Number of new businesses in the Philippines more than doubles despite impact of pandemic – outpacing all major economies
‘Wave of entrepreneurialism’ as 76,000 new Filipino startups open in Covid year‘
The number of new businesses in the Philippines increased by 152% last year despite the impact of the Covid-19 pandemic, the highest rate of all major economies. The Philippines outpaced the global average of a 6% increase in business start-ups, shows a new study by UHY, the international accountancy network (see table below).
UHY’s study shows that there were almost 76,000 new businesses created in the Philippines in 2020 compared to just over 30,000 in 2019. The Philippines leads the UHY International table of business births in terms of percentage increase in the number of new businesses in the last year.
UHY says that with the pandemic forcing people out of work there has been ‘a wave of entrepreneurialism’ in the Philippines – with a particular increase in online retail businesses.
The Philippines’ government has taken a number of measures to help new business creation and aid small businesses and entrepreneurship throughout the pandemic, including a variety of government-backed loans and grants available for businesses needing financial assistance.
As of April 2021, The Development Bank of the Philippines (DBP) BP gave out over PHP6.13 billion in loans to struggling businesses. The Rehabilitation Support Program allowed public and private institutions affected by the pandemic to borrow up to 95% of the amount they needed in support.
In addition, Bangko Sentral ng Pilipinas (BSP) ordered all BSP-supervised financial institutions to implement a mandatory one-time 60-day grace period on all loans to individuals and businesses so no interest or penalty charges were accrued.
UHY says there is growing confidence in the Philippines’ economic recovery following the peak of the country’s ‘second wave’ in April 2021. However, the Government must ensure it continues to support new businesses to develop as the Philippines continues to recover from the effects of the pandemic.
Michael L. Aguirre, Partner of UHY M.L. Aguirre & Co, UHY’s member firm in the Philippines says “It is encouraging to see such fantastic statistics come out showing the entrepreneurial spirit of the Philippines.”
“To create businesses at more than twice the rate of last year is an incredible achievement, especially considering the adverse effects the pandemic had on the retail, travel and hospitality sectors.”
“While Filipinos working in the sectors hit hardest by restrictions may have gone through a period of intermittent employment, it seems that many have taken this opportunity to create their own businesses. In the future we may look back at this period as a crucial time for entrepreneurship in the Philippines.”
“Going forward the government must continue to support small and medium businesses in the Philippines and ensure they implement more businesses positive policies to build on the growth we have seen.”
China still creating far more new businesses than any other country
China saw the number of new businesses it created grow by 1.25 million in 2020, giving it first place among 22 countries in UHY’s study of new business creation around the world. Over 25 million new businesses were created in China in 2020, up 5% from the over 23.7 million created in 2019.
However, the United States saw a much larger increase in new business creation in percentage terms. The US saw 4.4 million new businesses created in 2020, a sharp 27% increase on 3.5 million businesses created in 2019.
Nine countries of 22 in the study saw significant increases in new business creation in 2020 compared to 2019, including major economies such as the United Kingdom, France, Brazil and India.
However, says UHY, there is a risk of a two-speed system emerging in which some European economies see much lower rates of new business creation. The 13 countries in UHY’s study which saw new business creation fall in 2020 is dominated by European economies, including Spain, Italy, Germany and Poland.
Philippines tops percentage change in number of new businesses created – creating 152% more than 2019.
- Charting the New Frontier: How the 43rd ASEAN Summit Paves the Way for an Unprecedented Era of Trade and Innovation in Southeast Asia.￼
- Nine-dash line: An insight into the “Barbie” movie controversy, compliance, and taxation in the Philippines
- CRYPTO TAXES DECODED: UNDERSTANDING YOUR DIGITAL DUTIES
- Lazada, Shopee and Online Platform Merchants are Reminded of their Tax Obligations
- The Power of Tax Residency: A Guide to Maximizing Your YouTube Earnings