Jobless rate hits 3-month high in June as more Filipinos join workforce
EM - News Moderator 
PHILIPPINE jobless rate hit a three-month high in June, signaling weaker labor market conditions that could weigh on household spending and complicate the government’s efforts to sustain economic growth.
The unemployment rate rose to 4.9% from 3.7% a year earlier, with 2.59 million Filipinos out of work, the Philippine Statistics Authority (PSA) reported on Thursday.
The June jobless rate was up slightly from 4.8% in May, and was highest in three months or since the 5% in March.
National Statistician Claire Dennis S. Mapa said the rise in unemployment was driven by the higher labor force participation as many new graduates entered the workforce.
“Our labor force participation increased. Year on year, this increased by around 822,000. Of course, when labor force participation increases, there are employed and unemployed,” Mr. Mapa said.
The labor force participation rate (LFPR) stood at 65.1% in June, slightly lower than the 65.7% in June 2025 but higher than 63.8% in May. This translated to 53.25 million Filipinos aged 15 years and over who were in the labor force.
Labor Secretary Francis N. Tolentino on Thursday said the rise in labor force participation reflected growing confidence among Filipinos to seek employment.
“While year-on-year figures highlight areas that require sustained attention, they likewise reinforce the importance of advancing reforms that raise both the quantity and quality of jobs,” Mr. Tolentino said in a statement.
Mr. Mapa said about 650,000 Filipinos entered the labor force for the first time in June. Of these, around 592,000 were aged 15 to 24, suggesting that many were fresh graduates looking for their first jobs. However, only about 310,000 found employment.
“Higher living costs likely encouraged more Filipinos to seek work. However, job creation has not kept pace, particularly among those aged 15-24, resulting in a higher unemployment rate,” Chinabank Research said in a note.
PSA data showed the youth labor force participation rate rose to 33.7% in June from 33.1% a year earlier and 32.3% in May.
However, the youth employment rate fell to 86.5% from 90.6% a year earlier, indicating that more young Filipinos entered the labor force but a smaller proportion were able to find jobs.
Underemployment, a measure of workers seeking additional hours or another job, stood at 12.1% in June, up from 11.4% a year earlier but slightly lower than the 12.2% in May.
The June underemployment rate is lowest since 11.8% in February.
The ranks of underemployed Filipinos — those who want longer work hours or an additional job — stood at 6.11 million.
The unemployment rate averaged 5% in the first half, while underemployment averaged 12.8%.
Services remained the biggest source of jobs, accounting for 62.7% of total employment, followed by agriculture at 20% and industry at 17.3%.
In June, accommodation and food services posted the largest annual employment gain at 481,000, followed by administrative and support services (including call center jobs) at 456,000, and public administration and defense at 440,000.
Meanwhile, the biggest job losses were seen in wholesale and retail trade at 903,000 jobs year on year, while fishing and aquaculture lost 467,000 jobs and construction shed 139,000 jobs.
“Rising consumer prices will likely continue to weigh on hiring in the (retail) sector that has been contracting for a 12th straight month,” Chinabank Research said. “Employment in the construction sector also declined likely due to high construction material costs,” it added.
Jose Ramon G. Albert, a senior research fellow at the Philippine Institute for Development Studies (PIDS) said the latest data show the labor market is expanding in headcount but not necessarily in quality.
“The uptick in underemployment to 12.1% is the more telling signal here. It suggests that a good chunk of those already employed are still looking for additional hours or a second job because their current earnings or work hours are insufficient. Taken together, this points to continued softness in the quality of job creation, with hiring likely concentrated in informal, part-time, or lower-paying segments rather than full-time, higher-value positions,” he said.
University of the Philippines School of Labor and Industrial Relations (SOLAIR) Assistant Professor Benjamin B. Velasco said the latest labor data continued to reflect longer-term challenges in the Philippine labor market.
“Beyond the seasonal trend, the latest LFS show the long-term labor market pattern remains challenging. Job creation does not track economic growth. Thus, overseas migration will remain a safety valve, to cite one labor market response,” he said.
IBON Foundation Executive Director Jose Enrique A. Africa said the latest figures showed that the economy was not generating enough jobs for the growing labor force.
“The year-on-year trends confirm that the economy is unable to generate enough work for the growing population,” Mr. Africa said.
Mr. Africa said weak employment generation should not be attributed solely to recent external factors, citing a slowdown in net employment growth in previous years.
“Weak net employment generation cannot be wholly blamed on the recent oil shock because this has been falling even before from 1.3 million in 2023, to 665,000 in 2024, and then just 170,000 in 2025,” he said.
Mr. Africa said higher unemployment and underemployment, alongside elevated inflation, could weaken household purchasing power.
“However, growing unemployment and underemployment combined with the most recent report of high inflation especially for the poorest income groups strongly points to weakening family purchasing power and worsening welfare,” Mr. Africa said. — M.J.M. Sanchez
