Grab Philippines plays a pivotal role in driving economic growth, creating livelihood opportunities, and significantly contributing to the national GDP, according to a study conducted by the UA&P Center for Research and Communication (CRC).

The study, commissioned by a third-party consultancy firm, titled ‘The Impact of Ride-Hailing and On-Demand Delivery Services on the Philippine Economy: A Focus on Grab Philippines’, ascertained that Grab’s economic influence is evident in its unique ability to amplify economic returns.

For every peso spent on the Grab platform, an additional P3.42 is injected into the national economy. This multiplier effect surpasses industry benchmarks — positioning Grab as a major economic contributor within the transportation sector. The fundamental idea is that with a hypothetical P100-GrabCar ride, an additional Php 342 is generated for the economy.

 

Grab’s ripple effect: Economic and household multipliers 

With a total output multiplier of 3.42, Grab ranks third among seven transport sectors next to railway and air transport. Moreover, compared with available multiplier studies published in local economics journals, this multiplier significantly outpaces heavy industries like mining, highlighting Grab’s unique and substantial economic contributions.

The study found that consumer patronage of Grab services accounts for 0.07 to 0.3 percent of the national GDP. 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. This implies that an extra peso spent on Grab services extends beyond just covering the actual ride or meal – it contributes an additional 44 centavos to household incomes for laborers in the ride-hailing and on-demand delivery industry nationwide.

With this multiplier value for household income, Grab Philippines contributed 0.10 percent to 0.17 percent to the total family income from 2019 to 2021 which is equivalent to between P23.8 billion and P40.3 billion.

UA&P Resident Industry & Regional Economist Prof. Greg Mabbagu (R) delves into the intricacies of Grab’s economic multiplier effect, emphasizing its pivotal role in propelling the Philippine economy forward. L-R: Paolo Abrera, event moderator; Dr. Cid Terosa, UA&P School of Economics Associate Professor; Dr. Thomas Aquino, Senior Fellow at CRC.

Generating livelihood opportunities

According to the study, Grab’s operations have also played a vital role in reducing the average number of unemployed persons by 1.1 percent to 1.6 percent from 2019 to 2021.

Grab’s mission-driven growth not only addresses major societal challenges but also fosters economic development across different regions in the Philippines. “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,” Dr. Thomas Aquino, Senior Fellow at the UA&P-CRC, commented on the study.

Read more below: