Despite strong growth in digital payments and fintech’s continued dominance in the Philippine startup ecosystem, many opportunities remain, especially in person-to-government (P2G) payments, micro, small and medium-sized enterprise (MSME) financial services, and remittances, according to a new report by Gobi Partners, an Asia-focused venture capital (VC) firm headquartered in Kuala Lumpur, says.

The report, released in November, looks at the Philippines’ startup ecosystem, exploring recent developments, emerging trends, and growth areas. It builds on prior editions and draws on publicly available data from sources such as Pitchbook, Dealroom, and CB Insights, and press announcements, as well as results from a 2025 startup founder survey of ventures that have secured either grants or equity funding, and which have been operating for at least one year.

The report highlights the surge in digital payments, which now accounts for the majority of retail transactions by volume and value. According to data from Bangko Sentral ng Pilipinas (BSP), the country’s central bank, digital retail payments reached 57.4% of monthly transaction volume and 59% of value in 2024, surpassing national targets.

Though digital retail payments are rising sharply, business-to-business (B2B) payments, on the other hand, are growing more modestly, accounting for just 6.2% of digital volumes in 2024. Because B2B still represents a small share of total digital payments, there is major opportunity for future growth in this area.

According to the report, a substantial untapped market exists for digitizing tasks including sending invoices, supplier payments, and automated reconciliation. Once these payments and invoices are digitized, companies can go a step further and offer additional financial products, including invoice financing and dynamic discounting on newly available data, it says. These products can generate superior average revenue per user (ARPU) and risk-adjusted returns by improving visibility into transaction histories and payment behaviors.

Another opportunity for 2025-2027, according to the report, lies in P2G payments. In 2024, only 24.6% of P2G were digitalized. These payments comprise payments for taxes, permits, or fees. In comparison, 97.2% of disbursements were digital that 2024, suggesting strong growth potential in P2G transactions.

Payment service providers (PSPs) with advanced capabilities are poised to gain a significant advantage in this area. In particular, providers that can deliver certified payment gateway, QR PH acceptance, payer identity matching, and agency-grade reconciliation will be well positioned to win P2G clients. These payments tend to be sticky, recurring, and typically come with more favorable pricing versus commoditized retail acquiring.

Remittance-linked financial services are another fintech category poised for growth. In 2024, the Philippines received a record of US$34.49 billion in cash remittances through banks, for a total of US$38.34 billion in personal remittances. This total comprises non-cash remittances, including digital remittances through e-wallets, money transfer operators, and transfers received in cash pick-up centers.

Because digital remittances still account for a small share of remittances, there is growth opportunity in this area. In particular, fintech companies can attach savings, bill payment, and risk-based consumer credit to recurring remittance inflows. These services can be automatically linked to the incoming remittance money to auto-deduct savings and credit products for recipient households, improving retention and lowering delinquency through cashflow-aligned repayment.

Fintech continues to lead

Fintech remains the leading startup vertical in the Philippines, dominating in scale, growth, and funding. A survey conducted as part of the Gobi Partners report in partnership with local education technology (edtech) startup Eskwelabs reveals that most participating founders are building fintech solutions.

This highlights the prominence of fintech in the Philippine startup ecosystem, and emphasizes the sector’s position as the backbone of the ecosystem.

Another key finding is that most startups in the Philippines (54%) operate under a business-to-business (B2B) model, focusing on enterprise clients and service-based solutions. In contrast, business-to-consumer (B2C) models account for 19%, while consumer-to-consumer (C2C) models remain limited at 3%.

This suggests an environment where large corporations or government agencies have clear needs for digital transformation, seeking service-based, efficiency-improving solutions that help them cut costs, automate tasks, or improve productivity.

While fintech is among the top verticals, the sector’s average revenue remains low, at less than US$3 million. This pales in comparison to e-commerce, at US$45 million, food and beverage, at US$9.6 million, and entertainment at US$8.1 million, underscoring the still-nascent stage of the Philippine fintech sector.

The study also found that incubators and accelerators play a critical role in the Philippine startup ecosystem. 56.9% of the founders surveyed participated in at least one incubator or accelerator program.

Local programs, such as those organized by the likes of the Department of Science and Technology (DOST), the Department of Information and Communications Technology (DICT), and QBO Innovation, a division of Ideaspace, are the most popular, with a 29.41% participation rate. In comparison, 17.65% joined international programs like Techstars, Y Combinator, and Antler.

The research also found that Philippine founders envision their startups as regional or globally oriented ventures. About 35.4% have already expanded abroad, while another 29.3% are planning to do so, reflecting a strong drive for cross-border growth.

However, 35.4% have not yet pursued international expansion, often due to resource constraints, market readiness, or a strategic focus on strengthening local operations. This reveals that while global ambitions are rising, domestic consolidation remains a priority for many startups

As of 2024, these Philippine startups had generated roughly 200,000 jobs, with leading contributors to job generation being edtech, entertainment, food and beverage, human resources (HR) technology, and e-commerce. These are sectors with scalable business models, broad market reach, and higher maturity levels.

Featured image: Edited by Fintech News Philippines, based on images by jayali6675 and gerain0812 via Freepik