Rate down from 4.5% yr-earlier, up from 3.1% in Dec
More than 2 million Filipinos among the workforce found no job in January this year, driving the country’s unemployment rate that month to 4.3 percent, down from 4.5 percent a year earlier but up from 3.1 percent in December last year, data released by the Philippine Statistics Authority (PSA) on Thursday showed.
The 4.3 percent unemployment rate in January 2025 is the highest since July 2024, when unemployment hit 4.7 percent, the PSA said.
Over the month from December 2024 to January 2025, the number of jobless Filipinos has risen by more than half a million, reflecting the end of seasonal employment during the Christmas season when demand for temporary workers typically surges, the PSA said. Data showed only 1.63 million Filipinos were unemployed in December and that number grew to 2.16 million the following month of January.
“Maybe we can relate this (month-on-month increase in unemployment) to the Christmas season because, in December, we naturally expect a higher demand for workers, leading to a higher employment rate and an increase in the number of employed individuals. This is usually the trend—if you look at the data series, that’s really how it goes. The number of employed workers shoots up in December and then suddenly drops in January because the demand for workers decreases after the holiday season,” PSA Deputy National
Statistician Divina Grace del Prado said in a press briefing in Quezon City on Thursday.
The country’s employment rate, on the other hand, stood at 95.7 percent in January, with 48.49 million Filipinos having jobs during the period, PSA data showed.
In December last year, the employment rate was higher at 96.9 percent, with 50.19 million Filipinos employed. Earlier that year, in January, the employment rate was 95.5 percent, with 45.9 Filipinos having jobs.
Seasonal factors
John Paolo Rivera, Philippine Institute for Development Studies senior research fellow, said the rise in unemployment is largely influenced by seasonal factors and structural issues.
“The end of the holiday season leads to a natural decline in temporary jobs in retail, hospitality, and logistics, which artificially inflated employment figures in December. Many companies hold off on hiring at the start of the year as they reassess budgets, economic conditions, and business strategies,” Rivera told Malaya Business Insight.
Although inflation caused no worry among investors, caution remained toward business expansion and hiring, he said.
“While inflation has moderated, businesses are still cautious about expansion and hiring due to lingering cost pressures and consumer spending constraints. Also, the skills gap remains an issue, where some sectors such as information technology (IT), healthcare, and digital industries struggle to fill positions while others face job losses due to shifts in market demand and technology adoption,” Rivera said.
POGOs exit, Trump factor
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said aside from seasonal factors, the increase in unemployed persons in January may also be attributed to the ban on and exit of Philippine Offshore Gaming Operators (POGOs) from the country, which he said resulted in some oversupply in condo units and reduced new property development, and that could also have affected jobs in the real estate sector.
“POGO exit/ban could have adversely affected direct and indirect jobs in related businesses and industries that are part of the supply chains/ecosystem of POGOs,” Ricafort said.
“For the coming months, (US President Donald) Trump’s protectionist policies could (also) lead to slower global trade, investments, employment, other economic activities, and overall economic growth globally and locally,” Ricafort said.
Underemployment
The PSA said underemployment in the country rose to 13.3 percent in January, with 6.47 million Filipinos expressing a desire to work additional hours in their current job, or to work extra jobs, or be employed elsewhere with longer hours of paid work.
The underemployment rate in January was up from the preceding month’s 10.9 percent, when there were 5.48 million underemployed Filipinos. In January a year earlier, underemployment was at 13.7 percent, equivalent to 6.3 million Filipinos that were underemployed.
The PSA said the labor force participation rate (LFPR) in January 2025 was estimated at 63.9 percent, which translates to a total of 50.65 million Filipinos aged 15 years old and above who were in the labor force, or those who were either employed or unemployed.
In the previous month, December, the country’s LFPR was 65.1 percent, with 51.81 million as part of the labor force. Earlier, in January 2024, the Philippines’ LFPR was 61.1 percent, translating to 48.06 million Filipinos in the job market.
Govt support
To support the labor market, the National Economic and Development Authority (NEDA) said the government will cultivate “a dynamic and investment-friendly economy,” while equipping the workforce with industry-standard skills.
“Our strategy remains clear: to sustain job creation by fostering a dynamic and investment-friendly economy while preparing our workforce for high-growth and emerging industries that offer high-quality, well-paying jobs,” NEDA Secretary Arsenio Balisacan said in a statement.
The NEDA head also emphasized the importance of resilience in the agriculture sector in addressing vulnerable employment.
He said the government will continue strengthening and modernizing its early warning systems to enhance disaster preparedness by utilizing artificial intelligence (AI) for improved prediction models.
“To further support growth and investment in the IT-business process management sector, the government, working closely with industry players, will promote the reskilling and upskilling of the workforce to meet the industry’s advanced skill requirements amidst AI integration,” Balisacan said.
In a separate statement, Finance Secretary Ralph Recto expressed optimism about the growing involvement of youth in the labor market.
The Department of Finance (DOF) cited the youth labor force participation rate (LFPR among those aged 15 to 24 years), which rose to 31.8 percent from 29.7 percent in the same month last year. The DOF saw this as an indication of greater involvement of young Filipinos in the labor market.
Compared with the preceding month, however, when the LFRB stood at 31.9 percent, the latest rate eased slightly, PSA data showed.
“We have a multifaceted strategy to sustain our dynamic labor market, focusing on education and workforce development, infrastructure, and investments,” Recto pointed out.
“We are investing heavily in both intellectual and physical infrastructure. In fact, for the first time in our history, our national budget allocations for both education and infrastructure hit over the trillion-peso mark,” he added.
