“Grab’s success ripples through the economy…”
It’s an anomaly spawned by the pandemic in 2020, when people were cooped up in their homes and unable to leave their house. Now, the services of Grab Philippines have become the new normal―providing jobs and livelihood and creating a multiplier effect on the Philippine economy.
Two separate studies affirm the positive impact of Grab, a mobile technology company that offers ride-hailing, food delivery and digital payment services.
Leading superapp Grab, according the Asian Development Bank, is a key driving force in the Philippine economy. Its innovative service model provided flexible and substantial livelihood opportunities, offsetting a rise in unemployment and helping thousands of Filipinos weather economic adversity.
The University of Asia and the Pacific’s (UA&P) Center for Research and Communications, meanwhile, noted in its own study that Grab’s economic influence was evident in its unique ability to amplify economic returns.
For every peso spent on the Grab platform, says the think tank, an additional P3.42 is injected into the national economy. The multiplier effect surpasses industry benchmarks―positioning Grab as a leader in economic contribution within the transportation sector. The fundamental idea is that with a hypothetical P100-GrabCar ride, an additional P342 is generated for the economy.
“Our study shows that Grab―with its strong foothold in the Philippines, its technology, portfolio of services, and robust ecosystem of partners and merchants, has a remarkable capacity to propel our economy forward. Having the unique position as a superapp has allowed Grab to fully realize a multiplier effect that reverberates throughout the economy and the Filipino household” said Dr. Cid L. Terosa, UA&P Associate Professor and senior economist.
Grab’s multiplier effect cannot also be ignored. UA&P resident Prof. Greg Mabbagu shares Grab’s success ripples through the economy, livelihood creation and households.
Grab, with a total output multiplier of 3.42, he says, ranks third among seven transport sectors next to railway and air transport. Compared with available multiplier studies published in local economics journals, the multiplier significantly outpaces heavy industries like mining, highlighting Grab’s unique and substantial economic contributions.
The study found that the consumer patronage of Grab services accounts for 0.07 percent to 0.3 percent of the national gross domestic product. From 2019 to 2021, Grab’s estimated total economic contribution ranges from P37 billion to P165.6 billion, reinforcing its position as a key contributor to the national economy.
The household income multiplier of 0.44 also suggests that every additional peso spent on Grab’s services stimulates an increase of P0.44 in the national household income. The study noted that it implied that an extra peso spent on Grab services extends beyond just covering the actual ride or meal―it contributes an additional P0.44 to household incomes for laborers in the ride-hailing and on-demand delivery industry nationwide.
With the multiplier value for household income, Grab Philippines contributed 0.10 percent to 0.17 percent to the total family income from 2019 to 2021, or equivalent to between P23.8 billion and P40.3 billion.
“This study showcases how expansive the positive impact of online marketplaces like Grab have on national and local economies, promoting a more balanced regional development. We are very optimistic that with the fast-growing adoption of digital-first ways of life, platforms like Grab will continue to be key economic drivers as they transform the lives of many Filipinos for the better,” says Dr. Thomas Aquino, senior fellow at the UA&P-CRC.
Grab’s operations have played a vital role in reducing the average number of unemployed persons by 1.1 percent to 1.6 percent from 2019 to 2021. It has reaffirmed its dedication to stimulating economic growth through its operations, which currently spans over 100 cities nationwide. The leading superapp is set to further drive digital transformation through its everyday services to additional cities and municipalities beyond Metro Manila in 2024.
“We understand that much work needs to be done in further driving the nation forward, and we are eager and prepared to help usher in a new phase of inclusive growth and prosperity―with the support of our partners in the government and public sector, and our regulators,” says Grab Philippines country head Grace Vera Cruz.
The ADB weighed in that Grab is not only a tech success story―it is also a resilient economic pillar supporting the livelihoods of countless Filipinos. Through its innovative platform economy model, the ADB said Grab continues to provide essential services while promoting the welfare and social mobility of its partners. It’s a testament to the potential of technology to drive economic recovery and development.
“The findings of the Asian Development Bank’s survey reaffirms that we are indeed living out our mission of creating flexible earning opportunities for thousands of Filipinos. We are committed to continuously enhance the livelihoods of our partners, deliver value to our consumers, while building a sustainable ecosystem for all our stakeholders,” says Vera Cruz.
“This report also reminds us that there is always room to kaizen. We will continue to seek innovative solutions to further enhance our drivers’ welfare and safety while delivering exceptional services to our customers. Our goal is not just to be a super app–we aim to be a super partner to every Filipino,” she added.
E-mail: rayenano@yahoo.com
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Grab, Asian Development Bank, GDP, University of Asia and the Pacific’s (UA&P) Center for Research and Communications