Philippines unemployment rate rises as labor force expands

Traders Union
All News
Economic Data
Philippines unemployment rate rises

Highlights

Philippines unemployment rate rises to 5.4% in September from 5.3% in August and 3.8% a year earlier as labor force expands to 53.19 million.
Underemployment rate improves to 11% from 11.9% in August and 11.1% a year earlier, with 5.56 million workers seeking additional work or hours.
Service sector leads with 62.2% of employment; wholesale and retail trade posts 546,000 new jobs month-on-month, while construction sheds 271,000 jobs year-on-year.

September labor market data and sector shifts

As reported by BusinessWorld, citing the Philippine Statistics Authority, the unemployment rate rises to 5.4% in September from 5.3% in August and 3.8% a year earlier, as the labor force expands to 53.19 million from 52.56 million a month earlier and 51.56 million a year earlier.

The number of unemployed Filipinos increases to 2.86 million from 2.77 million in August and 1.96 million in September 2025. At the same time, employment climbs to 50.32 million from 49.79 million a month earlier and 49.6 million a year earlier, while the employment rate stands at 94.6%, slightly below 94.7% in August and 96.2% a year earlier.

The PSA data indicate job creation continues, but not quickly enough to absorb the influx of new entrants to the labor market. Labor force participation reaches 64.5% in September, up from 64% in August.

Underemployment improves during the month, with the rate easing to 11% from 11.9% in August and 11.1% a year earlier. About 5.56 million workers report seeking additional work or longer hours, including 61.4% who work fewer than 40 hours a week and 38.6% who work 40 hours or more but still look for extra income opportunities.

Services lead employment as youth participation increases

The service sector remains the country's biggest employer, accounting for 62.2% of total employment, followed by agriculture at 20.7% and industry at 17.1%. Wholesale and retail trade and repair of motor vehicles and motorcycles remains the largest job source at 19.9% of total employment, ahead of agriculture and forestry at 17.9% and construction at 9.3%.

Accommodation and food service activities post the largest year-on-year employment gain, adding 834,000 jobs. Transportation and storage adds 254,000 jobs, while agriculture and forestry, public administration and defense, and other service activities also register increases.

Construction records the largest employment decline, shedding 271,000 jobs, followed by arts, entertainment and recreation with a loss of 163,000 jobs. Information and communication, wholesale and retail trade, and professional, scientific and technical activities also post decreases.

On a month-on-month basis, wholesale and retail trade leads job creation with 546,000 additional positions, followed by accommodation and food service activities, public administration and defense, manufacturing, and fishing and aquaculture. Wage and salary workers account for 63% of total employment, while self-employed workers without paid employees make up 28.1% and unpaid family workers represent 7.3%.

Youth participation in the labor market also increases, with the labor force participation rate among Filipinos aged 15 to 24 rising to 34.1% from 31.6% a year earlier. Youth employment reaches 6.23 million, while about 715,000 young workers remain underemployed, equivalent to an underemployment rate of 11.5%.

Our earlier article on early-career job-hopping highlighted research showing that switching jobs can be a key driver of wage growth and a pathway to better long-term job matches, especially for younger workers. It also noted that avoiding moves early in a career may limit earnings progression, despite cultural skepticism toward frequent job changes. This context helps frame how shifts in hiring conditions and sector-level job creation can affect opportunities for new entrants to the labor force.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.