Philippines job shortage risks wasting graduate skills as unemployment rises

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Philippines job shortage and graduates

Highlights

Philippines unemployment rate rose to 5.4% in September from 5.3% in August and 3.8% a year earlier, with 2.86 million unemployed.
Labor force grew to 53.19 million in September, but job growth lagged, pushing more graduates into mismatched, lower-paying, or contractual work.
Government plans to invest in emerging industries, boost upskilling, and support MSMEs, with calls for an industrial policy to address graduate underemployment.

September labor data highlight graduate-job mismatch

As reported by BusinessWorld Online, analysts say the Philippines risks leaving more educated workers underused as labor force growth outpaces the creation of suitable jobs. The Philippine Statistics Authority says the unemployment rate rose to 5.4% in September from 5.3% in August and 3.8% a year earlier.

The number of unemployed Filipinos reached 2.86 million in September, up by 909,000 from 1.96 million in the same month last year. The labor force totaled 53.19 million in September, compared with 51.56 million a year earlier, while the labor force participation rate stood at 64.5%, unchanged from a year ago.

Benjamin B. Velasco of the University of the Philippines Diliman School of Labor and Industrial Relations says population growth and the continued entry of graduates into the workforce are colliding with a weak job market. He adds that global headwinds, including the Middle East war and climate change, are weighing on the economy and limiting hiring momentum.

Calls grow for industrial policy and skills investment

Labor group leader Josua T. Mata says many fresh graduates are unable to secure roles that match their qualifications, pushing them into unrelated, lower-paying or contractual work. Others turn to freelancing, additional training, small business activity or overseas employment, moves he describes as compromises rather than clear opportunities.

He warns that persistent joblessness could deepen inequality because workers without the means to pay for more education, start businesses or seek jobs abroad have fewer options. Prolonged underemployment, he says, can erode skills, reduce lifetime earnings and weaken productivity.

Palace Press Officer Clarissa A. Castro says some graduates may not match current vacancies and that the country lacks enough businesses to absorb new jobseekers. She says the government plans to invest in emerging industries, expand upskilling and reskilling programs, and support micro, small, and medium enterprises so they can grow and hire more workers.

Mata says those measures would have more impact if they were part of a broader industrial policy focused on building higher-value industries and helping smaller businesses modernize and move up the value chain. The Department of Labor and Employment did not immediately reply to a request for comment, according to the report.

In our earlier coverage of the Philippines’ planned sovereign bond market reforms—introducing a new pricing convention for peso government bonds and targeting inclusion in J.P. Morgan’s GBI-EM—we explained how these steps could broaden the investor base and improve liquidity. We also noted that market modernization alone won’t automatically translate into stronger business investment and productivity unless it is paired with wider structural reforms, including better infrastructure execution, governance, and skills development. That context matters as the latest labor figures renew debate over industrial policy and the investments needed to generate higher-value jobs for new graduates.

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