We seek to describe recent developments in employment relations in the Philippines, placing these developments in the contexts of the distinctive elements of the Philippine social/political/industrial relations systems as well as the ongoing trade-based and functional integration of international markets and the recent regional economic crisis. We find that, while some firms are pursuing functional flexibility and more cooperative employment relations, the logic of competition has primarily induced firms to adopt practices that promote numerical flexibility such that a core-periphery workforce is created. We argue that the labor movement in the Philippines has been hampered in its efforts to effectively counter employer strategies by its low density, its fragmentation, and an unfavorable public policy environment; Philippine labor unions have, however, made some recent gains in organizing and inter-union coordination. We also argue that governments, both national and regional, have not done enough to counteract the negative effects of market integration on workers nor to evolve the Philippines into a higher value-added exporter.