April 10, 2019
Over the next few weeks, MEDICI brings you a series of articles, exploring FinTech in the ASEAN region. These articles, each focused on a different ASEAN country, provide comprehensive insights into the FinTech investment landscape in the region.
ASEAN in Figures
ASEAN (the Association of Southeast Asian Nations) is the third-largest region in Asia. It is home to more than 630 million people with one-fourth of the population living in urban areas. ASEAN has an annual growth rate of 4.7% and has USD 119.97 billion in FDIs; it is also one of the fastest-growing regions as well as the seventh-largest economy globally.
Its population is young and educated with a literacy rate of over 80%, phone-savvy with more than 0.5 phones per person, and enjoys a low-to-mid unemployment rate of 0.5–6.9%. ASEAN members also have an average to a high life expectancy of 69–82.7 years, and a gender parity of 49.9% males to 50.1% females.
Until now, we’ve taken a close look at the FinTech landscapes of ASEAN countries including Thailand, Singapore, Vietnam, and Indonesia. In this article, we examine another country in the region, from a FinTech investment perspective – the Philippines.
The Philippines’ population passed 100 million in 2014 with about 44% living in urban areas. With one phone per person and 40% of the population connected to the internet, the country shows high connectivity penetration. Adult literacy is also high at >95%. These growth drivers have set up a favorable environment in the country.
However, the unemployment rate is high at 6.5% with life expectancy is relatively low at 70.4 years. In terms of ease of doing business, if foreign ownership is allowed at the height of 100% and corporate tax at 30%, the country ranks at number 99 globally.
The economic growth was moderated to 5.9% in 2015 amid weak external demand and damage to agriculture inflicted by typhoons & drought from El Nino. Besides, robust growth in overseas Filipino remittances continued to provide support to the country’s economy. Growth in private consumption, which accounts for nearly 70% of GDP, accelerated to 6.2% and made the most significant contribution to the overall increase.
According to the IMF, GDP went up by 5.8% in 2016 and by 6.2% in 2017, underpinned by growth in domestic demand and election-related spending. The country is forecasted to become a $1-trillion-dollar (USD) economy by 2030.