Philippine ICT Market

The Philippine ICT market segmentation, based on Type, includes Hardware, Software, IT Services, and Telecommunication Services. The telecommunication services segment dominated the market mostly. The growth of the telecom industry is primarily attributed to the expanding population and the increasing adoption of mobile phones supporting 3G, 4G, and 5G services nationwide. For instance, PLDT is a fast-tracking network modernization initiative transitioning from copper to fiber infrastructure. Simultaneously, notable advancements in 5G technology have been made.

DITO Telecommunity reports deploying over 30,000km of fiber-optic cabling to connect the country's three major islands and erecting more than 5,500 mobile towers, linking over 600 cities and municipalities. These broadband expansions are poised to propel growth in the Philippine ICT market, presenting new opportunities for telecom investments. According to the Ookla Speedtest Global Index, the Philippines ranked 54th in October 2022, boasting a median fixed broadband download speed of 71.70 Mbps. With smartphone penetration on the rise, there is a significant surge in demand for high-speed wireless services.

The Philippine ICT market segmentation, based on the Size of Enterprise, includes Small and Medium Enterprise and Large Enterprise. The small and medium enterprise generated the most income. According to the World Bank (2022), both remittances and significant consumer demand have played pivotal roles in fostering economic growth in the Philippines, with an average annual growth rate of 6.4% from 2010 to 2019. As urbanization in the country continues to rise, entrepreneurs, especially small and medium-sized enterprises (SMEs), have become increasingly crucial to the nation's economic development.

As per the 2022 List of Establishments (LE) by the Philippine Statistics Authority (PSA), there were a total of 1,109,684 active business enterprises in the country. Among these, 1,105,143 (99.59%) were categorized as MSMEs, while 4,541 (0.41%) were classified as large enterprises. Micro enterprises constituted the majority at 90.49% (1,004,195 establishments), followed by small enterprises at 8.69% (96,464 establishments) and medium enterprises at 0.40% (4,484 establishments).

The Philippine ICT market segmentation, based on Industry Vertical, includes BFSI, IT & Telecom, Government, Retail and E-commerce, Manufacturing, Energy and Utilities, and Other Industry Vertical. The BFSI generated the most income. The BFSI category in the Philippines is undergoing rapid evolution, propelled by increasing mobile penetration, the growth of Fintech, and accelerated technology adoption. According to the BSP (Bangko Sentral ng Pilipinas), the banking system's total assets are projected to experience significant growth, increasing from PHP 23.7 trillion in 2021 to PHP 26.5 trillion by the end of 2023.

Digital advancements in the BFSI sector have effectively addressed commonly cited barriers to owning a transaction account and have reduced transaction costs. The technological revolution has undoubtedly enhanced the efficiency of financial institutions and facilitated significant improvements in banking operations.

Emerging technologies like artificial intelligence, cloud computing, and the Internet of Things (IoT) are driving innovation in the ICT sector and creating new opportunities for market expansion. A 2020 report by EDBI and Kearney indicates that AI is forecasted to contribute to a 12% increase in the Philippine GDP by 2030, amounting to $92 billion. Additionally, a survey conducted in November 2021 by a global cybersecurity firm among 500 respondents from five ASEAN countries, including the Philippines, revealed that 64% of Filipino participants had increased their cybersecurity budgets for the upcoming year.

The survey highlighted that Filipino companies focused on enhancing cybersecurity through various measures, including identity and access management (57%), cloud security (55%), threat detection and correlation systems (42%), fifth-generation (5G) security strategies (42%), and internet of things (IoT) or operational strategies (39%). Furthermore, software-defined area network security is gaining traction in the market due to the growing reliance on cloud storage and solutions.