The Philippine digital economy is on pace to reach $36 billion in Gross Merchandise Value (GMV) by 2025, solidifying its position as one of Southeast Asia’s fastest-growing digital markets.
Growth is being fueled by booming e-commerce, rising digital payments, and rapid adoption of artificial intelligence (AI), according to the latest e-Conomy SEA 2025 report by Google, Temasek, and Bain & Company.
Speaking at the report’s launch, Google Philippines country manager Prep Palacios said the Philippines is moving into a new era of technology leadership driven by everyday users.
“It’s about Filipinos leading the charge in this new decade of AI,” she said, noting that Southeast Asia now registers three times higher interest in generative AI than the global average.
Palacios added that Filipinos are embracing multimodal AI — tools that interpret images, video, audio, and text — faster than many advanced markets.
“What happens in months or years in many other countries perhaps happens here in months or weeks,” she said.
E-commerce remains the Philippines’ largest digital sector, accounting for more than 60% of GMV.
Video commerce is now a major growth engine, with 475,000 Filipino sellers — up 90% from last year — driving 1.2 billion transactions.
Bain & Company partner Bennett Aquino said this shift reflects how local digital behavior has evolved.
“Video commerce is no longer a novelty in the Philippines — it is now mainstream,” he said, noting that it already comprises a quarter of total e-commerce GMV.
Aquino added that the country’s e-commerce landscape is well positioned to double by 2030 as logistics capacity improves and sellers adopt new formats like livestream selling.
“We’re quite optimistic about this space,” he said.
Transport and food delivery platforms grew 20% year-on-year, the fastest in Southeast Asia alongside Vietnam. Companies have been optimizing logistics and offering more affordable product tiers to boost demand.
Online travel rose 14%, supported by domestic tourism, though international arrivals remain below pre-pandemic levels. The gap, Aquino noted, stems largely from still-recovering arrivals from China — an area where neighbors like Vietnam and Malaysia have already rebounded.
AI is now deeply embedded in how Filipinos search, shop, and consume information. The report shows that 78% of Filipino digital users rely on AI-powered tools for tasks ranging from translation to image-based search.
Palacios highlighted how AI is transforming consumer journeys:
“AI is helping us be more intelligent in filtering what’s most relevant to us… It’s about saving time and deciding faster.”
Nearly half of Filipinos surveyed said AI tools help them reduce research time and simplify decision-making.
Google Southeast Asia marketing lead Nikki del Gallego said businesses must now match consumers’ rapid AI adoption.
“Consumers’ rapid AI adoption is making a powerful pull on the market that businesses must match,” she said.
Del Gallego emphasized three priorities for companies operating in the region: meeting consumer demand, empowering employees with AI tools, and building deeper trust.
She cited Grab’s AI driver companion as an example of operational transformation, saying “over 250,000 Grab drivers today are using the AI driver companion to predict demand, resulting in 20% higher daily earnings.”
Trust remains the next frontier, she added: “People currently trust AI to do simple tasks, but not yet for high-stakes decisions… Businesses must really double down on trust standards.”
Digital payments in the Philippines surged 20%, hitting $150 billion in GTV, with wallets now becoming the default checkout method for many online shoppers.
Aquino noted a major shift in behavior: “The days of cash are slowly dwindling. Fifty-seven percent of monthly retail volume is now digital.”
Digital lending, wealth, and insurance also continued to expand, supported by embedded finance and maturing financial habits among Filipino users.
Funding in the Philippine digital sector has begun to recover, driven by large fintech deals and rising investor confidence.
Aquino said AI-focused companies will likely attract more capital moving forward. “It’s inevitable that the investment and funding landscape will have AI at the core of it starting in the next year or so,” he said.
He added that 71% of investors surveyed expect to have companies with AI at their core in their portfolios within the next 12 months.
Aquino also noted that Southeast Asia exceeded earlier projections for 2025.
“Forecasts before of 200 billion GMV by 2025 completely blew that out of the water. This year we’re expected to cross 300 billion,” he said.
