Human performance in focus: What business leaders in the Philippines need to know

Business leaders in the Philippines are currently facing a critical gap. While most recognize the urgent need to adapt to the changing world of work, only a few believe that their organizations are responding effectively. The cost of inaction? A potential decline in productivity, trust, innovation and long-term resilience.

This insight comes from Deloitte’s 2025 Global Human Capital Trends study entitled “Unleashing Human Performance in a Boundaryless World,” which drew responses from over 13,000 voices across 93 countries, including 2,000 executives. Each year, the report offers a pulse check on how organizations are evolving and this year’s findings challenge leaders to rethink how they unlock human potential amid rising complexity. 

The modern workplace isn’t about choosing sides — it’s about balancing tensions: automation vs augmentation, agility vs stability and control vs empowerment. These aren’t problems to solve, but they’re dynamics to design around. True human performance doesn’t ask leaders to choose between business and people, it asks them to build systems that serve both.

Deloitte has identified three dimensions of human performance: work, workforce and organization and culture. These three elements present key areas where organizations must make strategic choices to unlock both human and business outcomes. 

The study presented the first dimension as rethinking work. Leaders around the world have overwhelmingly agreed that balancing stability and agility — or what Deloitte calls “stagility” — is essential in their operations. However, the challenges in achieving this are coming from the inside and not the outside. Internal blockers like outdated structures and varying leadership perspectives have hindered companies from focusing on what creates value rather than what just fills time. 

To move forward, businesses must shift from task-based roles to outcome-driven work, meaning their focus should be on empowering employees to redesign their workflows using AI and embracing flexible, skill-based models that adapt to change.

Simplification is another blind spot. Globally, 41 percent of work time is spent on low-value tasks, but the rise of new technologies poses opportunities to eliminate low-value tasks. Tech and data can be used to identify inefficiencies, and redesign processes with employee input. The “slack” or freed up time from the integration of tech to systems should be embraced as this is not a waste but a space for creativity, which could be a game-changer for the organization.

The second dimension is evolving the workforce, coming from findings that highlight the widening of the experience gap. Filipino companies struggle to find experienced hires while new workers struggle to gain experience — especially as AI takes over many entry-level tasks. This leads to a development vacuum or the growing difference between the skills and experience organizations need and what workers actually have.

The fix isn’t just more training, it’s rethinking how experiences should be built.

Apprenticeships, hands-on learning and AI-powered development tools can help bridge the gap. Work should be designed with career paths in mind, not just immediate outputs.

There’s also the digital employee value proposition (EVP) or the concept that tackles why and how people choose their employers in the AI era. As the technology transforms work, employees want more meaning, clarity, and support. Transparency about AI’s role and designing EVP strategies that help people thrive alongside machines — not compete with them — is essential.

Tech investment is another area where intent and impact don’t align. In the Philippines, only 4 percent of leaders believe their tech investments are delivering human value and it’s high time to redefine success metrics to include well-being, engagement and growth, not just efficiency.

Finally, the third identified dimension is rebuilding organizations for performance. Motivation is personal. Data can help decode what drives each employee — whether it’s recognition, autonomy, or purpose — and tailor experiences for them accordingly.

Performance management also needs a reset. Workers don’t trust traditional systems to measure their true value and there is a necessity to move from rigid reviews to daily coaching, meaningful feedback and enabling conditions for success.

The manager’s role is ripe for reinvention. With AI handling more admin and analysis, managers must focus on developing people, solving problems and guiding transformation. They need to be equipped not just to oversee tasks, but to coach, collaborate and catalyze agility. These are not just soft skills; these are hard currency in today’s world.

Considering these dimensions when forming a framework for one’s organization aids in managing the tensions between short-term results and long-term value. They drive leaders towards a reimagined workplace, one where performance management isn’t just traditional, but geared towards implementing efficiency-boosting practices directly into daily work life. 

The path forward lies in rebalancing work, workforce and workplace, not by solving tensions, but by embracing them. When we do, we don’t just optimize performance — we unleash human potential.

In a boundaryless world, that may be the most powerful advantage of all. 

Source: Manila Times

World Bank says job reforms to drive PHL growth to nearly 7%

Reforms to enhance job creation and quality could propel Philippine economic growth to close to 7% and transform it into a middle-class economy by 2040, the World Bank said.

“To stay on a path to upper middle-income status and to realize the national ambition of a middle-class society free of poverty by 2040, the country needs a new wave of reforms. Faster, broader, deeper,” World Bank Country Director for the Philippines, Malaysia, and Brunei Zafer Mustafaoğlu said.

In its maiden launch of the Country Growth and Jobs Report for the Philippines on Tuesday, the World Bank said that it is “feasible” for economic growth to accelerate to 6.8% by 2040, along with ramping up employment and wages.

“The implementation of the set of reforms recommended in this report is estimated to increase annual gross domestic product (GDP) growth to 6.8%, create over 5.1 million additional jobs, and boost real wages by 12.9% by 2040,” according to the report.

World Bank models show the Philippines growing by an additional 1.4 percentage points (ppts) if its recommended reforms are implemented.

Broken down, economic growth could increase by 0.78 ppt annually through reforms aimed at productivity and human capital; by 0.45 ppt through deeper capital reforms; and by 0.18 ppt by boosting labor force participation.

The report has about 45 actionable recommendations, with the reforms focused on those three main pillars.

The World Bank said reforms are needed to boost project infrastructure investment, especially in connectivity.

“In an archipelagic economy like the Philippines that has spent so much in connectivity infrastructure, keeping restrictions to inter-island transport, the form of cable path restrictions, is sort of a big distortion, a big cost,” World Bank lead economist for Brunei, Malaysia, the Philippines and Thailand Gonzalo J. Varela said.

“Lifting restrictions to inter-island shipping, domestic shipping, is something that is also going to help the economy grow, and a lot of the growth happens at local levels.”

The multilateral institution also recommended policies to lower entry barriers for businesses; open domestic shipping to lower inter-island transport costs; and strengthen service delivery by local government units.

“Ensuring that local governments have the capacity to deliver the key services that they are mandated to deliver is also going to be crucial,” Mr. Varela added.

To further mobilize private capital, there is also a need to support small and medium enterprises and multinational companies linkages and deepen capital markets.

“The Philippines has received more foreign direct investment in the last few years, and we are yet to see that small and medium enterprises are connecting to these multinationals, that they are gaining from that connection as suppliers, gaining productivity,” he said.

FASTER GROWTH

With these reforms implemented, growth can further accelerate. “What it does is it brings that baseline that we had estimated at 5.4%, closer to that Philippine Development Plan target,” Mr. Varela said.

“It means that if these reforms are implemented by 2040, the Philippine economy would be 24% larger than it would have been otherwise,” he added.

The government is targeting 5.5-6.5% GDP growth this year and 6-7% from 2026 to 2028, according to latest Development Budget Coordination Committee  estimates.

Under the Philippine Development Plan, the government had placed an upper bound of 8% on economic growth targets until 2028.

“To achieve its goal of becoming a middle-class society, the Philippines needs to sustain annual growth of 6-10% for decades,” the World Bank said.

It noted that though job quality remains a concern despite an increase in the number of jobs.

“Despite impressive gains, productivity growth remains weak. Job creation has tilted heavily toward non-tradable sectors, while the tradable economy — so critical for long-term growth and innovation, is shrinking,” Mr. Mustafaoğlu said.

“Top firms are not expanding fast enough. Competition is limited and too many workers remain in low-quality, low-wage jobs.”

The latest data from the local statistics agency showed the Philippines’ unemployment rate went down to 3.9% in May from 4.1% in April, with the number of individuals in the labor force hitting an all-time high of 52.32 million.

“The middle-class society by 2040 national ambition is not a utopia. It is something that is achievable if there is a commitment, both from the public sector to double down on reforms, and from the private sector to innovate and compete,” Mr. Varela said.

Based on the World Bank’s latest income classification, the Philippines still remains a lower middle-income economy, narrowly missing the threshold to achieve upper middle-income status.

The Philippines posted a record gross national income per capita of $4,470, only $26 shy of the World Bank’s upper middle-income threshold of $4,496-$13,935.

ARTIFICIAL INTELLIGENCE

Meanwhile, the World Bank also flagged the impact of disruptive technologies such as artificial intelligence (AI).

“Some jobs in the Philippines are at risk of technology displacement. AI exposure and AI’s potential complementarity can affect employment. The Philippines has slightly fewer jobs comprising routine tasks than its peers,” according to the report.

“However, the Philippines is more exposed to AI’s displacement effect than other East Asia and the Pacific countries due to its higher engagement in cognitive services sectors, such as contact centers in the IT-BPO sector.”

Mr. Varela said these technologies are “fast moving” and so far, they have yet to see displacement in the implementation of AI.

“At the moment, that is not yet happening. The sector is looking at it very carefully, but neither in the Philippines nor in other countries that have a large share of the economy and productivity, we see that these are at the moment being displaced.”

“What AI will do is it will create new jobs, similar to what we saw with other technological changes that created some new jobs and displaced others.”

Mr. Varela said it will be crucial to have labor market institutions that facilitate the movement of people across sectors and activities.

“It’s also having the skills to do that. So, there’s an agenda on skilling and upskilling workers… science, technology, engineering, mathematics, are also going to be increasingly important with AI.”

Mr. Mustafaoğlu said that there is a “very good opportunity” for the Philippines to benefit from the shift to AI.

“It has a young population, and things are happening a lot in the case of Asia and the East Asia region. If we can take that opportunity to actually benefit from this new development of AI and integrate AI and technologies in a way that firms increase their capability… and the economy continues to benefit and grow.”

“That will also attract FDI (foreign direct investment), because when you have those capabilities, foreign firms will also come and invest here with new technologies,” he added.

Source: Business World

Jobless rate improves to 3.9%

The Philippine labor market improved in May, latest Philippine Statistics Authority (PSA) data showed, with the labor force participation rate rising to its highest in 20 years and both unemployment and underemployment going down.

The jobless rate eased to 3.9 percent from 4.1 percent in April and a year ago, with the count of those without work falling to 2.03 million from 2.06 million and 2.11 million a month and a year earlier.

Underemployment, which counts those wanting additional hours of work, additional job, or a new job with longer hours, slipped to 13.1 percent from 14.6 percent in April.

It was, however, well above the 9.9 percent recorded in May last year.

In terms of magnitude, 6.60 million of the 50.29 million individuals with jobs were classified as underemployed. Of this, 59.2 percent worked fewer than 40 hours a week, the PSA said, while the remaining 40.8 percent were employed for 40 hours or more.

The number of employed persons rose from 48.67 million in April and 48.87 million in May 2024. This brought the employment rate to 96.1 percent, slightly higher than the 95.9 percent recorded in both April this year and May 2024.

The services sector remained the dominant source of employment, accounting for 61.8 percent of all jobs in May. This was followed by agriculture at 21.1 percent and industry at 17.1 percent.

Wholesale and retail trade and the repair of motor vehicles accounted for the largest share of jobs at 19.8 percent, followed by agriculture and forestry at 18.8 percent and construction at 9.5 percent.

The biggest year-on-year gains in employment were seen in wholesale and retail trade, which added 489,000 jobs. This was followed by agriculture and forestry with 469,000, administrative and support service activities with 371,000, accommodation and food services with 365,000, and other service activities with 175,000.

The manufacturing sector suffered the most job losses, shedding 374,000 positions from the previous year. Construction followed with a loss of 298,000 jobs while mining and quarrying, public administration and defense and water supply and waste management also recorded annual declines.

The labor force participation rate (LFPR), meanwhile, climbed to 65.8 percent in May, up from 64.8 percent in the same month last year and 63.7 percent in April 2025. This translates to 52.32 million Filipinos aged 15 years and older who were either employed or actively seeking work — the largest labor force recorded since April 2005.

Socioeconomic Planning Secretary Arsenio Balisacan said this was the highest LFPR since 2005.

“We welcome this development in labor force participation because it indicates a healthy and competitive Philippine labor market,” Balisacan said in a statement.

“Generally, a larger workforce can lead to increased economic output and potentially higher GDP (gross domestic product) growth, as more people contribute to the economy.”

Balisacan said the government’s ongoing push for key infrastructure flagship projects would help close development gaps and attract more investments that can generate jobs.

He also stressed the need to improve how public funds were being used by focusing limited resources on priority areas such as quality education, healthcare, food security and connectivity infrastructure.

Source: Manila Times