Philippine startup funding drops 32%: Gobi Partners report
2 min read
Investment Press Release
November 11, 2025
The Philippine startup sector faced a sharp funding contraction in 2025, with total investment falling 32% compared to the previous year and deal activity declining by 54%. This downturn stemmed from global financial tightening, waning investor confidence, and domestic governance challenges compounded by recent corruption controversies.
Despite financial headwinds, Filipino startups remain vital to the economy, contributing approximately 3% of the nation’s GDP and supporting nearly 200,000 jobs nationwide. Geographic diversification is accelerating, with burgeoning hubs emerging in Cebu, Davao, Iloilo, and Cagayan de Oro alongside Metro Manila.
A 2025 industry report by Gobi Partners, titled “Philippine Startup Ecosystem Report: The Next Wave of Innovation,” reveals the ecosystem’s shift toward an “Intelligent Era” fueled by artificial intelligence (AI), automation, and data-centric advancements. Key transformation areas include:
- Fintech: Expanded financial inclusion enabling innovative product cross-selling
- Healthtech and logistics: AI-driven diagnostics and demand forecasting
- Creative industries: AI-enhanced content development and global distribution
- BPO and knowledge services: Workforce upskilling through AI integration
The report stresses the urgent need for policy action to sustain growth, advocating for:
- Streamlined regulatory pathways for startups with robust governance practices
- Enhanced ESG incentives to restore investor trust
- National reskilling initiatives to prepare workers for AI-driven roles
- Stronger alignment between government, academia, and industry to develop cohesive strategies
Gobi Partners’ leadership highlighted the Philippines’ potential amid current challenges. Co-founder Thomas G. Tsao emphasized the nation’s “exceptional talent, resilience, and creativity” as foundations for regional innovation leadership. Carlo Chen-Delantar, partner and ESG lead at Gobi-Core Philippine Fund, noted that today’s decisions on policy, capital allocation, and workforce development will determine the country’s position in Southeast Asia’s digital transformation.
While funding constraints pose immediate hurdles, the ecosystem’s pivot toward AI, expanded regional footprint, and proposed governance reforms signal long-term resilience and adaptability.
