Public and private efforts to support local technological innovation in the Philippines

The Philippines’ tech start-up scene is on the cusp of taking a major leap forward, as the support infrastructure and ecosystem to finance and bring ideas to market takes shape. To date, the most successful ideas to hit the market have been adaptations of Western-conceived innovations, such as local versions of taxicab ordering services. But slowly and surely, creative solutions to uniquely Filipino and developing market challenges are being germinated.

The next phase of evolution, which is being bolstered by the establishment of several incubation centres and accelerators, is for the Philippines to mature into a place where innovative ideas are not only developed, but also successfully exported across the globe. “If you want an app or technology to go global, you also have to spend money on marketing it globally,” Cyril Rocke, CEO of cloud provider DataOne Asia, told OBG.

ELEMENTS IN PLACE: Despite only 37% of Filipinos having access to the internet, more than 90% of all active internet users (over 30m) are on Facebook and the country has the 10th-largest number of Twitter followers of anywhere in the world (9.5m), demonstrating a significant domestic market for social media and mobile applications. With an average age of 26, the country also possesses a favourable demographic dividend when it comes to technology creation, as much of the globe’s emerging and disrupting technology firms tend to be started by younger founders.

The Philippines also has a large and active diaspora community, with over 3m Filipinos in the US alone. As the country’s economy expands and exciting business prospects emerge, many expatriates, a number of whom have achieved success in Silicon Valley and other tech hubs, are either returning home or creating VC funds to lend their support and take advantage of their country of origin’s creative potential.

LENDING SUPPORT: One such example is Paul Monozca, a Filipino national who made his fortune in Singapore in the 1990s by developing a bill payment system used by automated teller machines. In March 2014 Monozca, through his self-named foundation, launched what is expected to become Asia’s largest incubation facility for supporting tech-related small and medium-sized enterprises. The facility is expected to house over 200 firms, offering them support services such as branding, marketing, packaging and distribution, in addition to funding and office space, Another foreign-linked institution joining the fray is the Founder Institute, a Silicon Valley-based entrepreneur training and startup launch program that opened a Manila chapter in 2014.

INCUBATING SUCCESS: The local incubator space is dominated by the country’s two largest telecoms firms, Globe Telecom and the Philippine Long Distance Telecom Company (PLDT). Kickstart Ventures, a wholly owned subsidiary of Globe Telecom, has to date invested in 17 startups. While PLDT subsidiary Smart Communications is behind the IdeaSpace incubator that has so far committed $12,000 to each of the first batch of 10 “civic-minded” ventures being incubated. “Because both telecoms firms are aligned to diversified conglomerates, this provides the start-ups with instant market access as they can help breed ideas that can be used by one of their affiliated banks, hospitals or utilities,” George Royeca, business development associate at technology conglomerate IPVG Corporation told OBG.

The government is also doing its part, with the Department of Science and Technology and the Philippine Economic Zone Authority joining forces to provide legal, marketing and technological assistance to startups that demonstrate potential in the field of “open technologies”. The University of the Philippines, the largest public university in the country, has an in-house incubation programme with 12 startups currently under its portfolio. “In the future, we aim to set up a dedicated advisory council that will harmonise all private and public incubation firms to ensure that efforts are synched,” Monchito Ibrahim, deputy executive director at the Department of Science and Technology’s Information and Communication Technology Office, told OBG.