Cautious consumption seen weakening seasonal hiring

By Chloe Mari A. Hufana, Reporter

SLOW AND UNEVEN government aid after recent typhoons could dampen fourth-quarter growth as households curb holiday spending following the hit to their incomes and job opportunities, analysts said.

Federation of Free Workers President Jose G. Matula said delayed assistance and fewer seasonal job openings could dampen holiday consumption, a key driver of gross domestic product (GDP).

“When there are fewer seasonal hires, wallets get thin,” he said via Viber, adding that families might postpone purchases and trim nonessential spending.

The Philippines posted modest economic growth in the third quarter, weighed down by the impact of natural disasters.

Third-quarter growth slowed to 4% year on year, from 5.5% a quarter earlier and 5.2% a year earlier.

The slowdown was largely driven by faltering infrastructure spending, as a high-profile corruption probe into government construction projects — particularly flood-control works — delayed billing and disbursements.

Private consumption, which accounts for more than 70% of GDP, slowed to 4.1% in the third quarter from 5.3% in Q2, dragged down by declining consumer confidence.

The labor market in September was also negatively impacted by natural disasters, as reflected in the most recent jobs report .

The Philippine Statistics Authority reported a 3.8% jobless rate for the month, weakening from 3.7% a year earlier.

September typically marks the start of the holiday season in the Philippines, when businesses ramp up hiring to meet rising demand in the run-up to December.

Mr. Matula called on the government to fast-track emergency job programs, and front-load public works so that “people regain (working) hours now, not after the holidays.”

“Relief work programs like Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) and cash-for-work reach some displaced workers, but the support is inadequate and too slow,” he noted.

He said payouts from emergency employment schemes remain inconsistent, and most temporary jobs last only a few days — insufficient to replace lost income.

“Relief work should pay at least the regional minimum, be released on time, and automatically start after calamities,” he said.

He urged the government to link short-term cleanup work to long-term reconstruction jobs “with safety gear, proper hours, and union participation,” adding that success should be measured “by paid hours and decent jobs, not photo-ops.”

Labor Secretary Bienvenido E. Laguesma acknowledged that natural calamities have disrupted labor market conditions.

“Natural disasters act as (an) economic shock or disruptor that affects business spending, even leading to downsizing or, at times, closure, lower consumer confidence and demand, and even restrict(ing) availability and mobility of work-ers,” he said via Viber.

He said these factors are expected to weigh on near-term labor performance, but maintained that the overall outlook remains steady.

“We continue to see stable employment trends based on the last two months of the Labor Force Survey, which are well above our target of a 94–95% employment rate,” he added.

He has expressed hope that hiring will pick up in the runup to December.

The holidays might not bring its usual boost to the labor market this year, as weaker exports and recent natural disasters curb seasonal job creation, according to University of the Philippines School of Labor and Industrial Rela-tions Assistant Professor Benjamin B. Velasco.

He said holiday hiring in retail, services, and manufacturing is expected to soften, curbed by sluggish demand for garments and electronics — two of the country’s key export earners.

“Seasonal jobs are not as robust this year,” he said via Messenger, adding that external headwinds and domestic disruptions have made employers more cautious in expanding their workforce.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, noted the critical role of household consumption.

“The holidays usually bring the biggest boost to retail, food, travel, and services. A strong rebound in spending can help offset weaker government disbursements or exports,” he said via Viber.

Mr. Rivera added that income losses and job disruptions from the typhoons could suppress growth if consumers hold back.

“Private consumption is very sensitive to income and confidence, especially among lower- and middle-income households who drive the bulk of holiday demand. When families prioritize essentials or rebuild after disasters, dis-cretionary purchases drop, which could temper retail and services growth even into early 2026.”

Economist Reinielle Matt M. Erece of Oikonomia Advisory and Research, Inc. noted that consumption remains the economy’s strongest pillar, accounting for the largest share of GDP and serving as the country’s main buffer against external shocks.

“This quarter, we may expect consumption to be the primary driver of growth. Especially as the holiday season takes effect, when households typically receive higher incomes and demonstrate higher propensity to spend,” he said via Viber.

“However, recent calamities may drive spending down as households focus more on preparations and recovery rather than consumption. In addition, weaker government spending may also dampen job absorption in govern-ment and even in the construction sector.”

Mr. Erece added that consumption growth may slow “more than desired” this quarter but said recovery could be possible next year if reforms move ahead.

“We may see proactive measures in 2026, not just in economic reforms but also politically as well. If we improve institutions sooner, recovery is definitely possible in 2026,” he added.

The public works scandal has rippled across key sectors of the economy, including the stock market and the peso. Investor confidence has taken a hit, with shares in construction and infrastructure-related firms sliding as deep-rooted vulnerabilities in government oversight were exposed.

The peso, meanwhile, has struggled against the dollar, reflecting broader concerns about fiscal policy and the potential slowdown in public investment.

Mr. Velasco urged policymakers to seize this moment as a wake-up call to adopt a more progressive industrial policy that strengthens domestic linkages in agriculture and manufacturing.

“We need an industrial strategy anchored not just on export markets, but also on local demand and national goals such as food security, green jobs, and sustainable growth,” he said.

Mr. Rivera noted that preventing a broader economic slowdown will depend on prompt government aid, stable prices, and a quicker recovery in disaster-hit areas to sustain household spending and support overall economic growth.