Growing beyond the center: Innovation and investment in the regions

Economic development in the Philippines has long been concentrated in Metro Manila. The cities in the metropolis benefit more from advanced infrastructure, larger markets, and proximity to decision-makers, all of which attract business investments. But as the country works toward more balanced and inclusive growth, we are seeing promising signals from regional areas, driven by technology, entrepreneurship, and shifts in how Filipinos learn and work.

While urban hubs will continue to be important growth drivers, the rise of innovation outside Metro Manila is helping lay the groundwork for a more decentralized and resilient economy. This shift distributes opportunity more equitably and creates new pathways for investment.

REGIONAL STARTUPS ON THE RISE
A recent ecosystem mapping report conducted in partnership with the Department of Science and Technology has highlighted a significant increase in startup activity outside Metro Manila. While the National Capital Region remains the primary hub for startups, cities such as Iloilo, Davao, and Cagayan de Oro are increasingly contributing to the country’s innovation economy. These regional centers benefit from growing access to incubators, accelerators, academic institutions, and support from local government units (LGUs).

One example is Peddlr, a mobile point-of-sale app built for micro-retailers, such as sari-sari (sundry) stores. Based in Samar, Peddlr allows small entrepreneurs to track sales, manage inventory, and access financial tools through their phones. Since its launch, Peddlr has raised over $5 million and reached hundreds of thousands of users. Its growth demonstrates that successful innovation can happen outside traditional business hubs.

Another regional initiative, Rezbin from Iloilo, is using gamification and smart recycling bins to promote sustainability. Users receive points for properly segregated waste, while the system gathers data for LGUs to better manage solid waste. These ventures are rooted in local realities and address real community needs with practical, tech-enabled solutions.

Both Peddlr and Rezbin were named winners of R.G. Manabat & Co.’s (KPMG in the Philippines) Global Tech Innovator (GTI) competition, underscoring the strength and promise of startups emerging from the various regions.

ECONOMIC OPPORTUNITY THROUGH DECENTRALIZATION
The rise of startups from regions outside Metro Manila highlights the potential of decentralization as a powerful strategy for inclusive economic growth. These ventures support sustainability, aid local job creation, strengthen supply chains, and stimulate consumer activity, bringing economic vibrancy to areas that have had relatively limited access to capital and resources.

Founders based in the provinces often have a strong connection to their communities, which can translate into grounded business approaches and a long-term commitment to their local ecosystems. Their success encourages others in their area to explore entrepreneurship, creating a ripple effect of innovation and economic opportunity.

Investment capital has traditionally concentrated in urban centers where startup ecosystems are more established. However, there is growing recognition among investors of the value in exploring opportunities beyond these hubs. By considering factors like local impact, scalability, and digital readiness, investors are beginning to identify promising startups in regional areas. These ventures contribute to a more balanced and resilient economy by expanding the reach of innovation and economic activity.

A SHIFT IN LEARNING AND WORKING MODELS
Technology is also reshaping how Filipinos access education and employment. Hybrid learning and remote work arrangements have allowed more people to build skills and careers from anywhere in the country. This is helping to level the playing field, particularly for those who previously had to move to the city for work or upskilling opportunities.

Universities in the provinces are increasingly partnering with business organizations to offer programs in data analytics, entrepreneurship, financial literacy, and digital transformation. The rise of coworking spaces and local startup communities also provides young founders with access to resources that used to be available only in Metro Manila.

This shift allows more people to participate in the digital economy without having to uproot themselves. As a result, innovation becomes more inclusive, with ideas and talent coming from a broader range of backgrounds and experiences.

BUILDING AN ENABLING ENVIRONMENT
Sustaining this momentum requires a supportive ecosystem. The government, private sector, and investors must work together to provide not only the necessary infrastructure but also mentoring, capacity-building, and funding. Better connectivity, smarter policies, and more localized programs will help regional ventures grow and integrate into the national economy.

Government agencies can play a key role by streamlining business registration, improving access to digital tools, and fostering data-driven governance. Private sector partnerships with schools and LGUs can help develop future entrepreneurs. Investors must also be willing to support early-stage ventures outside familiar tech corridors that show strong potential.

Decentralization is not about shifting everything away from the cities, but about ensuring that economic progress is accessible to more people, wherever they are.

Business organizations, like the Management Association of the Philippines (MAP), also play an important role in supporting this shift. By fostering collaboration among industry leaders, government, and startups, MAP helps build the enabling environment that regional ventures need to grow.

Through initiatives, such as the MAP x KPMG Technology Summit taking place on June 17 at Shangri-La The Fort, MAP and R.G. Manabat & Co. are creating platforms for dialogue and connection. The event will feature discussions on digital transformation, data and analytics, cybersecurity, data privacy, and innovation. It will also recognize outstanding ideas and talent through the awarding of the KPMG in the Philippines Academic Innovation Challenge and the GTI winners.

These efforts reflect a shared commitment to empowering innovation across the country and to building a future where growth is inclusive, sustainable, and accessible to all.

Michael Arcatomy “Mike” H. Guarin is a member of the MAP Committees on Energy, Governance, and Health. He is partner for Advisory of KPMG R.G. Manabat & Co.

map@map.org.ph

mguarin@kpmg.com