Digital payments and AI adoption are driving growth, and long-term prospects remain promising, the report says
The Philippines’ digital economy is on track to reach USD42 billion in gross merchandise value (GMV) by the end of 2026, up 15 percent year on year from USD36 billion in 2025. It is currently projected to reach as high as USD157 billion by 2035, according to the 11th annual e-Conomy SEA report released by Google, Temasek, and Bain & Company.
This year’s report, titled “Building the Intelligent Economy,” found that the Philippines’ digital economy continues to accelerate, increasingly helped by AI adoption and usage as a growth lever. Despite geopolitical and macroeconomic headwinds, the outlook for the long-term growth of AI and the digital industry is optimistic. The report points to policy support, including the 2026 launch of the National AI Center for Research and Innovation, new National Privacy Commission frameworks, and the Internet Transactions Act, as well as evolving Filipino user behavior.
To measure the true scale of adoption, the report introduces AI usage, quantified in tokens, as the AI equivalent of gross merchandise value. In the Philippines, GenAI has already reached mass-market scale, with 53 percent of the working population actively using standalone GenAI platforms. The country also offers some of the region’s largest headroom for future user and enterprise growth.
AI ADOPTION AND CONSUMER TRUST ARE SCALING FAST
Some 42 million Filipinos now use GenAI, generating 55 billion annual AI queries. Including embedded AI, the number rises to around 65 million monthly AI users. One in four AI users in the Philippines interacts with AI tools every day.
Consumer confidence is also rising fast. One in two users trusts AI more than the previous year, and seven out of 10 are willing to delegate purchase decisions to AI.
HIGH-VALUE PROFESSIONAL USE CASES LEAD
While broad adoption has taken off, a substantial opportunity remains to deepen everyday AI engagement. Although 33 percent of consumer journeys in the Philippines begin with AI, Filipinos currently average around 1.87 AI sessions per week and 13 million consumer tokens per GenAI user.
Reflecting the country’s strong English proficiency, most Filipinos prefer conversing with AI in English, with local-language prompts accounting for 21 percent of conversations. Filipinos also stand out across Southeast Asia for creative and professional applications: Gemini prompts for customer support content are nearly three times the regional average.
The dominant use cases remain in the creative and professional fields. The top five uses of AI are, in order, study, work, health, online shopping, and entertainment. Consumer applications account for around 80 percent of AI usage in the Philippines.
ONLINE SECTORS CONTINUE TO GROW
GMV growth in the Philippines is mainly driven by ecommerce, online travel, and online media:
- Ecommerce: Up 15 percent year-on-year to USD28 billion in 2026
- Online travel: Up 14 percent to USD3 billion, accelerating from 9 percent growth in the previous year
- Online media: Up 26 percent to USD6 billion, versus 23 percent growth the previous year
- Mobility and food: Up 2 percent year-on-year to USD4 billion, projected to reach USD7 billion by 2030 and USD11 billion by 2035
DIGITAL PAYMENTS ARE DRIVING DIGITAL FINANCIAL SERVICES
The expansion of digital financial services continues, driven by digital payments. Growth surged to 23 percent year-on-year in 2026, reaching USD194 billion in gross transaction value, the fastest growth in Southeast Asia. This is supported by national digital ID scaling, InstaPay for Business, and the merger of BancNet and the Philippine Clearing House Corporation (PCHC) to streamline payment interoperability.
Digital lending also grew to USD7 billion in loan book balance, up 17 percent year on year from USD6 billion in 2025, and is projected to reach USD31 billion by 2035. Digital insurance grew to USD110 million in annual premium equivalent and gross written premiums, a 16 percent year-on-year increase that ties with Vietnam for the fastest-growing digital insurance sector in Southeast Asia.
WHAT GOOGLE AND BAIN SAY
“The Philippines’ digital economy continues to show remarkable resilience and momentum as it proves its unstoppable growth once again this year. What is especially exciting is the rapidly growing trust and adoption of AI among Filipinos, with over half of the working population actively using AI tools to streamline work and daily life. As user confidence deepens and local AI use cases expand, strong policy support and collaborative ecosystem development will be key to unlocking the full potential of the Philippine digital economy,” said Prep Palacios, Google Philippines country manager.
“Filipinos are embracing AI quickly, with 53 percent of the working population already using GenAI. But we are still early in the journey, and there is significant headroom for growth. The next chapter is about depth, turning what is occasional use today into everyday workflows that will truly benefit Filipino individuals and businesses. With the National AI Center for Research and Innovation rolling out this year and National Privacy Commission frameworks supporting responsible adoption, the Philippines is well positioned to make that shift. Doing so can cement the country’s place among SEA’s fastest-growing AI markets,” said Bennett Aquino, partner at Bain & Company.
Download the full e-Conomy SEA 2026 report.