Friday, April 19, 2024

Study: For every P1 spent on Grab, P3.42 is injected into PH economy

Grab Philippines plays a pivotal role in driving economic growth, creating livelihood opportunities, and significantly contributing to the national GDP, according to a study conducted by the University of Asia and the Pacific (UA&P)’s Center for Research and Communications (CRC).

The study, titled “The Impact of Ride-Hailing and On-Demand Delivery Services on the Philippine Economy: A Focus on Grab Philippines”, ascertained that Grab’s economic influence is evident in its unique ability to amplify economic returns.

For every peso spent on the Grab platform, an additional P3.42 is injected into the national economy. The fundamental idea is that with a hypothetical P100-GrabCar ride, an additional P342 is generated for the economy.

“Our study shows that Grab – with its strong foothold in the Philippines, its technology, portfolio of services, and robust ecosystem of partners and merchants, has a remarkable capacity to propel our economy forward. Having the unique position as a superapp has allowed Grab to fully realize a multiplier effect that reverberates throughout the economy and the Filipino household” said Dr. Cid L. Terosa, UA&P associate professor and senior economist.

With a total output multiplier of 3.42, Grab ranks third among seven transport sectors next to railway and air transport. Moreover, compared with available multiplier studies published in local economics journals, this multiplier significantly outpaces heavy industries like mining, highlighting Grab’s unique and substantial economic contributions.

The study found that consumer patronage of Grab services accounts for 0.07 to 0.3 percent of the national GDP. From 2019 to 2021, Grab’s estimated total economic contribution ranges from P37 billion to P165.6 billion, reinforcing its position as a key contributor to the national economy.

The household income multiplier of 0.44 also suggests that every additional peso spent on Grab’s services stimulates an increase of P0.44 in the national household income.

This implies that an extra peso spent on Grab services extends beyond just covering the actual ride or meal – it contributes an additional 44 centavos to household incomes for laborers in the ride-hailing and on-demand delivery industry nationwide.

With this multiplier value for household income, Grab Philippines contributed 0.10 percent to 0.17 percent to the total family income from 2019 to 2021 which is equivalent to between P23.8 billion and P40.3 billion.

According to the study, Grab’s operations have also played a vital role in reducing the average number of unemployed persons by 1.1 percent to 1.6 percent from 2019 to 2021.

These findings strategically align with Grab Philippines’ commitment to the government of creating 500,000 livelihood opportunities.

“This study showcases how expansive the positive impact of online marketplaces like Grab have on national and local economies, promoting a more balanced regional development.  We are very optimistic that with the fast-growing adoption of digital-first ways of life, platforms like Grab will continue to be key economic drivers as they transform the lives of many Filipinos for the better,” Dr. Thomas Aquino, senior fellow at the UA&P-CRC, commented on the study.

Grab said it is set to further drive digital transformation through its everyday services to additional cities and municipalities beyond Metro Manila in 2024.

“We understand that much work needs to be done in further driving the nation forward, and we are eager and prepared to help usher in a new phase of inclusive growth and prosperity – with the support of our partners in the government and public sector, and our regulators,” Grab Philippines country head Grace Vera Cruz stated.

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