THE country’s startup ecosystem is slowly building momentum with more incubators, innovation laws and agency-led programs, but investors and officials warn that the lack of dedicated funding, overlapping mandates and fragmented coordination continue to hold back growth.
Speaking at the Geeks on a Beach Technology Conference in Cebu on Thursday, Oct 2, 2025, at JPark Island Resort and Waterpark Mactan-Cebu, government leaders and private sector stakeholders acknowledged that while the 2019 Innovative Startup Act and the Philippine Innovation Act created frameworks to nurture entrepreneurship, both laws failed to secure guaranteed budget allocations.
Instead, agencies such as the Department of Science and Technology (DOST), the Department of Information and Communications Technology (DICT) and the Department of Trade and Industry (DTI) have been pooling resources from existing programs.
“Funding remains the biggest challenge,” said Jojo Flores, co-founder of Plug and Play Tech Center and a private sector representative to the Startup Act Council. “The laws are there, the infrastructure is there, but without a dedicated budget, it’s difficult to implement programs at scale.”
Progress
Even so, progress has been visible. From only 12 incubators before 2019, the country now has 81 across universities and regional hubs, said Russell Pili, DOST’s chief technology transfer officer. These incubators have supported 103 startups with P398 million ($6.8 million) in prototype funding. The DICT has also launched a seed grant program, providing P1 million each to 19 early-stage ventures since 2024. DTI, for its part, has prioritized scaling and helping startups access larger markets.
Despite these gains, agency representatives said scattered programs and manpower shortages make it difficult for startups to navigate government support.
“Startups sometimes don’t know which agency to approach because programs are scattered,” said DOST senior researcher Edward Paul Apigo. Pili added that most of DOST’s budget is restricted to research, not venture support, requiring officials to “justify every peso” in terms of jobs or research and development outcomes.
Call for one organization
To address fragmentation, DICT has called for the creation of a single umbrella organization that could serve as the startup community’s unified voice for policy, funding and legislation.
“If there’s one strategic step we need, it’s creating a single organization that can speak for startups,” said Emmy Lou Delfin, director of DICT’s ICT Industry Development Bureau. She noted that the IT-BPM industry grew into a $32-billion export sector precisely because of strong representation through industry associations.
DICT officials stressed their commitment despite budget gaps, pointing to flagship initiatives such as Trabaho Digital, which aims to generate eight million digital jobs over the next three years through IT-BPM, e-commerce, freelancing and startups. The agency is also running the Digital Startup Development and Acceleration Program, offering mentorship, awareness campaigns and regional outreach.
But challenges remain structural.
DICT assistant division chief Jeehad Januar Tanggol said their startup grant fund has struggled with delays in regulatory approvals, limiting the number of cohorts they can support.
“Every year, we want to expand the number of startups under the DICT grant fund,” he said. “But initial difficulties slowed us down.”
Private sector investors urged the government to think bigger. Flores pointed to global comparisons, noting Alphabet Inc.’s market capitalization is 40 times the size of the Philippines’ entire IT-BPM sector. He cited Estonia, with a population of just 1.2 million, which has produced 10 unicorns thanks to aggressive state backing and early wins such as Skype.
For the Philippines, the opportunity lies in layering technology on top of its strengths in services such as business process outsourcing, electronics manufacturing and overseas worker remittances.
“We are already strong in services,” Flores said. “The next step is to layer technology on top of that.”
Panelists emphasized that regional incubators outside Metro Manila have expanded opportunities for founders, but sustaining them will require stronger and more stable financing. Without it, startups will struggle to scale beyond the prototype stage.
Digital bayanihan
DICT called for “digital bayanihan” -- collective action among government, private investors, universities and entrepreneurs -- to sustain momentum. Officials said closer coordination and unified representation could help secure budget lines and channel resources more effectively.
Still, the gap with Asean peers underscores the urgency. While Singapore and Indonesia have each produced multiple unicorns, the Philippines has yet to foster one at scale. Without stronger investment pipelines and policy clarity, officials warned, Philippine startups risk being confined to niche players rather than global disruptors.
“Other countries have proven that government backing, coupled with early wins, can transform ecosystems,” Flores said. “For the Philippines, the question is how quickly we can align resources and ambition.” / KOC