In the Philippines, the embedded finance industry is experiencing significant growth, with projections showing a 47.2% increase to reach $1.94 billion in 2024. This sector is expected to continue growing steadily, with a forecasted CAGR of 35.0% from 2024 to 2029, reaching $8.74 billion by the end of the forecast period.
One of the driving factors behind this growth is the country’s young, tech-savvy population with high smartphone penetration. This demographic, combined with a large unbanked segment, creates a favorable environment for embedded finance solutions. Embedded finance integrates financial services seamlessly into non-financial platforms, making services like payments, loans, and insurance more accessible and convenient for users.
Key drivers of the embedded finance market in the Philippines include rising mobile adoption, particularly for financial transactions, and the presence of a significant unbanked and underbanked population. Digital payment gateways have also played a crucial role in revolutionizing financial transactions in the country, with companies like D24, Dragonpay, PayMongo, PayMaya, and PesoPay leading the way.
Furthermore, there is a growing demand for financial services among Filipinos, including microloans, insurance, and investment options. Embedded finance meets these needs by offering financial services within the context of everyday activities, such as online shopping or ride-hailing services.
The regulatory landscape in the Philippines, particularly with the Bangko Sentral ng Pilipinas (BSP), has been supportive of fintech innovation. This has fostered collaboration between traditional financial institutions and fintech players, further driving growth in the embedded finance sector.
Major players in the Philippines’ embedded finance market include traditional financial institutions like Banco de Oro (BDO), Metrobank, and Land Bank of the Philippines, as well as fintech and technology companies such as Grab, Shopee, GCash, PayMaya, and Coins.ph. These companies are driving innovation and growth within the industry.
Overall, the embedded finance industry in the Philippines presents significant opportunities for growth and investment. With a comprehensive understanding of market dynamics, key trends, and forecasted growth, stakeholders can develop targeted strategies to capitalize on the potential of this evolving sector.