Manila’s startup ecosystem value surged to an impressive $3.5 billion over the past two years from $2.1 billion, marking an 85 percent growth and boosting the Philippines proposition as the better alternative to build a business, according to the latest Global Startup Ecosystem Report (GSER) 2023.

The GSER 2023 Report released Friday, June 16, ranks the top 30 as well as 10 runner-up global ecosystems and includes a top 100 ranking of emerging ecosystems. It also highlights startup communities from a regional perspective, separately ranking ecosystems in Africa, Asia, Europe, Latin America, MENA, North America, and Oceania. Key themes of this year's report include inflation, AI regulation, talent attraction, global VC funding, and a wide range of market sub-sector analyses.

“Ranking among the top startup ecosystems in the Asia Pacific, Manila is the most active startup ecosystems in the Philippines, potentially becoming the leading hub for innovation and entrepreneurship in Southeast Asia,” the report stated.

Based on the report, Manila was among the top 25 Global Ecosystem in Affordable Talent.
Manila was also in the top 10 top 10 in the Asian Ecosystem in Affordable Talent, which measures the ability to hire tech talent; and in the top 20 in Asian Ecosystem in Funding, which measures innovation through early stage funding and investor’s activity.

In addition, the capital city of the Philippines belonged in the top 30 Asian Ecosystem in Bang for Buck—measures the amount of runway tech startups acquire, on average, from a venture capital (VC) round.  The report showed that Manila VC funding reached $1.3 billion from 2028 to 2022.

In terms of Asian Ecosystem in Talent & Experience, Manila was among the top 30. This measures long term trends over the most significant performance factors and the ability to generate and keep talent in the ecosystem.

Manila was again the Top 30 Asian Ecosystem in Performance, which measures the size and performance of an ecosystem based on the accumulated tech startup value created from exits and funding.

The report also cited three reasons why a startup should move to Manila. These are: young, educated talent, government support, and dedicated startup support.

“Manila is rich in young and competent tech talent with the potential to discover and develop new solutions in various sectors,” the report added citing median age in the Philippines at  25.3 years old with 350,000 college graduates each year. The report also cited a 2022 EF English Proficiency Index, which ranked the Philippines number two in Asia and 22nd in the world.

In terms of government support, the report noted of some laws such Innovative Startup Act, Ease of Doing Business Act, Foreign Investments Act and CREATE Law, all aiming at enabling startups in the country.

Furthermore, GSER report cited strengths in sub-sectors – fintech, e-commerce, and gaming.
“The Philippines is among the fastest-growing countries in terms of online retail sales growth,” the report said citing boosts coming from the E-Commerce Act of 2000, which recognizes electronic documents as legally equivalent to written ones.

Gaming or Esports is also growing in popularity in the country because of the increasing availability of smartphones and mobile internet. There are 45 million active gamers in the country.
Fintech is also an area of strength where the Bangko Sentral ng Pilipinas targeting to achieve 50 percent digital retail transactions and 70 percent of Filipino adults having bank accounts by 2023.

Aside from Manila, the report said that other highly urbanized cities in the country, including Naga, Iloilo, Cebu, and Davao show potential as startup destinations.

"To witness Manila gaining traction as an innovation hub is incredibly rewarding. This underscores the Philippines' transformation from an active player to a formidable leader in the ASEAN region—an achievement we share with the dynamic stakeholders of the Philippine startup ecosystem," said Trade and Industry (DTI) Secretary Alfredo E. Pascual in a statement. .

“Our impressive leap in the GSER 2023 Report is a testament of our sustained commitment to fostering a dynamic startup ecosystem. We have put in place mechanisms for continued growth, from streamlined government processes to strategic investment support mechanisms,” Pascual added, emphasizing the collective efforts of DTI, the Department of Science and Technology (DOST), Department of Information and Communications Technology (DICT), and the National Economic and Development Authority (NEDA) to harmonize programs and resources thereby accelerating the innovative startup ecosystems.

Meanwhile, Rafaelita Aldaba, DTI Undersecretary for the Competitiveness and Innovation Group (CIG), underscored the government's steadfast investment in the nation's human capital, recognizing its pivotal role in Manila's tech innovation success. The focus, she indicated, is centered on nurturing and developing the young, educated workforce that is driving Manila's vibrant startup ecosystem.

Moreover, Aldaba pointed out the government's dedicated efforts to foster innovation and skill development via the Science, Technology, and Innovation Industrialization strategy and the Philippine Skills Framework. "We continue to invest in and inspire our young Filipino talent. Our strategy fosters scientific and technological innovation while the Skills Framework ensures they are equipped with competencies that are in demand. We firmly believe that our people are our primary competitive advantage in this era of industrial transformation," she added.

"Our greatest asset in this transformative era lies in our human resources. By strategically harnessing these resources, we're laying the groundwork for the next wave of Filipino innovators, ensuring they leave an indelible mark on the global stage,” added Pascual.