The Philippine startup ecosystem has witnessed a sharp downturn in funding during the first half of 2025. According to the Southeast Asia Startup Report by Kickstart Ventures (Globe Telecom) and DealStreetAsia, equity funding to PH startups plummeted by about 55% to US$86.4 million, down from around US$191 million in the same period in 2024. Still, amid that drop, the Philippines managed to outperform Indonesia in deal value — though Indonesia saw more deals overall. The Philippines had just 15 disclosed deals worth US$86.4 million, while Indonesia had more deals but lower aggregate value at around US$78.5 million. What’s Causing the Slowdown? • Global macroeconomic headwinds: Rising interest rates abroad, inflation pressures, and cautious capital deployment are affecting startup investment globally. • Investor selectivity: Investors are now more focused on governance, path to profitability, and strong fundamentals rather than just growth metrics. • Stage of investment: Most deals in the Philippines in this period were early-stage (seed / Series A), with very few late-stage rounds. Bright Spots & Opportunities • Sector-wise leaders: Fintech remains dominant, making up nearly half of deal value, especially with large contributions like the neobank Salmon raising US$28 million in one go — the biggest single equity deal in PH for the period. Other sectors with traction include HR tech, food & beverage, healthcare, and e-commerce (though e-commerce trails behind in value). • Undercurrents of recovery: Funding raised in Q2 was more than double that in Q1, indicating improved momentum. • Long-term tailwinds remain: PH has advantages — a young, digital-savvy population, rising consumer spending, and growing demand for services in finance inclusion, healthcare access, and climate resilience. These are areas startups can tap into. What This Means Going Forward • Startups will likely need to lean harder into proving unit economics, sustainability, and impact to attract investment. • Expect investors to demand clearer metrics, better governance, and more disciplined growth. • Sectors solving real, urgent problems (health, climate, finance) may see more interest, especially from local-oriented funds or impact investors. • More collaboration with government might help, especially in regulatory clarity or incentives, so that startup ecosystems can sustain through leaner periods.