The Philippine startup ecosystem has grown rapidly in recent years, buoyed by a dynamic mix of technology adoption, entrepreneurial drive and government initiatives. Yet despite this progress, scaling remains an uphill task for many founders.

A recent report from Endeavor Insight highlights the barriers that continue to hold back startups across different stages of growth. These hurdles span funding limitations, talent shortages, and policy challenges, painting a complex picture of an ecosystem striving to mature.

Access to capital is the most pressing concern for scaling founders. The report notes that since 2022, a global “funding winter” has chilled investment activity, with growth-stage startups in the Philippines finding it particularly difficult to secure financing. Founders attribute this not only to shifts in global markets but also to a lack of prominent local success stories or exits that could encourage reinvestment into the ecosystem. Without these reference points, investors remain cautious, leaving many young companies to bootstrap their way forward.

For smaller startups, the absence of early-stage capital flows has created additional pressure. While angel investors and venture capital remain present, the limited availability of funds means competition is fierce. This funding gap has forced some founders to be resourceful, leaning on revenue-first models or exploring partnerships abroad.

The shortage of specialised technical talent

Talent challenges weigh heavily on the Philippine startup ecosystem. The country has long been recognised as a hub for IT outsourcing, yet founders say the skills required to scale high-growth startups differ significantly from those used in service-based industries.

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Specialised engineers—particularly in areas such as product development, data science and artificial intelligence—remain in short supply.

The rise of remote work has complicated the situation further. Multinational companies are increasingly tapping into the Philippine workforce, offering competitive salaries that startups struggle to match. As a result, many local firms resort to training fresh graduates on the job, or seeking talent from regional markets such as Singapore, Vietnam and India.

While this strategy offers short-term relief, it also highlights the urgent need for a deeper domestic pipeline of technical expertise.

Scarcity of managerial talent

Scaling is not solely a technical challenge; it requires strong leadership across all aspects of business. Yet another recurring theme from the report is the scarcity of qualified managerial talent. Positions in B2B sales and C-suite functions, particularly in marketing and finance, are among the hardest to fill.

Companies often attempt to groom young professionals into leadership roles through management-track programmes, but this process is lengthy and uncertain. Others look abroad, competing with multinational firms to attract experienced managers. To stand out, startups emphasise employer branding and highlight the opportunity to take on significant responsibilities early.

Still, the talent pool remains shallow compared to more developed ecosystems.

Policy and regulatory hurdles

For smaller businesses, government policies and compliance requirements pose some of the toughest obstacles. Founders describe monthly reporting obligations, complex processes for starting or winding down a company, and gaps in the legal frameworks that underpin competitive global markets.

In response, many outsource accounting and legal services to manage the burden, while some register their headquarters abroad to take advantage of more business-friendly regulations.

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Despite these frustrations, there is cautious optimism. Entrepreneurs point to ongoing legislative efforts and advocacy work as signs that a more enabling environment may emerge. The government’s role in shaping the future trajectory of the Philippine startup ecosystem cannot be overstated.

Emerging solutions and support initiatives

Recent developments suggest momentum towards addressing these challenges, according to Alea Ladaga in a contributed post to e27. The Department of Trade and Industry (DTI), in partnership with the National Development Company (NDC), has launched the Philippine Innovation Hub – Marikina Enterprise Center (iHub-MEC). Positioned outside Metro Manila, this initiative aims to decentralise innovation and provide startups, small businesses and the creative sector with access to mentoring, financing links and market opportunities.

She explained that the hub complements existing programmes such as the Startup Venture Fund (SVF), which co-invests in high-growth companies across gaming, multimedia and creative industries. These initiatives build on the foundations of the Innovative Startup Act and the Philippine Creative Industries Development Act, signalling a broader government push to strengthen the ecosystem.

Further, the reorganisation of the National Economic and Development Authority (Neda) into the Department of Economy, Planning and Development (DepDev) reflects a structural shift in economic planning. DepDev’s mandate includes coordinating policies across agencies, aligning national and local development priorities, and ensuring efficient use of resources. With consultation mechanisms involving the private sector, civil society and academia, it may provide startups with a stronger voice in shaping policy.

Towards a more resilient ecosystem

The Philippine startup ecosystem stands at a crossroads. On one side are persistent hurdles that risk slowing progress. On the other are promising signs of institutional support and a maturing entrepreneurial base eager to scale.

Overcoming these challenges will require coordinated efforts from both government and industry. Continuous policy reforms, targeted talent development and sustained funding opportunities are critical. If these elements align, the Philippines could not only address today’s hurdles but also position itself as a competitive hub for innovation in Southeast Asia.

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