I saw a chart online this week: "Countries and Their Major Challenges." United States - gun violence. China and Japan - aging population. India - quality job creation. Pakistan - water scarcity. Brazil - Amazon deforestation. Twenty countries listed.
The Philippines was not on that list. So I asked myself, if we were No. 21, what would our challenge be?
I was born in the Philippines during the Commonwealth era. I worked for the U.S. Food and Drug Administration, retired in 2002, and have been a snowbird since - winters in California, summers in Marinduque, the previous several decades. At 91 nearing 92, I have seen the country go through war, martial law, people power, and now this.
If that chart allowed only one challenge, it would be misleading for us. We don't have one major challenge. We have five that are connected.
1. The Economy Has Slowed Down Again
In October, the World Bank lowered our growth forecast to 3.7 percent for 2026, down from 4.4 percent in 2025. Inflation was 6.2 percent in July 2026 and is projected at 5.8 percent for the whole year. Reuters reported the government itself cut its forecast, citing a graft scandal that slowed government spending and an energy crisis. For ordinary families, that means what I hear from my relatives in Marinduque - higher fuel, higher food, less money left.
The good news hidden in that bad news: the World Bank reclassified the Philippines this year as upper-middle income, with a GNI per capita of $4,850. We crossed a threshold. But the poverty rate is still 55.2 percent under that upper-middle standard. That is the real challenge - we are classified as richer, but more than half still live as poor.
2. Energy and Cost of Living
In a recent survey, 92% of respondents from the Philippines cited reliance on fossil fuel imports as our top economic vulnerability. When oil prices go up in the Middle East, tricycle fare goes up in Boac. We are an island nation that imports almost all our fuel.
That is why brownouts and fuel prices hurt more in the Philippines than in the United States. My old refrigerator in Marinduque costs more to run now than it did three years ago.
3. Climate and Environment Is No Longer Seasonal
The chart lists Japan's aging and Bangladesh's flooding. For us, it is both climate and daily environment.
Reports this year list our critical environmental issues as deforestation, water pollution, soil degradation, urban flooding, typhoons and rising sea levels. Over 70% of our rivers are polluted. In June 2026, PAGASA warned of a very strong El NiƱo bringing droughts, food insecurity and power shortages.In Marinduque, we know this. When it floods, it floods the low houses. When it is dry, the wells go salty.
4. Jobs and The Young People Leaving
The Philippines still has unemployment hitting 3 million reported this year, and that ripple affects tourism, airlines, and families dependent on OFW money. Our challenge is not just "quality job creation" like India. It is keeping quality jobs in the country so our nurses, seafarers, and IT graduates don't have to leave.
5. Governance and Trust
The BTI 2026 report says under President Marcos Jr. there have been slight improvements in human rights, but significant challenges persist. And analysts still put the Philippines at high risk for political instability because of supply chain and energy security issues. For me at 91, this is the oldest story. Projects get delayed. Money disappears. Then growth is cut not because we don't have money, but because we didn't spend it well.
So What Is Our One Major Challenge?
If I had to write one line for that chart, like "Gun violence" for America, I would not write one thing.
I would write: "Making upper-middle income mean middle-class life."
We have the income classification. We have the talent. What we don't have yet is affordable housing, cheap and stable electricity, clean rivers, and jobs that pay enough that you don't have to go to Dubai or Walnut Creek to find a better life.
At 91 nearing 92, I am hopeful. I have one blog with nearly 3 million views and seven more over a million. Most of my readers are from the Philippines and from Filipinos abroad. You write to me that you are worried. I tell you what I learned after 91 years: the Philippines always faces a crisis, and Filipinos always find a way through with family, faith, and resourcefulness.
What do you think is the biggest challenge we face today? Leave a comment. I read them every morning with my coffee in Walnut Creek.
- David B. Katague, Walnut Creek, California and Boac, Marinduque, Philippines
October 2026
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