The Philippine digital economy is on track to reach $36 billion in gross merchandise value by 2025, sustaining one of the strongest growth trajectories in Southeast Asia, according to the latest e-Conomy Southeast Asia Report by Google, Temasek and Bain & Company.

The 10th edition of the study shows the country posting 16 percent year-on-year growth, powered by expanding e-commerce, widespread digital payments, and rapid consumer adoption of artificial intelligence. Analysts say the trend reflects both rising spending power and deeper integration of digital services into daily life.

E-commerce remains the dominant force, accounting for more than 60 percent of the sector’s total value.

A major driver is the boom in video-based selling. The report estimates around 475,000 sellers now use livestream and short-video platforms — a 90 percent increase from 2024 — generating 1.2 billion transactions, up 35 percent year-on-year.

Fashion, accessories, beauty and personal care make up nearly half of the category’s contribution.

Online travel likewise rebounded, contributing $4 billion to local GMV in 2025 amid stronger regional mobility and higher airfare prices.

Online media posted double-digit gains as advertising and gaming revenues climbed, making the Philippines one of the fastest-growing media markets in Southeast Asia.

The country also ranks as one of the region’s most active users of digital financial services.

Digital payments grew 20 percent to $150 billion in transaction value, while digital wealth products surged 36 percent and insurance 27 percent, reflecting increasing financial maturity among Filipino consumers.

Artificial intelligence is emerging as a central driver of digital behavior. The Philippines ranks among the top 20 global markets showing interest in multimodal AI tools.

About 78 percent of Filipino digital users report using AI features for content discovery and productivity, while 43 percent say time savings is the primary benefit. Enrollment in generative AI courses grew 4.8 times, signaling aggressive upskilling in the workforce.

Apps promoting AI capabilities also recorded a 79 percent increase in revenue, as users paid for features offering faster comparisons, better deals and enhanced fraud protection.

High trust underpins this trend, with 94 percent of Filipino respondents saying they are willing to share data access with AI agents.

Google Philippines country manager Prep Palacios said the country is “a digital powerhouse… preparing for the dawn of the new era: AI,” while Bain & Company partner Bennett Aquino said the real challenge is how firms “harness AI as a catalyst for impact while addressing the country’s structural realities.”

The report concludes that the Philippines’ strong consumer base and accelerating AI adoption position the digital sector for sustained expansion through 2025.