From assemblers to innovators: Phl’s next innovation frontier

The Philippines has broken back into the top 50 of the Global Innovation Index (GII) 2025, placing 50th out of 139 economies. We climbed three notches in just two years, an impressive feat in a crowded field where many middle-income economies struggle just to hold their ground. Even better, we rank third among lower-middle-income economies, with performance rated higher than expected for our level of development.

This puts us a mere seven spots away from our 2028 target of landing 43rd under the National Innovation Agenda and Strategy Document (NIASD) 2023-2032 and the Philippine Development Plan 2023-2028.

Surely, there is reason to cheer. The Philippines has long shown a knack for turning modest innovation investments into tangible results. We outperform several regional peers and remain globally competitive in industries that matter for future growth. Yet, as with a house built on soft soil, the celebration is tempered by cracks in the foundation. The GII tells us both where the light shines and where shadows linger.

Punching above weight

The country’s most significant strengths remain in the commercialization and diffusion of technology. We ranked first in the world for high-tech exports as a share of total trade, proof that Philippine manufacturing, particularly in electronics and semiconductors, remains globally competitive.

We are fourth in high-tech imports, signaling strong integration into global value chains. Utility models are another strength, ranking seventh, suggesting innovators are filing practical, small-scale innovations with real-world applications.

Creative industries also pulled their weight. Creative goods exports (16th) and ICT services exports (20th) highlight a strong digital economy and cultural output. Business sophistication indicators, such as university–industry R&D collaboration (23rd) and the state of cluster development (27th), suggest that linkages between academia, business, and industry are maturing.

As former director General of IPOPHL, I take pride in the role of our Innovation and Technology Support Office (ITSO) program in nurturing such linkages.

By empowering ITSO partners to assist communities, from filing IP to commercialization, we also enable them to develop institutional IP policies that facilitate smooth collaboration while protecting inventors’ rights.

Taken together, these drivers show that when it comes to output, the Philippines knows how to transform global linkages into measurable gains. We ship out high-value products, scale tech services, and export not just goods but creativity.

Where foundations are weak

Still, behind these bright spots lie chronic weaknesses. The Philippines ranked 90th in human capital and research, a sobering reminder of how fragile our education and R&D systems remain. Public spending on education is modest at 3.6 percent of GDP (92nd). Students score poorly in PISA scales in reading, maths and science (83rd), classrooms remain overcrowded (118th in pupil-teacher ratio), and researchers are scarce, just 170 per million people (86th). Gross expenditure on R&D lingers at 0.3 percent of GDP (74th), far below the two percent benchmark common among innovation leaders.

Infrastructure, ranked 65th, drags as well. Electricity output is low (99th), broadband use is weak (ICT use, 89th), and ecological sustainability is near the bottom. Institutions do little to inspire confidence, with rule of law (91st) dragging the country down. These gaps show that while we shine in exports and creativity, the scaffoldings of innovation — schools, labs, infrastructure, governance —remain unfinished.

Elements for lasting success

Today’s overperformance is built on integration into global markets, not on homegrown depth. We are good at joining global innovation networks, but still weak at building our own. We can export semiconductors, but not yet design the next chips; we can create mobile apps, but struggle to scale global unicorns.

This duality leaves us with a clear two-track agenda: sharpen our edge in electronics, ICT, and creative industries, while closing the gaps in education, R&D, infrastructure, and governance.

The GII 2025 shows that the Philippines can compete with the world. But also warns that without stronger roots, our bright sparks risk fading into smoke. The task ahead is to lay down the right elements for a lasting story of success.

So that the Philippines moves from being a footnote in the global innovation narrative to one that authors its own chapters.