Corruption Fallout? PH Startup Funding Collapses Amid Governance Concerns

The Philippines' startup ecosystem suffered a devastating blow as investor confidence plunged amid a multibillion-peso corruption scandal linked to controversial flood-control projects.

According to a joint report by DealStreetAsia and Kickstart Ventures, startup funding in the country collapsed by 72 percent to just $119 million from $428 million in 2024 — the lowest level recorded in six years. The number of startup deals also dropped sharply, falling from 44 to just 23.

Industry leaders pointed to growing governance concerns as a major factor behind the investment slowdown. Investors have become increasingly wary, demanding stronger transparency, accountability, and corporate governance before committing fresh capital.

The decline accelerated during the second half of 2025, coinciding with the unfolding corruption controversy that implicated several government officials and raised concerns about the country's business environment. Funding fell from $86 million in the first half of the year to only $33 million in the second half.

The fallout was severe enough for Indonesia to overtake the Philippines in startup funding, attracting $260 million despite facing its own corruption issues earlier in the year.

While startup investment across Southeast Asia grew 18 percent to $5.37 billion, the Philippines moved in the opposite direction, highlighting how governance issues can directly undermine investor trust and economic competitiveness.

Despite the setback, industry leaders remain hopeful that reforms, stronger governance, and emerging sectors such as artificial intelligence and sustainability-focused technologies can help revive investor confidence in the years ahead.