Wallex Industry Insights: Philippines

The Philippines is well known as a hub for BPO (business process outsourcing) and for the strength of its tourism industry. What is not as well known is that the creative economy is one of the country’s latest and most promising growth sectors.

In 2022, the creative economy grew 12% year-on-year and was estimated at around PHP 1.60 trillion. It currently contributes about 7.3% to the country's GDP and employs approximately seven million Filipinos. It was the second top-performing economic sector in 2023 in terms of growth, with a stunning year-on-year growth of 15.5%.  

So what exactly does the creative economy include? What is being done to support its growth? How can it make a difference for your business? We answer all these questions in this edition of the Wallex Industry Insights!

What is the Creative Economy in the Philippines?

The creative economy in the Philippines refers to the different industries that intersect creativity, culture, and commerce. According to the Philippine Statistics Authority (PSA), the sector encompasses motion picture production and distribution, animation, radio and television activities, sound recording activities, dance, theatrical, and concert productions, sculpting and painting, sports, museums and galleries, and other entertainment and cultural activities.  

It also includes advertising, architecture, arts and crafts, design, film and video, music, performing arts, publishing, software, games, and interactive media.

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Understanding the Economic Engine of the Philippines

Because the creative economy spans such a vast number of categories, it plays a vital role in the Philippines' economic growth and contributes to job creation, tourism development, and foreign exchange earnings in currencies including SGD, USD, AUD and MYR.  

In terms of output, symbols, images and other related activities accounted for 32.9% or PHP 528.35 billion to the total creative economy in 2022. This surpassed the entire size of the creative economy in 2021, which stood at PHP 480.41 billion, by 10%. Advertising, research and development, and other artistic service activities contributed 20.8% while digital interactive goods and service activities represented 20.3% of the creative economy.

The Philippine creative economy is characterised by its diverse and vibrant cultural heritage, rich traditions, and innovative spirit. Filipino creatives have been recognized globally for their talent, ingenuity, and passion.

Growth of the Creative Economy in the Philippines

The creative economy in the Philippines has experienced substantial growth in recent years with a CAGR of 11.2% from 2015 to 2019. Based on the Philippine Statistics Authority, the creative economy's contribution to the country's GDP increased from 7.34% in 2013 to an estimated 7.91% in 2019, showing its significance as a driver of economic growth.

The film, music, graphic design, and advertising industries have been at the forefront of the creative economy's growth. For instance, the Philippines' animation and game development industries have also flourished, with annual revenues of approximately $200 million. In addition, digital content creation and social media have opened up channels for Filipino creatives, which contributed to the creative industry's growth.

The potential for further development of the creative economy in the Philippines is vast. Collaboration with various industries such as tourism, manufacturing, and technology, could enhance the sector's capabilities even more. In addition, the rise of creative spaces and co-working areas in the country can provide platforms for professionals to network and showcase their work, ultimately contributing to industry expansion.

Government Support for the Creative Economy

The Philippine government recognises the importance of the creative economy and is committed to supporting its growth. To this end, various initiatives have been implemented to promote and nurture creative industries and encourage innovation.

Implementation of Government Policies

Several measures have been taken by the government in a bid to support the continued development of the creative economy. In 2022, the Philippines Creative Industries Development Act was enacted with a goal to spearhead the development and promotion of the country's creative industries in the Philippines. The Act will build programmes that creates opportunities and employment, nurtures talent, establishes financial-enabling mechanisms, and provides incentives to encourage and sustain Filipino excellence in the creative industries.

Under the Act, entities from the creative industries may tap on the research and development (R&D) support programme of the Department of Science and Technology (DOST) that provides financial support to projects addressing the industry's needs through science and technology interventions. They will also be granted access to digital services and training platforms.  

One notable step is the setting up of the Creative Voucher System to provide a systematic way of granting support, aid, and other incentives to creative industry entities - with a preference towards MSMEs. Creative vouchers will be issued to stakeholders from business support organisations and creative workers associations in the creative industries, which makes them eligible to receive the support, aid, and incentives from the various government agencies.  

Extensive Funding Programs

The Philippine government provides funding assistance to creative industries through various programs. The Department of Trade and Industry (DTI), for instance, had announced a PHP 20 million fund for 2023 to give startups in the creative industry a jumpstart.

However, the DTI is currently seeking more funding for the creative sector to maintain the country's regional lead in exporting creative services. Previously, the DTI received over PHP 400 million from the 2023 budget for the industry, and is now requesting up to PHP 600 million for 2024. The funds are earmarked for programmes that will promote creative industries at the city and municipality level, capacity-building, market intelligence reports, and a creative venture fund.

The DTI also offers the Pondo sa Pagbabago at Pag-asenso (P3) program, which provides the most underserved entrepreneurs across the country with low-cost loans at only 2.5% interest per month.

The Malikhaing Pinoy Program

To foster a vibrant and conducive environment for creativity to flourish, the Philippine Creative Industries Development Council (PCIDC) came up with the 'Malikhaing Pinoy Program' (Creative Philippines), consisting of multiple strategic programmes including infrastructure development, digitalisation initiatives, establishment of creative cities, and assistance for exports and investments.

The DTI has already spearheaded efforts with the Fiesta Haraya'— regional creative festivals held across the nation as a platform for local artistic communities and talents to showcase their skills and creativity through exhibitions, training sessions, and conferences.

Another initiative is the 'Lunsod Lunsad Program', which aims to contribute to the establishment of more creative cities by enriching cultural and creative landscapes. It seeks to empower creative sectors as a driving force for socio-economic growth within local communities.

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How international businesses can tap on the creative economy in the Philippines?

While the creative economy encompasses a vast range of activities and services, the ones that businesses are more likely to be interested in include architecture, advertising services, publishing, audiovisual and digital media, as well as software and game development.

Collaborating with Filipino companies specialising in these capabilities can give you a serious leg up on the competition with fresh perspectives, unique ideas, allowing you to differentiate your business from competitors and attract customers who are seeking something new and exciting – and all for a fraction of the cost.

Additionally, the creative economy can open up new international markets for your business. For example, if you are a regional business looking to expand into the Philippines or tap on the country’s creative talents, you will need to pay in PHP. This means converting SGD to PHP, USD to PHP, AUD to PHP, or EUR to PHP for smoother transactions.

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Capture the Philippines’ creative spark for your business with Wallex

Wallex is designed to help businesses like yours convert and send money to the Philippines with better speed, support and savings. Our fully digital platform makes payments to the Philippines fast and seamless, whether you’re converting SGD to PHP, USD to PHP, AUD to PHP, or other currencies.  

Settlements take no more than two business days and with our global network of liquidity providers you’ll get the most competitive FX rates, zero hidden fees, and maximum savings.  

What truly makes Wallex the ideal partner for your cross-border needs is the support you’ll enjoy from your dedicated Account Manager. They will always be ready to support your business’s needs, assist to expedite urgent transactions, and address any issues you face.  

Are you ready to capture the Philippines’ creative spark? Speak with us today!

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