The unincorporated non-agricultural sector witnessed a decline in employment during the October-December quarter of 2025 compared to the previous quarter, primarily due to a marginal reduction in the number of establishments.
The informal sector employed 122.72 million workers in Q4 2025, marking a 4.5% decline from 128.59 million workers in the July-September quarter, according to data released by the National Statistics Office (NSO). This was the lowest level of employment in the non-agricultural informal sector in 2025.
The sector plays a crucial role in expanding employment opportunities, promoting grassroots entrepreneurship, and contributing significantly to the country’s Gross Domestic Product (GDP).
The number of establishments also fell by 1.3% to 78.6 million in Q4 from 79.7 million in the July-September quarter, the lowest in the three quarters of 2025.
“Estimated establishments slightly decreased, reflecting a marginal quarter-on-quarter fall, although the estimates fall within the confidence band of the Q3 estimates,” the NSO said.
According to the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2023–24, the estimated total number of establishments in the unincorporated sector stood at about 73.4 million. However, the number rose by around 8% to 79.2 million in the 2025 annual survey data.
Digital Silver Lining
The proportion of establishments employing hired workers stood at 12.74% in Q4, reflecting a marginal decrease from the previous quarter. The sector continued to show an upward trend in formalization, with 41% of establishments reporting registration under at least one Act or authority, up from 37% in the previous quarter.
Indicators of digital adoption in the sector showed notable improvement, with the percentage of establishments using the internet rising from 39% in Q3 to 48% in Q4 2025.
Sectoral Breakdown
The share of women in the workforce saw a marginal increase to 29% in Q4 from 28.70% in Q3.
The survey covered unincorporated non-agricultural establishments in three broad sectors, Manufacturing, Trade, and Other Services. The “Other Services” sector accounted for the largest share of both establishments (33.7 million) and workers (49.6 million), followed by Trade and Manufacturing.
In Q3, the number of establishments had increased marginally to 79.7 million from 79.4 million in the April-June quarter (a growth of 0.37%). The April-June quarter itself had recorded a quarter-on-quarter growth of 1.12% from 78.5 million in January-March. Employment growth was nearly flat at 0.01% in the July-September quarter, with 128.5 million workers.