The main purpose of this chapter is to reconsider income inequality in the Philippines from a social and political perspective, as well as to review the economic consequences. The political situation in the Philippines continues to lack stability even after the debacle of the Marcos regime and the restoration of public order. Economic stagnation which stemmed from the political turmoil, has persisted more than 10 years. What, then, is the background of this stagnant economy and political instability? The key characteristics of the Philippine economy may quickly be summarized. There is high dependence on the export of commercial crops; a substantial economic gap between the rich and the poor which has long persisted; and a balance of payments deficit since independence. These characteristics may help account for the present stagnant economy and continued social instability.