The Philippines is experiencing a significant growth in the embedded finance industry, with projections showing a 47.2% increase to reach US$1.94 billion in 2024. This industry is expected to continue growing steadily, with a forecasted CAGR of 35.0% from 2024 to 2029, reaching US$8.74 billion by the end of the forecast period.
One of the key drivers of this growth is the rising mobile adoption in the country. With a high smartphone penetration rate, Filipinos are increasingly comfortable conducting financial transactions through their mobile devices. Embedded finance seamlessly integrates financial services within these platforms, making it convenient and accessible for users.
Moreover, a significant portion of the Philippine population remains unbanked or underbanked. Embedded finance offers them an alternative entry point into the financial system, bypassing traditional banking channels. This is crucial as almost 44 to 50% of Filipino adults are unbanked, according to the Bangko Sentral ng Pilipinas.
Major fintech companies are also boosting the payment gateway ecosystem in the Philippines, revolutionizing the way individuals and businesses manage their finances. Companies like D24, Dragonpay, PayMongo, PayMaya, and PesoPay are playing a vital role in this transformation.
Overall, the Philippines’ embedded finance market is a dynamic space with a mix of established players and innovative startups driving growth. Traditional financial institutions, payment networks, e-commerce platforms, ride-hailing services, wallet providers, and fintech startups are all contributing to the expansion of embedded finance in the country. With a supportive regulatory landscape and a growing demand for financial services, the future looks promising for the embedded finance industry in the Philippines.