Jobless Filipinos reach nearly 3M
The Philippine labor market weakened at the start of the year and is likely to remain under pressure amid the Middle East crisis, after the number of jobless Filipinos rose to 2.96 million, its highest level since 2022, according to the Philippine Statistics Authority.
Unemployment in the country soared to 5.8 percent in January, the highest level since June 2022’s 6.03 percent, when the country was still reeling from the pandemic and the Russia-Ukraine war.
The weakening labor market came as the labor force participation rate (LFPR) slipped 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, said the latest figures “effectively erased four years of labor market recovery in a single year.”
“This indicates that nothing structural has occurred in the last four years to stably improve the labor market. The LFPR slipping compounds this—it means the true labor market weakness is even broader than the headline rate suggests, since discouraged workers who stopped looking aren’t even counted in the unemployment figure,” he said.
Measures of job quality also deteriorated. About 6.35 million employed Filipinos reported seeking additional work or longer hours to boost their income, up sharply from 3.93 million in December. This pushed the underemployment rate to 13.2 percent from 8 percent.
Smaller work force
Meanwhile, the employment rate fell to 94.2 percent, equivalent to 47.94 million Filipinos with jobs, from 95.6 percent or 49.43 million in December.
“January is usually a time when unemployment rises as the economy shifts away from the holiday season. However, January 2026’s 5.8 percent is a genuine alarm signal, not just a seasonal blip,” Lanzona added.
The figure of 5.8 percent is more than double the average jobless rate of 2.494 percent from 2016 to 2025.
Employment took a hit across major sectors. Agriculture and forestry shed the most workers, losing 1.76 million, likely due to the resumption of rice importation after a ban last year.
This was followed by wholesale and retail trade, which lost 888,000 and construction, 199,000.
More pressure ahead
Even before the Middle East war, the country has already been facing economic uncertainty after disappointing growth last year. This, according to an economist, reflected in labor market weakness.
“Firms may be responding to economic uncertainty by relying more on temporary arrangements rather than committing to permanent hires. While this helps sustain employment levels, it also indicates fragility in job quality, as workers face less stable income and fewer benefits,” said John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies.
Looking ahead, the labor market may face stronger headwinds as the Middle East conflict drives oil prices higher, with the impact likely to spill over to the broader economy—from energy and transport to food prices.
Chinabank Research warned that risks in the labor market will remain elevated.
“Repatriation of OFWs (overseas Filipino workers) from the Middle East could further weigh on labor conditions. At the same time, the unexpected spike in oil prices could raise production costs for firms, potentially prompting businesses to freeze or delay hiring plans,” Chinabank said.
“Transport workers also face rising risks, as consumers trim discretionary travel and transport spending in response to higher fuel costs,” it added.
In response, the Department of Economy, Planning and Development (DepDev) is ramping up efforts to cushion the war’s impact on the labor market.
“Our priority is clear: create more and better jobs at home, strengthen industries, equip our workers with the skills needed for higher-value employment and ensure that those affected by global disruptions, including OFWs, can transition smoothly into productive opportunities here in the Philippines,” DepDev Secretary Arsenio Balisacan said.
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