The Philippines is cementing its place in regional venture capital

THE PHILIPPINES is making waves in Southeast Asia’s venture capital scene. A record-breaking $1.12 billion in deals in 2024 signals a maturing startup ecosystem, drawing international investors and shifting the region’s investment balance. But beyond the headline numbers, a deeper question remains: how do Filipinos ensure that this is sustained dominant and not just a cyclical peak?

- Bea Mantecon and Lance Katigbak

Our recent report, “The Philippine Venture Capital Report 2025,” published by Foxmont Capital Partners and Boston Consulting Group (BCG), reveals a striking shift: the Philippines captured 19% of total funds raised in Southeast Asia in 2024, up from just 5% three years prior. This jump isn’t just about quantity — it reflects a qualitative evolution. The ecosystem is moving beyond early-stage bets to larger, growth-stage deals exceeding $20 million.

Fintech continues to lead the charge, but direct-to-consumer and cleantech sectors are gaining momentum. More significantly, foreign investment inflows surged 45%, signaling confidence that the Philippines is no longer just a frontier market but a core player in Southeast Asia’s economic engine.

With growing interest from international investors, now is the perfect time to examine how local startups have adapted — and must continue to adapt — to a evolving market. In this case, we look at the potential of the rising middle class.

ENGINE OF TRANSFORMATION

Beyond venture capital, the Philippines’ economic landscape is being reshaped by a rising middle class. Since 2012, middle-income groups have expanded from 42% to 47.5% of the population, while the lowest-income bracket shrank by 39%. This shift isn’t just about statistics — it’s about behavior.