Philippine SMEs Ride a Wave of Confidence Into 2026

By Kekeletso Nkele, small.news Assistant

(small.news) — Building on these positive indicators, Philippine small businesses are entering 2026 on a high note, according to CPA Australia’s latest Asia-Pacific Small Business Survey.

Nearly four in five reported expansion in 2025 — the sector’s best performance since 2019 and the fourth-highest among the 11 markets studied.

Optimism is expected to rise further next year. Nearly nine in ten small business owners expect growth—the most confident outlook among surveyed markets. Industry representatives cite customer focus, innovation, and export growth as reasons. This optimism shapes the forces driving the sector’s future.

Young Small Business Owners Are Driving the Agenda

One standout feature of the Philippine small business landscape is the prominence of younger owners. Close to half of all small business owners are under 40, well above the survey-wide average of 38%. This matters because the data consistently shows that younger small business owners are more inclined toward high-growth tactics — adopting digital tools, exploring overseas markets, investing in new ideas, and prioritizing customer experience.

Rufus Pinto, CPA and Group Head of Enterprise Services at BDO UniBank, noted that Philippine small business owners show resilience and a clear willingness to adopt new technologies and improve the customer experience, despite global challenges.

Technology Investments Are Delivering Real Returns

Though overall technology adoption in the Philippines lags that of some peers, businesses that invested report strong gains. About 68% said tech spending improved profitability in 2025—outpacing the survey average of 56%.

Despite technology’s demonstrated benefits, digital payment adoption is still modest. Fewer than three-quarters of small businesses receive at least 10% of their sales through digital platforms. Cash remains dominant: 77% conduct at least half of their sales in cash, the highest among surveyed markets. Still, strong profitability shows targeted tech investments boost efficiency and competitiveness.

Securing Finance Remains an Uphill Battle

However, beyond technology, many small businesses face persistent challenges. Access to funding remains a major hurdle for Philippine small businesses. About 64% needed external financing in 2025, similar to the survey average of 61%. However, the Philippines ranked last for ease of obtaining finance—a problem expected to persist into 2026.

This creates knock-on effects. It limits investment in technology and workforce development. The survey noted that owners turn to personal networks for advice, rather than professional advisers, perhaps reflecting frustration with formal financial support.

Erwin Vincent G. Alcala, CPA and Trustee of Saint Paul School of Professional Studies and St. Peter’s College, stressed that small businesses drive the Philippine economy by creating jobs, fostering innovation, and sustaining communities. He said better access to capital and professional guidance is key to helping them compete locally and abroad.

Headwinds Acknowledged, but Confidence Holds

The survey shows Philippine small businesses navigating global uncertainty with resolve. Strong growth expectations, entrepreneurship, and innovation position them for progress in 2026, though funding and uneven digital adoption remain concerns.