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Philippines: next tech tiger

  

tech tiger

Although the Philippines has one of the fastest-growing economies in Southeast Asia, it is not clear it will become the next tech tiger since it also has the slowest internet in the region. Whether it is slow internet connection can hinder its tech revolution or not, some people are certain that the country posses an opportunity to turn it into Asia's next tech tiger.

With a fast-growing middle class who can afford technology, a large English-speaking population, a society that is addicted to social media, and low labor and operating costs, the Philippines apparently has all the ingredients of an emerging tech tiger.
There's an opportunity for growth as the population is ready for a tech revolution: they have money to spend and they love being online but the slow internet connection frustrates them. If internet speed is already atrocious, coverage is no consolation: stepping out of the city means traveling decades back in time.
A recently arrived tech entrepreneur Peter Fabian said to the BBC that the Philippines looks like “the end of the world” to any seasoned Silicon Valley investor. The reason why Philippines has been left behind in the region is because entrepreneurs looking for the next tech hub overlooked the country and invested in other Asian tigers, such as Singapore and Thailand.
Despite being late in the Southeast Asian boom, there's still hope for the country. Mr Fabian, for instance, said: "We see the Philippines as a good testing market." That is why he chose Philippines for his start-up after researching emerging markets across the globe. He did this in spite of his business being dependent on technology, as it aims to use big data to build a credit card company aimed at the middle class who are not customers of traditional banks.
The reason behind this bold move is that Mr Fabian saw the country as a land of opportunities since there is not much competition with only a few experienced tech entrepreneurs around. Mr Fabian also saw the opportunities the Philippines has being a former US colony. The country already has a large English-speaking population which echoes some similar cultural values and the country shares many US institutions, making it more familiar and easy to navigate.
"The attitude towards foreigners is very welcoming, which cannot be said of a lot of people in Asia," said Mr Fabian. Although the Philippine start-up scene is limited, there are some initiatives in this direction. For instance, some businesses adapting Western products to the local market, including fast fashion ecommerce, daily deals sites or taxi service apps.
Meanwhile, others, like Ron Hose who is a Silicon Valley-bred entrepreneur and investor based in Manila are investing instead in looking for solutions to local issues. Therefore, they are coming up with new products that are particularly designed and built for the local market.
"There are a second set of problems that are unique to emerging markets that companies and entrepreneurs in developing countries are not really building products for," he said.
"An entrepreneur sitting in an office in Silicon Valley," Mr Hose said, "is not thinking about the problems of a Filipino who is sitting in a Jeepney (local taxi) for an hour and a half a day to go to work, or whose home gets flooded 10 times a year during typhoons."
His company, Coins.ph, offers financial services to people who have no bank account. According to Mr Hose, it may be true that each country is unique, but there are vital common problems that are similar across emerging markets, like being unbanked - which he already addressed - or having no access to education.
"If you solve one of these needs, then the market is larger than any one of these countries. If you can solve banking for people in the Philippines, you can solve it for 500 million people in South East Asia," he said.
Richard Eldridge is another Manila-based tech entrepreneur who co-founded Lenddo, an online loan company that provides consumers access to financial services and helps them use their social media activity to develop creditworthiness. Based in The Philippines since 2001, MR Edridge has seen the impact of the economic boom on the Philippines.
While running an outsourcing company, he noticed that many of his employees - who are part of the middle class he is targeting - kept soliciting loans from him. "It fascinated me that they were coming to me and not going to a bank and getting loans," said Mr Eldridge. That's the story of why he left the multinational in 2011 to start his own company Lenddo with New York-based chief executive Jeff Stewart. Although the Philippines remains Lenddo's home base and largest market, the company has expanded to other countries such as Mexico and Colombia. Given the success and growth of the company, it is now looking at 30 other emerging countries for expansion.

 

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