Labor market alarm: Nearly 3 million Filipinos without jobs

National

FROM farms to construction sites, the Philippine workforce is shrinking.

January saw nearly 3 million Filipinos out of work, highlighting cracks in job stability even as major sectors struggle to regain footing.

The Philippine Statistics Authority (PSA) reported that unemployment rose to 5.8 percent in January, marking the highest jobless rate since June 2022, when the country was still reeling from the combined effects of the pandemic and the Russia-Ukraine conflict.

The labor force participation rate (LFPR) also declined to 62.3 percent, translating to 50.89 million Filipinos in the labor force, down from 64.4 percent or 51.69 million in December.

Leonardo Lanzona, labor economist at Ateneo de Manila University, described the figures as a significant setback.

“The latest figures effectively erased four years of labor market recovery in a single year,” he said in an Inquirer report, noting that the slipping LFPR suggests even broader weakness than the headline unemployment rate shows, because discouraged workers who stopped looking for jobs are not counted.

Job quality also deteriorated. About 6.35 million employed Filipinos reported seeking additional work or longer hours to supplement income, up sharply from 3.93 million in December.

This pushed the underemployment rate to 13.2 percent from 8 percent. The employment rate fell to 94.2 percent, equivalent to 47.94 million employed, down from 95.6 percent, or 49.43 million, in December.

Lanzona added that while unemployment typically rises in January as the economy shifts away from the holiday season, this year’s 5.8 percent figure is a genuine alarm signal and not just a seasonal blip.

The rate is more than double the average jobless rate of 2.494 percent from 2016 to 2025.

Employment losses were most pronounced in agriculture and forestry, which shed 1.76 million workers, likely due to the resumption of rice importation after last year’s ban. Wholesale and retail trade lost 888,000 jobs, while construction shed 199,000.

Even before the Middle East crisis, the Philippine labor market had shown signs of fragility following disappointing economic growth last year.

John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies, said in the same report,

“Firms may be responding to economic uncertainty by relying more on temporary arrangements rather than committing to permanent hires.”

He explained that while these arrangements help sustain employment levels, they also indicate fragility in job quality, as workers face less stable income and fewer benefits.

Looking ahead, higher oil prices from the Middle East conflict may further strain the labor market and the broader economy, affecting energy, transport, and food costs.

Chinabank Research warned that risks will remain elevated, noting that repatriation of overseas Filipino workers (OFWs) could weigh on labor conditions, while rising oil prices may increase production costs and prompt firms to delay or freeze hiring.

Transport workers may also face added challenges as consumers cut discretionary travel and transport spending in response to higher fuel costs.(MyTVCebu)