Jobs and poverty tell a very different story.
How did the Philippine economy fare last year, and what lies ahead in 2026? Grand-scale corruption so overwhelmingly captured public attention in the last half of 2025 that fixing the economy’s slippage barely entered the conversation. Yet there is much to talk about—apart from slowing growth, the recent labor force, inflation, and self-rated poverty figures point to deep problems.
Because joblessness worsened, easing inflation has not prevented millions more Filipinos from becoming poor and hungry since the Marcos Jr administration came to power. At the same time, the manufacturing sector is set to fall to its smallest share of the economy in 77 years, and agriculture to its smallest share in the country’s history.
Slower
Widespread economic distress on the ground had already driven the president’s performance ratings at the start of 2025 to the worst in post-dictatorship history. Gross domestic product (GDP) growth slowing to 4% in the third quarter was the last straw and took away the government’s favored headline peg for economic success.
Average growth for the first three quarters dropped to 5% with full-year performance on track to fall well below the 5.7% rate in 2024. Although blamed on the corruption scandals, the slowdown actually reflects a longer deceleration that began in 2017 but was momentarily masked by the pandemic shock and rebound.
Recent aggregate data confirm the daily struggles of millions of Filipinos that fuel unrest and dissatisfaction, and that self-serving politicians exploit for patronage.
Jobless
The latest labor force survey data showed employment contracting by 277,000 year-on-year to 49.27 million and unemployment growing by 590,000 to 2.25 million in November 2025. The unemployment rate spiked to 4.4% from 3.2% the year before.
Two things make the results even more worrying though. First, employment data is overstated by oddly considering a huge 3.52 million unpaid family workers as somehow “employed”; this is 280,000 more than the year before. Second, unemployment data is understated by not counting perhaps 2-3 million or more discouraged job-seekers who statistics rudely consider as “dropped out of the labor force” instead of what they really are: unemployed.
There is also an important story beneath the headline numbers. Looking at the structure of employment not just in the latest round but over years confirms that the Philippine economy and Filipinos are forced to rely on volatile informal, unstable, and low-productivity work.
Work has become extremely volatile since the pandemic. In any given month, total employment has swung by as much as a 1.6 million decline (July 2025) or a 2.6 million increase (January 2025) from the year before, movements that cannot be explained by seasonality alone. Conditions are most precarious for the large pool of so-called self-employed workers whose numbers have fluctuated by as much as 2.1 million up or down in different months.
Nearly 31 million or over three-fifths (62%) of total employment are concentrated in the sectors most prone to severe employment swings and which are also the lowest-paying – agriculture and fishing, wholesale and retail trade, accommodation and food services, construction, and other services. These sectors are revolving doors of insecure livelihoods.
The agriculture sector predictably fares worst. Employment can decline by as much as 2 million or rise by up to 1.7 million in a year, yet it also records the lowest average daily basic pay (ADBP) of any sector at just Php367 in 2025.
Employment is very unstable across the economy. Measured by hours worked, part-time employment can drop by as much as 2.3 million or increase by up to 2.8 million, while even full-time employment which is often assumed to be more secure still swings between declines of 1.1 million and increases of 1.7 million.
Poorer
These labor market failures explain why inflation easing to 1.8%, despite being touted as below target, has brought little relief to the poorest and most vulnerable Filipinos. The labor market simply does not generate enough jobs or incomes that are stable enough for lower inflation to be felt.
The recently released Social Weather Stations (SWS) survey summarizes the problem concisely: 14.3 million or over half (51%) of Filipinos families rated themselves as poor in November 2025, which is 2.1 million more than in June 2022, at the start of the Marcos Jr administration. Considering also another 3.4 million (12%) borderline, some 17.7 million or two-thirds (63%) of Filipino families consider themselves poor or vulnerable.
This is not to say that lower inflation does not matter. Inflation measures the rate of increase in the general price level and therefore reflects changes in the cost of living over time, particularly the immediate pressure households face as prices rise or fall. However, employment quality and stability are the more decisive determinants of long-term family welfare and these will not be achieved in an economy dominated by informal, low quality and volatile work.
Boldness
The economy is missing its employment engines – a developed agricultural sector and, for the long haul, a robust Filipino industrial base. Jobs need to be anchored in expanding formal enterprises and rising productivity to reduce poverty. As it is, the latest labor force figures show employment contracting in agriculture (by 69,000) and manufacturing (by 150,000).
Building these engines requires genuinely bold action to expand domestic productive capacity, led by a democratic and development-oriented state. This means equitable rural development, strategic national industrialization policy, and large-scale public investment, including protectionist measures and strong support for local producers.
More to the point, it demands a break from decades of policy that privileged market forces, glorified globalized openness, and fetishized private profit-seeking. This framework has made a few prosperous while delivering persistently high and rising employment volatility especially in agriculture and services, informal work, and self-employment, while also causing stubborn fiscal deficits, bloating debt, and a peso at record lows.
The government’s “Big Bold Reforms: The Philippines 2026” briefing this week will no doubt feature confident rhetoric as the Marcos Jr administration seeks to arrest its political decline. To be sure, a coherent development strategy that generates stable and productive employment across sectors is long overdue. But if the administration’s handling of the unfolding anti-corruption debacle is any indication, the event will likely just offer empty soundbites rather than the decisive policy break from failed economic orthodoxy that the country and Filipinos so urgently need.