Spring for PH-ASEAN tech economy

From winter to spring for PH, Asean startups

Story by Amanda Murphy, Sandeep Uppal 
Inquirer.net
17 May 2024

While much has been written about a “funding winter,” one could be forgiven for forgetting that Southeast Asia remains home to the world’s fastest-growing digital economy: the region’s digital economy expanded by 12 percent in 2023 and is expected to record a compound annual growth rate of 16 percent until 2030.

Fundraising figures, however, do show how challenging it has been for the sector of late. The amount of capital raised by startups in the region more than halved in 2023, and the number of deals fell significantly.

As a result, many of the Philippines’ digital economy entrepreneurs have had to dig into personal savings and tap family and friends to keep their startup dreams alive as a freeze in funding drags on despite the region’s many attractions for investors.

We are also increasingly seeing the region’s growing appeal to investors in discussions with clients, including at the recent Global Investment Summit hosted by HSBC.

This sentiment is also borne out in a recent HSBC survey of businesses operating in the Association of Southeast Asian Nations (Asean), 74 percent of which intend to increase their investment in the region in 2024. The same enthusiasm is also observed in the Philippines where 72 percent locally based businesses plan to expand into new markets in the region.

For Filipino startups, financing is key

Capital is the lifeblood of innovative companies, which must often invest heavily in new technologies and platforms before they can commercialize them.

In the Philippines, funding is a key constraint for startups. While there are several promising startup companies, financing is scarce as venture capital arms in the country are focused mainly on supporting mature digital sectors such as fintech, media, entertainment, and e-commerce.

Against that backdrop, HSBC has enhanced our offerings to digital-economy companies, launching a dedicated $1-billion Asean Growth Fund that can help finance companies with a proven track record in generating a sustainable cash flow stream.

Alongside our own efforts, it’s also great to see government programs leaning in to support startups for digital economy firms in the region and the Philippines.

The government has launched two landmark laws that define policy to foster the growth of tech startups through the Philippine Innovation Act and the Innovative Startup Act, both enacted in 2019 and designed to spur technological innovation to achieve economic growth and sustainable development.

Governments in Singapore, Indonesia, Vietnam, Thailand, and Malaysia have all also rolled out important incentives to foster innovation and the creation of tens of thousands of new technology startups.

Other governments in the wider region are taking note as well. A new $1.3-billion government fund was unveiled during an Asean-Australia summit in Melbourne in early March. The fund will provide loans, guarantees, equity, and insurance for projects that will boost the Asean-Australia corridor—something we see in action from visits around the region.

Smart strategy

To sustain their growth, digital economy companies will need to focus on controlling costs and lifting revenues. They must also reconsider their approach to funding to manage their cost of capital and secure their long-term viability.

Exploring partnerships with firms in other markets can also allow startups to expand across borders or develop their capabilities without having to make substantial investments themselves. Securing the right partner can also boost the credibility of a startup, enhance its appeal to customers, and—particularly relevant in the current climate—make it more attractive to potential investors.

Such intra-regional initiatives also align with the aims set out in Asean’s digital masterplan for 2025, which was reaffirmed at a meeting of the bloc’s digital ministers earlier this year.

As both Asean and the Philippine digital economy expand, cross-border e-commerce is also creating growth opportunities for traditional and new economy firms. Making it easier for customers—whether they are consumers or businesses—to pay through a company’s digital platforms can be an important revenue driver over the years ahead.

From winter to spring

While many digital economy firms in the Philippines and Asean found it challenging to raise capital in the past two years, there are reasons to be more optimistic in 2024.

The recovery is driving consumption among an increasingly affluent population of 670 million, as one person enters the middle-income bracket every two seconds on average.

The region also has one of the highest digital penetration rates in the world, with the Philippines ranking second globally and first in Asia for internet usage.

Hence, this is further increasing e-commerce, which has passed the $100-billion revenue mark last year. With progressive approaches to financing, the strong fundamentals of the region will help drive the growth ambitions of businesses in the Philippines. After all, after the funding winter comes a thriving spring. —Contributed

Under 30 Filipino Achievers in Forbes Asia

Forbes Asia's 30 Under 30: Meet the Filipinos in the Class of 2024

Story by Esquire Philippines 
16 May 2024

Every year since 2011, American business magazine Forbes publishes a list of notable people under 30 years old in various industries. It started with one list of 30, which later increased to a selection of 30 for each of the 20 categories. With nominations reaching tens of thousands, the annual set was eventually expanded to establish a by-continent list for Asia, Europe, Africa, and so on.

Now, we have Forbes Asia's 30 Under 30 list for the Class of 2024, which includes a diverse group of young Filipino innovators making waves across various industries. This prestigious list acknowledges the achievements of individuals who have made significant contributions to their fields, embodying the spirit of innovation and excellence.

Here are all the Filipinos in the Forbes 30 Under 30 Asia 2024 list:

Ezekiel Miller 

Category: Entertainment and Sports

Age: 25

Rapper Ezekiel Miller (a.k.a. Ez Mil) has been recognized for themes of Philippine nationalism in the track "Panalo." But it was "Up Down" that caught the attention of music legends Dr. Dre and Eminem, with the latter performing in Ez Mil's "DU4LI7Y: REDUX" album released in 2023. Miller was born in Olongapo and is now based in Las Vegas.

Mikaela Helene Reyes

Category: Finance and Venture Capital

Age: 29

Mikaela Helene Reyes is a co-founder of Manila-based cross-border payment startup Parallax, which is in the business of cryptocurrency and blockchain. The tech entrepreneur launched the startup in 2023 as a cutting-edge solution to the hassle of getting paid from another country, an issue she herself experienced after working as a freelancer. Parallax, which now has customers from over 150 countries, raised $4.5 million in seed funding through Dragonfly Capital.

Chia Amisola

Category: Media, Marketing, and Advertising

Age: 23

Internet artist Chia Amisola is an advocate for digital rights and Internet freedom. In 2016, she established Developh, which promotes the use of "technology as a tool for liberation rather than oppression" and aims to preserve "digital work, movements, cultures, and art" through the Philippine Internet Archive. Her most recent project, Ang Bantayog, is an online platform that commemorates the victims of human rights abuses in the 1970s under the Martial Law regime of former dictator Ferdinand Marcos Sr. (How about the human rights abuses after Marcos? Do they not deserve to be included??? - Zephyrr)

Amanda Cua

Category: Media, Marketing, and Advertising

Age: 21

Young entrepreneur Amanda Cua founded Backscoop, which is a newsletter that focuses on the startup scene, and its accompanying podcast called One More Scoop. These platforms allow startup founders to find investors, thus disrupting traditional business models and offering fresh perspectives and novel solutions.

Abigail Marquez

Category: Media, Marketing, and Advertising

Age: 23

Content creator Abigail Marquez is most known for the moniker Lumpia Queen after her content about the Philippine fried snack has gone viral on social media. Trained as a chef, she uses her cooking channel on TikTok to promote the Philippine food culture, share local recipes, and share her passion for food. She won TikTok's Creator of the Year for Food award in 2023 and is one of the Philippine nominees for the 2024 James Beard Awards.

Ramon Christian Larga

Category: Media, Marketing, and Advertising

Age: 27

Ramon Christian Larga (a.k.a. Arshie Larga) has made pharmaceutical information accessible to everyday Filipinos through his content on TikTok. His posts teach viewers about safe medicine in a funny way as well as raise funds to pay for the medicine of those who can't afford it. Larga is a licensed pharmacist who works in his family's pharmacy in Marinduque. He won TikTok Philippines' award for best educational content creator in 2023.

Joshua Serafin

Category: The Arts

Age: 28

Multi-disciplinary artist Joshua Serafin combines dance, live performance, visual arts, and choreography to explore concepts of cultural identity, transmigration, and queer representation. They are currently based in Brussels, where they are serving as a house artist of Viernulvier for the season 2023 to 2027. Serafin has been officially invited to participate in the 60th International Art Exhibition of La Biennale di Venezia curated by Adriano Pedrosa.

Forbes' 30 Under 30 methodology, according to the Forbes website, is: "Forbes Asia reporters and editors comb through thousands of online submissions, as well as tap industry sources and list alumni for recommendations. Candidates are evaluated by the Forbes Asia team and a panel of independent, expert judges on a variety of factors, including (but not limited to) funding and/or revenue, social impact, scale, inventiveness, and potential."

PH as education hub in Asia

Foreign student surge due to PH’s branding as education hub–BI

Story by Adrian Parungao 
Inquirer.net
15 May 2024

MANILA, Philippines — The rise in the number of foreign students in the Philippines was due to the country’s branding as a quality education hub in Asia, the Bureau of Immigration (BI) said on Wednesday.

According to BI Spokesperson Dana Sandoval, the agency observed a rise in the number of foreign nationals coming to study in the Philippines.

“There really was a rise in the number of foreign nationals — particularly Chinese — because the country was aggressively marketing the Philippines as an education hub in Asia,” Sandoval said in a forum.

Sandoval added that this was also in part of the move of the government to invite students to study in the country.

“There are efforts, really, by the national government in general to invite, because China is the biggest source of students worldwide,” she added.

In an earlier report, the BI said it issued more than 16,000 student visas to Chinese nationals in 2023.

Meanwhile, some government officials have expressed concern about the security issues that the influx of Chinese students may bring to the country, particularly in Cagayan Valley.

The schools in Cagayan Valley then responded in a joint statement in April that these allegations were based on racism and Sinophobia.

Philippines bank assets hit P25.6 trillion

Philippines bank assets hit P25.6 trillion

Story by Keisha Ta-Asan
Philstar Global
14 May 2024

MANILA, Philippines — Total assets of the Philippine banking system rose by more than 10 percent to breach the P25-trillion level in the first quarter of the year, according to the Bangko Sentral ng Pilipinas (BSP).

Banks booked an aggregate 10.8 percent growth in assets to reach P25.65 trillion as of end-March from P23.15 trillion in the same period in 2023, based on preliminary data from the BSP.

These resources include funds and assets such as deposits, capital, bonds and debt securities.

The growth in resources was fueled by the 10.6 percent expansion in the assets of universal and commercial banks to P24.08 trillion in the first quarter from P21.76 trillion a year ago.

Big banks accounted for 93.8 percent of the banking industry’s total assets as of end-March.

Similarly, the resources of thrift banks grew 8.8 percent to P1.05 trillion from P964 billion. Mid-sized banks cornered four percent of the overall banking resources.

The assets of rural and cooperative banks jumped by 15.8 percent to P425 billion in the January to March period from P367 billion a year ago.

The newer digital banking group also posted a 63.1 percent increase in assets, reaching P96.9 billion as of end-March from P59.4 billion a year ago.

As of December 2023, the country has 45 big banks, 42 thrift banks, 389 rural and cooperative banks as well as six digital banks under the BSP’s supervision.

Sy-led BDO Unibank Inc. stood as the number one bank with the largest resources at P4.28 trillion, followed by Land Bank of the Philippines with P3.27 trillion and the Ty Group’s Metropolitan Bank & Trust Co. with P3.06 trillion.

Other lenders in the BSP’s top 10 in terms of asset size are Bank of the Philippine Islands, China Banking Corp., Rizal Commercial Banking Corp., Philippine National Bank, Security Bank Corp., Union Bank of the Philippines and Development Bank of the Philippines.

Small Businesses Are Growing 'More Than Ever' in the Philippines

Small Businesses Are Growing 'More Than Ever' in the Philippines. Here's Why

Story by Currie Cator 
Esquire Philippines
13 May 2024

Four years ago, the pandemic forced millions of companies around the world to shut down, stripping many workers of their lifeline. Since then, a lot of people have turned to starting and growing their own businesses. One reason for this is seemingly to have some sort of a "fallback" or "backup plan" in case the same thing happens again.

For lending company Esquire Financing, which provides funding to small and medium enterprises (SMEs) in the Philippines, the pandemic triggered the entrepreneurial spirit of Filipinos, as it showed an opportunity for them to fill in for other people’s needs.

"Sabi nga nila (As they say), necessity is the mother of invention," Kendrick Co, head of strategic partnership at Esquire Financing, told reporters. "A lot of us started seeing kung ano ba ‘yung kailangan ng mga tao (what the people need) [….] and thinking: ‘Oh, I can fulfill that need.’"

"So, definitely, the pandemic left a big impact. Also, sabihin natin na (let’s say) before the pandemic, a lot of us are going to the office. Nung naka-experience ng work from home, ayaw nang bumalik, ‘di ba? So, parang, ano pang ibang option? (Once they experienced working from home, they didn’t want to return, right? So, what else is their option?) ‘Maybe I should start a business.’ People got into that rabbit hole of learning about entrepreneurship," Co added.

A study from recruitment platform JobStreet earlier found most Filipinos prefer a hybrid or remote work setup, which, for them, allows for more work-life balance. According to the poll conducted in 2022, 46 percent of workers are leaning toward a hybrid setup, or a combination of working from home and reporting to the office, whereas 28 percent prefer fully remote work.

But while uncertainty still remains for businesses, given the economic challenges, SMEs are actually doing better than expected. In the case of Esquire Financing, almost all of its borrowers are paying off their loans, it said. That’s even as these small businesses borrowed up to five times their original loans, which is quite a good sign for the economy.

"Over 98 percent have actually paid off," said Co. "They started with a small amount, and then, nakikita namin lumalaki ‘yung business (we see that their business is expanding), so they need more funding to continuously grow. So, on average, parang five times ‘yung re-loan or additional loan (they re-loan or get additional loan five times the original amount)."

Micro, small, and medium enterprises (MSMEs) grew to over 1.1 million nationwide in 2022, according to the Department of the Trade and Industry. This means 99.59 percent of businesses in the Philippines belong to the smaller group, contributing to more than half of the country’s overall employment. 

"I really think it has grown more than ever. You would see now different trends every season, but in terms of ‘are we growing,’ yes, we continuously grow," Trixie Esguerra-Abrenilla, CEO of Mediacom Solutions, Inc. and organizer of the 14th Philippine SME Business Expo, said on the sidelines of the event on Friday, May 10.

This continuous growth of SMEs is what pushes lenders like Esquire Financing to support more Filipino entrepreneurs. The company looks to provide P10 billion in loans to businesses this year from about P6 billion in 2023. Three to four years from now, Esquire Financing also expects to double or triple its current 30,000 client base to 100,000.

"We give out loans as low as P50,000 all the way to P10 million, unsecured. But we can go as [high] as P20 [to] P100 million. [….] So, it really depends on the need of the business," Co said, emphasizing the company has already lowered the minimum loan of P300,000 to P50,000.

Philippine partners with UK’s creative cities

Philippine partners with UK’s creative cities

Story by Louella Desiderio 
Philstar Global
13 May 2024

MANILA, Philippines — The Philippine Creative Industries Development Council (PCIDC), led by the Department of Trade and Industry (DTI), has forged partnerships with three of Scotland’s United Nations Educational, Scientific and Cultural Organization (UNESCO) – designated creative cities as part of efforts to support Philippine cities’ aspiring for creative city designation.

Under the Philippine Creative Industries Development Act, the PCIDC, which is chaired by the DTI, is mandated to establish the Philippine Creative Cities Network to help accelerate efforts for cities’ UNESCO creative city accreditation.

During the PCIDC delegation’s visit to the United Kingdom last May 8 to 10, meetings were held to discuss how to leverage the cities’ strengths, creative talents and assets to drive economic growth, while enhancing cultural enrichment and promoting social cohesion.

To help Philippine cities become UNESCO-designated creative cities, Trade Secretary Alfredo Pascual vowed to expand the opportunities for synergies between the Philippines and the UK’s creative cities.

In photo: DTI Secretary Fred Pascual and V&A Dundee Director of Operations Christian Moire

In photo: DTI Secretary Fred Pascual, Perth City of Craft and Folk Arts Anna Day, Dundee City of Design Annie Marr

“By taking inspiration from the best practices and innovative approaches of our British counterparts, we can adapt and tailor our strategies to address the unique challenges and opportunities present in our own creative cities,” he said.

There are currently three UNESCO-designated creative cities in the Philippines such as Baguio for crafts and folk arts (2017), Cebu for design (2019) and Iloilo for gastronomy (2023).

To enable other Philippine cities to become UNESCO-designated creative cities, the DTI is implementing the Lunsod Lunsad Program, which involves providing support and financial resources to cities that aim to position themselves as vibrant creative hubs.

To help cities harness the creative potential of their communities, the program provides capacity-building and facilitates access to funding.

Key officials of Abertay University in Dundee shared their strategies to promote industry-academe innovation partnerships for cultivating talent and driving growth in the game development and digital animation industries.

> photos from DTI website

PH, UN strengthens partnership to implement sustainable devt

PH, UN strengthens partnership to implement sustainable devt

Story by The Manila Times
13 May 2024

The Philippine government and the United Nations (UN) in the Philippines operationalized a strategic partnership toward achieving the UN's Sustainable Development Goals (SDG) and implementing the Philippine Development Plan (PDP) 2023-2028.

Held at the National Economic and Development Authority (Neda) Central Office on May 3, the inaugural meeting of the Joint Steering Committee (JSC) on the 2024-2028 UN Sustainable Development Cooperation Framework (UNSDCF) of the Philippines brought together key stakeholders, including the Philippine government and the UN, with the former represented by the National Economic and Development Authority (Neda) and the Department of Foreign Affairs (DFA).

The Terms of Reference (ToR) approved during the meeting outline the cooperation between the Philippine government and the UN under a new partnership for 2024-2028. This blueprint sets the stage for coordinated efforts to achieve the UN's SDGs while aligning with the country's PDP 2023-2028. Secretary Arsenio Balisacan highlighted the significance of this partnership saying, "The UNSDCF complements our national development plan, serving as a guiding framework that fosters synergy with the international community. By crafting the UNSDCF collaboratively, the government and the UN aim to maximize impact and create a harmonious approach to sustainable development."

During the meeting, the JSC also endorsed key documents from the Cooperation Framework and reviewed the current UN portfolio in the Philippines, focusing on human capital development, inclusion, and resilience building; sustainable economic development, decent work, and innovation; as well as climate action, environmental sustainability, and disaster resilience. Additionally, the UN Philippines presented an overview of resource requirements for the next four years, along with a joint work plan for 2024 that carries an estimated budget of $211 million.

NEDA presented the ToR for the JSC and the Joint Results Group (JRG), emphasizing the primary role of each JRG in facilitating the implementation of programming priorities and ensuring internal coherence. Foreign Secretary Enrique Manalo emphasized that the UNSDCF is anchored in the spirit of strategic partnership and collaboration, aligned with the Philippines' economic trajectory to become an upper-middle income country. He stressed that no strategic priority is self-contained, with each one contributing to attaining the country's mid-term and long-term priority development goals, as well as Ambisyon Natin 2040.

"We can all look forward to reaping the benefits of a partnership with the UN that is characterized by Philippine ownership of the process, greater transparency, as well as targeted programs and deliverables tailor-made for us to enjoy the benefits of the reformed United Nations development system," Secretary Manalo said.

The UNSDCF recognizes the Philippines' localization agenda of the SDGs and its transition toward achieving upper-middle income status to ensure that no one in the Philippines is left behind. Under this new modality of the UN organization, resources will be allocated to capacity development, technical assistance, policy advice, thought leadership, partnerships, and knowledge sharing.

"The CF marks the start of a new generation of UN-Government cooperation instruments, and with this change, we are innovating ways to enhance our collaborative work with the Philippine government as we shift from traditional development assistance to transformative strategic partnerships for policy and capacity development, knowledge generation and the leveraging of financial resources," stated UN Resident Coordinator in the Philippines Gustavo Gonzalez.

The UNSDCF was signed on October 24, 2023, by the Philippine government and the United Nations in the Philippines. The JSC serves as the main governing body of the UNSDCF and is a key mechanism for providing strategic direction and oversight for UN support in the country towards the joint development priorities outlined in the Cooperation Framework.