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Philippines Emerging as a Prime Ground for Work
The business-friendly policies and low cost of production in the country provide a solid ground to work on. There is a lot of potential for further growth in the industry and startups must exploit the opportunities presented. In order to ensure the full potential of growth is achieved, there needs to be a barrage of investors in the country
Fremont, CA: The Fintech market has been growing worldwide, and the Asia Pacific region seems to be offering a solid ground for fintech startups to venture into the industry. The rise of multiple startups has disrupted the financial sector around the world, bringing about much-needed change and innovation. While China, Japan, and Singapore lead the way for these developments, the Philippines has not been far behind in recent years.
Most of the startups and business incubators in the Philippines have been focusing on payment systems and alternative finance. Meanwhile, blockchain, cryptocurrencies, and other financial services are not far behind. The response by the Philippines government towards the changing economic landscape has so far been positive. In recent years, the policies enacted by the government have been targeted at achieving greater financial inclusion while pushing for growth and innovation in the financial sector.
The signing of the agreement with the Monetary Authority of Singapore shows positive intent on the part of the Philippines government. The deal is targeted towards fostering financial cooperation between the two nations. Standard regulatory safeguards have also been set up to tackle money laundering threats and to ensure customer security. Both global and local investors have taken notice of the transforming market. In 2017, the financial sector saw a total investment of USD 11.2 million. This figure increased multiple folds for the year 2018, reaching USD 96.6 million.
While many countries have been able to support and nurture fintech startups, the same cannot be said about the Philippines. Despite the substantial investment in the finance sector, very little actually reaches startups. In 2018, startups in the country received USD 50 million in funding, an abysmal low, considering the total financing in the region was nearly USD 3.6 billion.
Along with funding, there is also a lack of talent in the country. This makes hiring and retaining fintech talent in the country an arduous process. This seems to be a common problem across the industry in the APAC region, as fintech startups in Indonesia, Malaysia, and Thailand face the same difficulties.
The lack of adequate infrastructure is another reason that holds back the growth in the fintech sector in the Philippines. The low rate of internet penetration, combined with horrible internet connectivity speeds makes connectivity a big issue in the country. Along with these, other factors such as geographical concerns, government inaction, corporate monopolies, and most tellingly, corruption, have left the country in an abysmal state, with one of the worst internet connectivity the world has ever seen, in the Asia Pacific region.
The business-friendly policies and low cost of production in the country provide a solid ground to work on. There is a lot of potential for further growth in the industry and startups must exploit the opportunity presented. In order to ensure the full potential of growth is achieved, there needs to be a barrage of investors in the country.