywillmaintaingrowthmomentum,withanaveragegrowthrate

risingto5.9%between2024and2026.Theglobal

economicrecovery,strongdomesticdemand,andinvestmentaresignificantgrowthdrivers.

In2023,theinvestmentapprovalsinthePhilippinesreachedahistorichighof1.16trillionPHP,with

foreigninvestmentapprovalsincreasingby452%

383

363

352

332

337

319

comparedto2022▌201820192020202120222023

Source:KPMG;WorldBank.

5

.FINTECHINDUSTRYINTHEPHILIPPINES2024

ThesecondmostpopulouscountryinSoutheastAsia

ThePhilippinesisthesecondmostpopulouscountryinSoutheastAsiaandthe13thmostpopulouscountryintheworld.Thecountryhasalargeandeducatedyoung

population,withamedianageof25in2023.

Therearesome120to187languagesspokeninthe

Philippines.TheofficiallanguagesareEnglishand

Filipino,anativelanguagebasedonTagalog.The

governmentprimarilyusesEnglish,andover70%of

thepopulationisproficientinEnglish.Theliteracyrate

Population

Urbanizationrate

①Medianage

2023117M2547.1%

iscloseto98%,amongthehighestinSoutheastAsia.TheurbanizationrateinthePhilippinesiscloseto50%,withQuezonCity,Manila,andCaloocanbeingthe

mostpopulouscities.Theurbanizationprocess

providesamoreconcentrateduserbaseforthe

developmentofvariousindustriesinthePhilippines▌

vs.30.5(global)

vs.57%(global)

13thmostpopulouscountryworldwide

2030e

26.8

49.3%

129M

Source:Worldmeters.

6

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Relativelyhighinternetpenetration

Inrecentyears,theinternetadoptionrateinthe

Philippineshasgraduallyincreased,reaching73.6%byearly2024.Amonginternetuserswithahigh

proportionofyoungpopulation,theshareofthose

usingmobiledevicestoaccesstheinternetis98.8%,withAndroiddevicesaccountingforthevastmajorityofmobilewebtrafficusage.

Intermsofnetworkcoverage,the4GcoveragerateinthePhilippineswascloseto90%in2023,andthe5Gcoveragerateisexpectedtoreach70%.However,

4GnetworkcoverageinthePhilippines(2021-2025e)

91.99%

90.29%

88.19%

85.49%

80.00%

thereisstillroomforimprovementinnetwork

connectivity.Accordingtothe2024GlobalBroadbandSpeedLeaguerankings,thePhilippinesranked92nd,

withanaveragedownloadspeedof52.07Mbps,slower

thantheAsianaverageof57.24Mbps▌2021202220232024e2025e

Source:DataReportal;Statista;WorldWideBroadbandSpeedLeague2024.

7

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Digitaleconomyisgrowing,whilefinancialinclusionneedstobepromoted

Activee-moneyaccountsinthePhilippines

(2020-2022)(inmillion)

+37%

PhilippineStatisticsAuthoritydatashowsthedigitaleconomyreached2.05trillionPHP(35.4billionUSD)in2023,contributing8.4%toGDP,a7.7%growthfrom

2022's1.90trillionPHP(32.8billionUSD).

Accordingtothe2022FinancialInclusionSurveybytheBangkoSentralngPilipinas(BSP),financialaccount

ownershipincreasedfrom56%in2021to65.6%in2022.However,thefinancialinclusionrateinthePhilippines

stilllagsbehindotherSoutheastAsiancountriessuchas

47.6

34.7

SingaporeandIndonesia▌20202022

Source:FintechPhilippinesReport2023;TheBangkoSentralngPilipinas;PhilippineStatisticsAuthority.

FINTECH'a

ECOSYSTEM

9

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Mobilepaymentsfillgapsinfinancialservices,BSPleadsfintechinnovation

TherapidgrowthofPhilippinefintechcanbetracedbackto2004withGCash'smobilepayments.Atthetime,

around80%ofFilipinoswereunbanked,andGCash

begantofillthisgapinfinancialservicesbyofferingSMS-basedmoneytransferservices.Digitalpaymentshas

sinceproliferated,becomingthecountry'smostthrivingfintechsegment.

BSPconsistentlypromotesonlinepaymentsfora

cashlesssociety.Keyinitiativesincludethe2009CircularNo.649regulatingelectronicmoneyissuers,the2015

NationalRetailPaymentSystem(NRPS)topromotedigitalpayments.UnderBSP'sguidance,“QRPh”wasintroducedin2019asthenationalQRcodestandard,

InstaPaylaunched

Digitalbankinglicenseissued

PartofNRPS,24/7real-timefundtransfers

BSPreleasedDigitalPaymentsTransformationRoadmap

Oneofthegoalsistodigitalize50%ofretailpayments

GCash

established

BSPlaunchedNationalRetailPaymentSystem

Firstregulatory

documentonelectronicmoneyissuers

BSPissued

CircularNo.649

withBSPmandatingallpaymentserviceprovidersto

offerQRcodepayments.In2020,BSPissueddigital

bankinglicenses,withsixdigitalbankslicensedby2023.Theseinitiatives,alongwithQRcodepayments,continuetoadvancethePhilippines'fintechlandscape,filling

financialservicegapsanddrivinginnovation▌

200420092015

20172018

Financialaccountownership:23%

20202021

Financialaccountownership:56%

Source:GCash;TheBangkoSentralngPilipinas;Publiclyavailableinformation.

10

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Fintechfundingreachednewheightsafterdigitalpaymentstransformation

SincethereleaseoftheDigitalPayments

TransformationRoadmapin2020,thefintechindustryinthePhilippineshasseenarecordamountoffunding

in2021.AccordingtodatacompiledbyUnitedOverseasBank(UOB),fintechcompaniesinthe

Philippinesraisedatotalof342millionUSDinthefirsthalfof2021,morethandoubletheamountraisedin

theentireyearof2020andsurpassingtheprevious

recordof248millionUSDsetin2018.Furthermore,

accordingtoareportreleasedbyGoogle,TemasekandBain&Company,digitalfinancialservicesrevenuein

thePhilippinesisprojectedtoreach2.8billionUSDby2025,withacompoundannualgrowthrateof20%

from2019to2025▌

Philippinefintechfundingsubcategoriesandcompanies(2021)(inmillionUSD)

Subcategory

Deal

Amount

Company

Payment

7

818.73

)Gcash

Lending

2

4.40

Cryptocurrency

1

12.50

Finance&Accounting

1

-

Insurtech

1

-

Source:FintechinASEAN2021(UOB);e-ConomySEA2020(Google,Temasek,Bain&Company).

11

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Paymentsandlendingremainthemainstreamofthefintechmarket

Subcategories,numberoffintechcompaniesandselectedplayersinthePhilippines(2023)

Payments&Remittance138Lending69

它eaycash久Bukas

βpaypald-localpayson》insta=ay

Asof2023,299companiesareactiveinthefintech

Blockchain&Cryptocurrency16KYC/Regtech&Crowdfunding14

marketinthePhilippines,coveringmultiplesectors

orjumio..ciBi.uwawa

includingpayments,lending,wealthtech,insurtech,andblockchain.AccordingtodatafromtheFintechAlliance

Philippines,paymentsandlendingremainthe

日okcoinΛxendit

mainstreamofthefintechmarket,accountingfor45%and30%ofmarketsharerespectively.Paymentservicesincludemobilepayments,andcross-bordertransactions,

Digitalbank6

Proptech&Insurtech12

etc.,whilelendingservicesencompassP2Plending,

onlineloanplatforms,anddigitalcredit,etc.These

Gctymeuuoegosa

figuresnotonlydemonstratethesignificantpositionofpaymentsandlendinginthefintechecosystem,butalsoreflectstrongconsumerdemandforconvenientand

efficientfinancialservices▌

E-Wallet27

包Mongoe-waiet会Marcopoy

Wealthtech&Comparison13

philstocks占seeoeox

ecomparegrmoney

Digital-centricbankingapps4

Source:FintechPhilippinesReport2023;FintechPhilippinesAssociation.Note:Somecompaniesareactiveinmorethanonesubcategory,thechartshowsonlyonesubcategoryforeachcompany.

12

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Virtualassetmarketcontinuestothrivewithtightenregulations

KeyregulatorybodiesforthePhilippinevirtualassetmarket

popularizationofcryptocurrenciesin2017.Blockchain-basedgameslikeAxieInfinityandPixelshavefurthercatalyzed

marketgrowth.Datashowsthatasof2023,thePhilippines

ranksfifthgloballyincryptocurrencyownership,with13.4%of

Filipinosowningcryptocurrencies.

Currently,17virtualassetserviceproviders(VASPs)havebeenlicensed,includingprominentplatformssuchasMaya,PDAXandUnionBank.Asthemarketexpands,theBSPhas

intensifieditsregulatoryoversight.InSeptember2022,BSPimposedathree-yearmoratoriumonlicensesgrantedto

VASPstoreviewlocalmarket.In2024,ThePhilippines

NationalTelecommunicationsCommission(NTC)hasstartedblockingwebsitesofcryptocompaniesofferinginvestment

productsinthecountrywithoutthenecessarylicenses▌

ThePhilippinevirtualassetmarkethasflourishedsincethe

BangkoSentralngPilipinas(BSP)

ThecentralbankandprimaryregulatorofthePhilippinefinancialsystem.BSPissuedCircularNo.108in2021.ThiscirculargoverntheoperationsreportingobligationsofVASPsinthePhilippines.

SecuritiesandExchangeCommission(SEC)

Thenationalgovernmentregulatoryagencychargedwithsupervisionoverthe

corporatesector,thecapitalmarketparticipants,andthesecuritiesandinvestment

instrumentsmarket,andtheprotectionoftheinvestingpublic.TheSEChas

publishedareportonInitialCoinOfferings(ICOs)andunveileddraftrulesonhowcompaniescanlegallyraisefundsthroughICOs.

Source:TheBangkoSentralngPilipinas;Triple-A;CoinGecko;TheNationalTelecommunicationsCommission(NTC).

13

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Mobilebankingappsrepresenthalfthemarket

No.ApplicationSubcategoryDeveloperregion

GCash

Digitalwallet&PaymentPhilippines

MobileBanking

Philippines

2

Maya

MobileBanking

Philippines

3

LANDBANKMobileBanking

AccordingtoDataSparkle,themarketconcentration1ofthePhilippines'financeappmarketisaround60%,indicatingarelativelyconcentratedmarketthatstillhassomeroomforcompetition.

FromJanuarytoDecember2023,thenumberofactiveusersoffinanceappsinthePhilippinesgrewby44%.

Amongthetop10financeappsbyactiveusersin2023,mobilebankingappsaccountedfor50%ofthemarketshare,whiledigitalwalletsandpaymentappsheld30%.Furthermore,themajorityofdevelopersforthetop10financeappsinthePhilippinesarelocalcompanies▌

1

Top10financeappsbyactiveusersinthePhilippines(2023)

4

UnionBankOnline

MobileBanking

Philippines

5

MyHomeCredit

PersonalLoans

Netherlands

6

PayPal

Digitalwallet&Payment

USA

7

SSSMobile

PublicService

Philippines

8

PalawanPay

Digitalwallet&Payment

Philippines

9

CARDBankkonek2CARD

MobileBanking

Philippines

10

BPI

MobileBanking

Philippines

Source:DataSparkle.Note:1.Marketconcentrationreferstothecombinedactiveusershareofthetop4applicationsinaselectedcategoryduringastatisticalperiod.

14

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Top1Philippinefinanceapp:GCash

GCash,launchedin2004asanSMS-basedmoneytransfer

service,introduceditsmobileappin2012,markingits

digitaltransformation.OperatedbyMynt,ajointventureofGlobeTelecom,AyalaCorporation,andAntFinancial,GCashreached76millionusersandpartneredwithover

139,000merchantsby2022.

AsthePhilippines'only”doubleunicorn“valuedover2billionUSD,GCashhasexpandedbeyondmoneytransfers,

offeringvariousfinancialservicestounderservedindividuals.

Theseincludelending,investment,insurance,

cryptocurrencies,andlifestyleservices.In2020,GCash

becameakeypartnerofthePhilippinegovernmentforits

NumberofmonthlyactiveuserofGCash(Jan-Dec2023)

SocialAmeliorationProgram(SAP)whichwasdistributed

viatheGCashappwithover16billionPHP(273millionUSD)inaidreceivedbymorethan2millionbeneficiaries.InJuly

2024,GCashannouncedseveralnewfeatures,includingthe

securityfeatureOnlinePaySafeandGScoreAI,anartificial

intelligence-basedcustomertrustscoringsystem▌JanFebMarAprMayJunJulAugSepOctNovDec

Source:DataSparkle;GCash;Publiclyavailableinformation.

15

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Top2Philippinefinanceapp:Maya

Maya,formerlyknownasPayMaya,waslaunchedin2015asadigitalpaymentapp.InApril2022,PayMayaofficiallyrebrandedasMaya,markingitstransformationfroma

singlepaymentplatformtoacomprehensivedigitalbank.MayaisoperatedbyVoyagerInnovations,ajointventureofinvestorsincludingPLDT,KKR,Tencent,andIFC,andis

thesecondunicorncompanyinthePhilippines.

MayaobtainedadigitalbankinglicenseinthePhilippinesin2021andwasnamedthe“BestDigitalBank”inthe

Philippinesin2023.Mayaoffersafullrangeoffinancial

services,includingpayments,digitalbanking,investments,

NumberofmonthlyactiveuserofMaya(Jan-Dec2023)

overseasremittances,andmobiletop-ups.Itoffers

savingsaccountswithinterestratesupto15%perannumandloansofupto250,000PHP(4,300USD).Mayaalsoprovidesbothvirtualandphysicalcardoptions,supporting

onlineandofflinepayments,offeringusersaseamless

financialexperience▌JanFebMarAprMayJunJulAugSepOctNovDec

Source:DataSparkle;Maya;Publiclyavailableinformation.

16

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Philippinetoplendingapp:MyHomeCredit

NumberofmonthlyactiveuserofMyHomeCredit(Jan-Dec2023)

HomeCreditPhilippines,establishedin2013,wasacquiredbyJapan'sMUFGandThailand'sKrungsriBankfromPPFGroupin2023.Itsmobileapp,MyHomeCredit,launchedin2017,

rankedfirstamongpersonalloansappsbyactiveusersinthePhilippinesin2023,accordingtoDataSparkle.

MyHomeCreditoffersinstallmentplansandcashloans.UserscanselectproductsfromtheHomeCreditMarketplacefor

installmentpurchases,andcollectitemsfrompartner

merchantsoffline.Productloansreachupto60,000PHP

(1,026USD),whilecashloansextendto150,000PHP(2,566

USD),with6-60monthrepaymentterms.Theappalso

introducedQwarta,avirtualcreditfeatureforloans,bill

payments,groceries,andonlineshopping▌JanFebMarAprMayJunJulAugSepOctNovDec

Source:DataSparkle;MyHomeCredit;Publiclyavailableinformation.

FINTECH'a

INDUSTRYTRENDS

18

.FINTECHINDUSTRYINTHEPHILIPPINES2024

OpenfinanceempowersdigitaltransformationinthePhilippines

In2021,BSPissuedCircularNo.122whichlaysouttheguidanceforthedevelopmentofaframeworkforopen

finance,andtheOpenFinanceOversightCommittee

TransitionGroup(OFOCTG)wasrecognisedastheinterimgoverningbody.“OpenFinancereferstoleveragingonand

sharingofcustomer-permissioneddataamongbanks,otherfinancialinstitutions,andthirdpartyproviders(TPPs)to

developinnovativefinancialsolutions,suchasamongothers,thosethatprovidereal-timepayments,greaterfinancial

transparencyoptionsforaccountholders,marketing,and

cross-sellingopportunities.”

InJune2023,thePhilippineslaunchedanOpenFinancepilotprojectwhichisacollaborativeundertakingoffinancial

institutions,participatingonavoluntarybasis.By2025,

OpenFinanceisexpectedtocontributeover2billionUSDinmarketvaluetothePhilippineeconomy▌

Customer-permissioneddata

Productandserviceinfomation

Subscription

8Accountinformation

自Newaccountapplications

Transactions

QOthers

Source:openfinance.ph;TheBangkoSentralngPilipinas.

19

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Digitalinsuranceemergesasanewoption

Only3%ofthePhilippines’spopulationhadinsurancein2022,butwiththestrongpresenceofdigitalplatformssuchase-

commerce,travelsitesandcomparisonsitesproviding

embeddedmethodsforpurchasingdigitalinsurance,the

insuredpopulationhasrisenmarkedlyinthecountry.Statistasurveyfoundthatnearlyhalf(49%)ofrespondentsinthe

Philippinessaidtheypurchasedonlineinsurancedirectlyfrom

insuranceprovidersitesorapps.

AccordingtoGlobalData,generalinsurancemarketinthe

Philippinesgrewby33.8%year-on-yearin2023,witha

projectedcompoundannualgrowthrateof9.5%from2024

to2028.InsurancecompaniessuchasBolttech,igloo,Oona

Insurance,andSinglifearelaunchinganincreasingnumberofdigitalinsuranceproductstogainafirst-moveradvantageinthemarket.Asagrowthsectorbenefitingfromincreasing

digitalisationandfinancialinclusioninitiatives,insurtechis

Grosswrittenpremiumsofgeneralinsurance1inthePhilippines(2022-2026e)(inbillionUSD,

2.98

2.74

2.48

2.18

1.63

poisedtomaintainsturdygrowthin2024▌202220232024e2025e2026e

Source:Statista;fintechnews.ph;GlobalData.Note:1.Generalinsuranceisnon-lifeinsurancecoverfordamageorloss.

INDUSTRY'a

OPPORTUNITIES&CHALLENGES

21

.FINTECHINDUSTRYINTHEPHILIPPINES2024

Improvedigitalinfrastructureandaddresscybersecuritychallenges

Mobilebroadbandsubscript

SoutheastAsian

ions1andcosts2inselectedcountries(2022)

ThailandSubscription:1221.4%

PhilippinesSubscription:702.0%

VietnamSub

scription:97

0.4%

ThePhilippinesfaceschallengeswithinadequatedigitalinfrastructure.MobilebroadbandcostsarehigherthaninneighboringSoutheastAsiancountries,andmany

ruralareaslackstable,high-speedinternet,hinderingfinancialinclusionandeconomicdevelopment.

Cybersecurityissuesareincreasing.66%ofFilipinos

MalaysiaSubscription:127

0.3%

worryaboutonlinedatasecurity.Kasperskyreportsthat

thePhilippineswasthesecondmostcyber-attacked

countryin2022.Thecountryranked45thoutof175inIndonesiaSubscription:91

the2023NationalCyberSecurityIndex.Fintech

companiesneedtoimplementstrongcybersecurity