The service sector is the principal single component of the Philippine economy, contributing more than two-fifths of GDP and employing more than one-third of the country’s labour force. Trade and hospitality services together constitute the largest employer in the sector. Public administration and defense account for less than one-tenth of GDP and an even smaller portion of employment. However, the government engages in business in its own right, owning such enterprises as the National Development Company, the Philippine Ports Authority, the Philippine National Railways, and many other entities. With ongoing privatization, however, the number of corporations owned and controlled by the government has been decreasing.

Tourism has been growing steadily. Most international visitors come from South Korea, the United States, and Japan, but the number of Malaysians, Singaporeans, and residents of other Asian countries is increasing. Metro Manila and Cebu are among the most popular destinations, as are such resort areas as Boracay Island, just off the northern tip of Panay.