Philippine startup funding drops 32%: Gobi Partners report
- ByStartupStory | November 11, 2025
The Philippine startup ecosystem experienced a significant decline in funding in 2025, with total capital raised falling by 32% year-on-year and deal volume dropping 54% compared to 2024. This downturn is attributed to tighter global liquidity conditions and reduced investor confidence, exacerbated by governance issues and recent corruption scandals.
Despite the funding slowdown, Filipino startups continue to contribute substantially to the national economy, accounting for about 3% of the Philippines’ nominal GDP and generating nearly 200,000 jobs across the country. The startup activity is expanding beyond the traditional hub of Metro Manila, with emerging ecosystems growing in Cebu, Davao, Iloilo, and Cagayan de Oro.
Gobi Partners’ “Philippine Startup Ecosystem Report 2025: The Next Wave of Innovation” highlights that the ecosystem is entering an “Intelligent Era” driven by rapidly increasing adoption of artificial intelligence (AI), automation, and data-driven industries across sectors. Key areas poised for transformation include fintech innovation with broader account ownership enabling cross-selling of financial products; healthtech and logistics leveraging AI-powered diagnostics and forecasting; creative industries utilizing AI for content creation and global distribution; and BPO and knowledge services advancing through AI-augmented upskilling.
The report underscores the critical role of government and coordinated policy interventions to sustain momentum, including:
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Establishing “green lanes” for startups practicing high governance standards
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Introducing stronger environmental, social, and governance (ESG) incentives to rebuild investor trust
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Implementing nationwide reskilling programs to prepare the workforce for AI-powered roles
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Enhancing collaboration between academia, government, and industry to develop a unified startup roadmap
Gobi Partners co-founder and chairman Thomas G. Tsao emphasized the Philippines’ talent, resilience, and creativity as key strengths to lead Southeast Asia’s next chapter of innovation. Meanwhile, Carlo Chen-Delantar, partner and head of ESG & Circular Economy at Gobi-Core Philippine Fund, highlighted that policy, capital, and talent decisions made today would determine whether the Philippines leads or lags in the region’s digital transformation.
While the dip in funding presents near-term challenges, the Philippine startup ecosystem’s shift toward AI and digital industries, along with expanded geographical reach and government support proposals, signal a promising path forward amid evolving industry dynamics.
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