The Philippines’ digital sector in 2025 was defined by connectivity initiatives, uneven infrastructure, and growing policy debates about how to govern an increasingly online society, including AI and blockchain. 

New data from Google, mobile networks trade group GSMA, and the government paints a picture of a country where digital habits are deepening — from e-commerce and e-wallet payments to AI use and online public services — yet still shaped by gaps in connectivity, cybersecurity, and regulatory oversight. 

As the digital economy grows and state-led digitalization accelerates, questions around data sovereignty, platform accountability, and the risks that accompany financial inclusion have become central. 

The challenge heading into 2026 is not adoption, but whether the country can build the infrastructure, safeguards, and governance needed to sustain it, and whether new laws such as the Konektadong Pinoy, and upcoming ones like the CADENA bill can truly make an impact.

AI use soars: PH ranks 6th worldwide in ChatGPT adoption

One of the year’s clearest data points came from DataReportal’s 2026 report: 42.4% of Filipino internet users aged 16 plus used ChatGPT in the past month, placing the Philippines 6th highest in the world.

Despite concerns on its energy usage, ethical concerns, and its use of copyrighted content, generative AI has become a tool utilized for things such as schoolwork, workplace communication, and even, personal decision-making. But the most common use case globally this year, and in the Philippines, is using AI as a companion or for therapy-like conversations.

This trend triggered global concerns. In the United States, lawmakers introduced a bill to ban AI companion apps for minors due to mental health risks. At the Social Good Summit in 2025, Maria Ressa warned that Filipinos may be “outsourcing intimacy” to chatbots, revealing vulnerabilities and private emotions to systems that feed future AI models.

On the government side, the Philippines anchored its AI strategy on the Philippine Development Plan 2023–2028, the National AI Strategy Roadmap 2.0, and the Philippine Skills Framework, aiming to integrate AI across industries and prepare workers for emerging roles. The Education Center for AI Research by the Department of Education, and a new AI think tank under the National Innovation Council were established in 2025. (READ: Gov’t-led AI plans underway but infrastructure, skills need addressing – think tank)

The use of generative AI is projected to contribute ₱2.8 trillion to the Philippine economy by 2030, according to a report by the think tank Tony Blair Institute. But it said that it depends on overcoming hurdles familiar across the digital landscape: connectivity gaps, low R&D funding, uneven provincial adoption, and the urgent need for upskilling as the IMF estimates 4 in 10 Philippine jobs may be affected by AI.

These are the two sides of the AI debate that are only going to heat up further in 2026. People are using it, and adopting it, in no small part because industries are deploying them. But it only brings up an even more important question: in its adoption for industry’s “progress,” must humans truly sacrifice their ethics and morals, and stand on the climate and creative agency, among others?

AI-fueled cyberattacks also rose in 2025.

The Philippines, a scam hotspot

Among all digital developments in 2025, one risk dominated: online scams. The GSMA ASEAN Scam Report 2025 placed the Philippines at the highest victimization rate in the region: 52%, compared to the ASEAN average of 45%. Facebook remained the leading platform for scams in every ASEAN country.

The Philippines’ vulnerability stems from several overlapping factors:

• Extremely high mobile and e-wallet usage
• A population with uneven digital literacy
• Legacy 2G/3G networks still in use and vulnerable to IMSI catcher exploitation
• Fragmented cybersecurity enforcement

Some common scams this year included job offer scams, e-commerce scams, investment schemes, predatory loan-app extortion, and social engineering on messaging apps. (READ: A failed scam attempt gave BPI a glimpse into how fraudsters take your money)

The GSMA urged platforms to “close the trust–use gap” on social commerce by improving seller verification, speeding up takedowns, securing payments, and strengthening hand-offs to banks during disputes. The organization’s findings echoed a broader frustration among lawmakers and regulators: despite the SIM Registration Act, with 203 million SIMs registered and 6 million blocked, scam texts remain rampant.

Kabataan Representative Renée Co pointed to IMSI catchers as a major, under-addressed attack vector. If more than 90% of scam messages originate from such devices, she argued, identity-based regulation is insufficient.

One proposed solution is to sunset legacy networks. The 3G shutdown is said to have been phased out by September 30, while 2G is scheduled for full decommissioning by December 31, 2026. The NTC noted that about 15% of mobile users, particularly seniors, still rely on older devices — slowing the transition.

The GSMA advised mobile networks: “Focus on the channels that matter most: voice and OTT voice/messaging. Expand verified caller display and screening on risky calls; tighten SMS sender-ID regimes to counter impersonation; scale takedown and escalation pathways with social platforms for pattern recognition of suspicious activity. The goal is to reduce the chances for social engineering to succeed.”

The eGov app: rapid expansion, uneven governance

The eGov app continued to expand aggressively. By mid-2025, the platform had 14 million registered users and more than 1,000 government systems integrated. Google’s e-Conomy report described the app as a key driver of digital acceleration and adoption.

But the internal controls behind this expansion came under scrutiny. A DICT internal audit flagged missing or delayed contracts, raising concerns about data breach liabilities for local government units and the national government.

The app’s third year in 2026 will be a proving ground: can it tangibly make government transactions easier? Can it simplify business permits, reduce processing times, and ensure that data remains secure? These questions remain unanswered.

Cybersecurity remains uneven across government. The GSMA report noted progress through the President’s approval of the National Cybersecurity Plan 2023–2028 in February 2025. Still, the September 21 protests saw 19 government websites defaced, demonstrating how exposed some systems remain.

A digital economy still growing

According to Google’s latest e-Conomy SEA 2025 report, the Philippines’ digital economy grew to US$36 billion this year, up from US$31 billion in 2024.

E-commerce remained the sector’s backbone, contributing US$24 billion, followed by online media, transport and food delivery, and online travel.

This growth reflects deepening digital routines rather than entirely new behavior: QR Ph is now visible in many sari-sari stores, e-wallet use covers an expanding range of everyday payments, and online groceries have settled into weekly routines for many families.

The BSP reported that 57% of retail payment volume and 59% of retail payment value are now digital, evidence of how e-wallets have become a key financial gateway, especially for people who never engaged with traditional banking. These habits solidified further in 2025 as platforms expanded their reach and small merchants increasingly embraced cashless payments.

Blockchain to CADENA: shifting toward tech-neutral transparency

The CADENA bill (Citizen Access and Disclosure of Expenditures for National Accountability) became a focal point late in the year. It is a tech-neutral alternative to the earlier Blockchain the Budget bill, which critics said was overly prescriptive and blockchain-centric.

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CADENA focuses on the outcome: a transparent, publicly accessible tracker of national budget spending. DICT Secretary Henry Aguda committed that such a system could be built “in one year,” noting that the larger obstacle is the government’s continued reliance on physical paperwork rather than digital systems. (READ: Before the blockchain, challenges on digitalization need addressing)

Connectivity: progress and persistent gaps

Connectivity remains a fundamental constraint. The GSMA Mobile Economy APAC 2025 report highlighted several positive developments: the expansion of 5G coverage, the approval of a US$287.24-million World Bank-backed Digital Infrastructure Project, and the passing of the Konektadong Pinoy law, which aims to make connectivity more universal and affordable.

Several new local data centers also came online this year, and the launch of the Bifrost subsea cable raised expectations of improved national bandwidth. But the physical limitations remain stark. The country has around 30,000 cell towers, far below the 90,000 needed to reach regional benchmarks. The DICT’s target of 30,000 additional towers by 2028 underscores the scale of the deficit. (READ: What do subsea cables such as the new Bifrost bring to PH connectivity?)

Budget deliberations for 2026 made these gaps explicit. The DICT requested ₱18.9 billion, up from ₱12.4 billion the previous year. Of that, ₱17.3 billion sits under the Office of the Secretary, covering digital infrastructure, e-government, and cybersecurity. Another ₱5.3 billion is for capital outlay, while ₱10.9 billion is allocated for operations and maintenance.

The connectivity challenge is especially visible in public schools. Of the 37,308 public schools nationwide, 12,139 remain offline and are slated for connection under DICT’s targets. The Free Wi-Fi program plans to deploy 30,000 additional sites, but progress is uneven: urban areas benefit first, while rural and geographically isolated communities continue to lag.

The Konektadong Pinoy law, whose implementing rules were finalized in November 2025, is expected to accelerate access. Key provisions are scheduled for deployment within the next three to six months. In 2026, consumers may begin to see whether these policy intentions translate into improvements, not just in speed, but in affordability and reliability.

Data sovereignty and the push for state-owned data centers

One of the clearest debates of 2025 centered on data sovereignty and government cloud dependence. The DICT revealed during hearings that government agencies collectively spend ₱12 billion annually on cloud services, with 90% of government data stored overseas, primarily in Singapore. (READ: DICT seeks own data centers in bid to enhance data sovereignty)

For an administration increasingly concerned with national security, this dependence sparked alarms. The DICT proposed building three government-owned data centers, at ₱2.5 billion each, to store an initial 300 terabytes of data for the eGov app and other state systems. Over three years, the plan scales to nine centers totaling ₱7.5 billion.

The agency’s argument is economic as much as strategic: recurring cloud service fees may eventually exceed the cost of building and maintaining the government’s own infrastructure. At the same time, lawmakers questioned the national broadband project’s reliance on Meta-associated subsea cable infrastructure in Aurora, raising concerns about US surveillance powers. DICT officials responded that safeguards are in place and that diversification, including potential collaboration with Japan, is underway.

Whether the Philippines can successfully migrate critical systems to local infrastructure is a question that looms large over 2026.

Online gambling: ban or regulate?

Online gambling became one of the most divisive digital issues of 2025. Senate hearings revealed how easily e-wallet top-ups, in-app loans, and digital payment flows allowed individuals to lose significant amounts of money per day.

Some lawmakers, including senators Risa Hontiveros and Migz Zubiri, pushed for a total ban, while Senator Bam Aquino highlighted the contradiction between keeping physical gambling sites 300 meters from schools yet allowing mobile gambling “within centimeters” of minors.

Others advocated for stricter regulation instead of prohibition. Pagcor argued that lowering fees helped pull illegal operators into the formal market, raising its capture rate from 5% in 2021 to 40% in 2025.

Mental health groups also reported rising cases of gambling addiction linked to online betting. Dean Calleja of Bridges of Hope told senators that gambling-related patients have surged following the rise of online platforms. He warned that the Philippines lacks awareness that gambling addiction is a treatable disease and said Pagcor’s “play responsibly” reminders are insufficient. – Rappler.com