The Philippine digital economy is projected to reach $42 billion in gross merchandise value (GMV) in 2026, up 15 percent from $36 billion in 2025, driven by continued growth in e-commerce, online media, and digital financial services.
The latest e-Conomy SEA report released on Tuesday, Nov. 3, by Google, Temasek, and Bain & Company also projected that the country’s digital economy could expand to as much as $157 billion by 2035.
The 11th edition of the annual report, titled “Building the Intelligent Economy,” identified artificial intelligence (AI) adoption, expanding digital payments, and growing consumer participation in online services as factors supporting the industry’s growth.
E-commerce remains the largest segment of the Philippine digital economy, with GMV expected to reach $28 billion in 2026, representing a 15-percent increase from the previous year.
Online media is projected to grow 26 percent to $6 billion, accelerating from its 23-percent growth rate in 2025.
Online travel is also expected to expand by 14 percent to $3 billion, compared with 9-percent growth a year earlier.
Meanwhile, the combined mobility and food delivery segment is forecast to grow by a more modest 2 percent to $4 billion. The segment is projected to reach $7 billion by 2030 and $11 billion by 2035.
Digital payments post fastest growth in Southeast Asia
The report found that digital payments in the Philippines are expected to record the fastest growth in Southeast Asia in 2026, with gross transaction value rising 23 percent year-on-year to $194 billion.
The expansion is being supported by the wider adoption of the national digital ID system, the introduction of InstaPay for Business, and the merger of BancNet and the Philippine Clearing House Corporation (PCHC), which is intended to improve payment interoperability.
Digital lending is also expanding, with outstanding loan balances projected to reach $7 billion in 2026, up 17 percent from $6 billion in 2025.
The report expects the country’s digital lending market to grow further to $31 billion by 2035.
Digital insurance, meanwhile, is forecast to increase by 16 percent to $110 million in annual premium equivalent and gross written premiums.
This puts the Philippines alongside Vietnam as the fastest-growing digital insurance markets in Southeast Asia.
AI adoption reaches 42 million Filipinos
Beyond online commerce and financial services, the report highlighted the increasing use of generative AI (GenAI) among Filipino consumers.
An estimated 42 million Filipinos are now using standalone GenAI platforms, equivalent to 53 percent of the country’s working population, according to the report.
The figure increases to approximately 65 million monthly users when AI features embedded in other applications are included.
Filipino users collectively generate an estimated 55 billion AI queries annually, although only one in four AI users interacts with the technology daily.
The report also found that 33 percent of consumer journeys in the Philippines now begin with AI, indicating its growing influence on how people search for information, evaluate products, and make purchasing decisions.
However, usage remains relatively infrequent, averaging 1.87 AI sessions per week per user.
Filipino GenAI users also average 13 million consumer tokens each, based on the report’s measurement of AI usage.
Study, work, health, online shopping, and entertainment emerged as the five leading applications of AI in the country.
Consumer applications account for approximately 80 percent of total AI usage.
The report also found that Filipinos use AI extensively for creative and professional tasks. Prompts submitted to Google’s Gemini platform for customer support content are nearly three times the Southeast Asian average.
English remains the preferred language for AI interactions among Filipino users, with local-language prompts accounting for only 21 percent of conversations.
Filipinos increasingly willing to trust AI
The study also pointed to growing consumer confidence in AI-powered services.
Half of Filipino AI users reported trusting the technology more than they did a year earlier, while seven out of 10 expressed willingness to rely on AI-generated insights when making purchasing decisions.
Despite the widespread adoption, the report suggested that the Philippine market still has considerable room for growth, particularly in integrating AI into everyday activities and business operations.
Bennett Aquino, partner at Bain & Company, said the next stage of AI adoption would depend on moving beyond occasional use.
“Filipinos are embracing AI quickly, with 53% of the working population already using GenAI. But we are still early in the journey, and there is significant headroom for growth,” Aquino said.
“The next chapter is about depth, turning what is occasional use today into everyday workflows that will truly benefit Filipino individuals and businesses,” he added.
The report cited the establishment of the National AI Center for Research and Innovation in 2026, regulatory frameworks from the National Privacy Commission, and the Internet Transactions Act as policy developments that could support further digital expansion.
Google Philippines country manager Prep Palacios said continued AI adoption would require corresponding policy and industry support.
“As user confidence deepens and local AI use cases expand, strong policy support and collaborative ecosystem development will be key to unlocking the full potential of the Philippine digital economy,” Palacios said.
The report’s longer-term projections suggest that the country’s digital economy could nearly quadruple in size over the next nine years, although realizing that growth will depend on sustained adoption of digital services, deeper AI integration, and continued expansion of the digital financial sector.
