THE ECONOMIC SLOWDOWN brought about by reduced government spending that leads to less opportunities for labor is making business leaders worry a lot.
At the World Economic Forum, business leaders claimed that a job shortage has since emerged, a sign that economic growth risks are falling short of what’s needed to absorb workers in the next two years.
Philippine executives ranked weak public services and social protection as their second concern in the WEF’s 2026 Global Risks Report, with respondents citing shortcomings in education, infrastructure and pension systems.
THREAT TO ECONOMY
Business leaders also flagged the spread of misinformation and disinformation, unintended effects of artificial intelligence, and inflation as key threats to the economy, the report was cited by Business World.
Economics professor Leonardo A. Lanzona of Ateneo de Manila University said the Philippine executives’ concern over jobs reflects the recent economic slowdown.
“As the economy screeches to a slowdown as a result of the decrease in government expenditures, aggregate demand decreases,” he said.
The lack of additional opportunities is also causing a number of businesses, particularly micro, small, and medium enterprises, to fail, Lanzona added.
“Consequently, this economic slowdown brings about significant unemployment,” he added.
2.25 MILLION JOBLESS
In the first 11 months of 2025, the unemployment rate averaged 4.19 percent or equivalent to 2.25 million jobless Filipinos. This is higher than the 3.9 percent jobless rate, which is equivalent to 1.66 million in the same period in 2024, Business World reported.
“As most of the budget is eaten by debt, the situation is aggravated by lower social protection, political infighting, and a labor-saving technology such as AI (artificial intelligence) that can further reduce labor demand,” Lanzona said.
The WEF report said that globally the biggest risk over the next two years remained geoeconomic confrontation.
The WEF’s Global Risks Perception Survey captured insights from over 1,300 experts worldwide.
OTHER GLOBAL RISKS
Other top risks cited by global business leaders included misinformation and disinformation, societal polarization, extreme weather events, and state-based armed conflict.
“Geoeconomic confrontation has emerged as the most severe risk over the next two years, while economic risks have experienced the sharpest rises among all risk categories over the two-year timeframe,” WEF Managing Director Saadia Zahidi said.
Rising inflation and potential asset worries rose as countries face high debt burdens and volatile markets amid growing concerns over an economic downturn, she averred.
FEARLESS FORECAST
The WEF noted that 18 percent of surveyed participants identified geoeconomic confrontation as the top risk likely to trigger a material global crisis in 2026.
This was followed by state-based armed conflict (14%), extreme weather events (8%), societal polarization (7%), misinformation and disinformation (7%), and economic downturn (5%).
Survey participants said that over the next 10 years extreme weather events would become more severe and their impact would be unimaginable.