Causes and impact of the Philippine small pelagic fishery sector problems are presented together with the proposed solutions from fisheries and external sectors. The results of the biological and economic analysis of the small pelagic fishery in the Philippines lead to two conclusions: First, small pelagic fish stocks are subjected to levels of fishing effort far beyond that necessary to generate Maximum Sustainable Yield (MSY) let alone Maximum Economic Yield (MEY). Second, and as a result, both sectors are sustaining economic losses (negative economic rents) implying inefficiencies in the use of labor and capital in the small pelagic fishery. Solutions to the problems of overexploitation will rest not only within the fishery sector, but, more importantly, in sectors outside its traditional realm. The underlying causes of fisheries resource over exploitation are also discussed.