The unemployment rate in the Philippines fell to 3.8 percent in February 2025 from 4.3 percent in January, but rose from 3.5 percent in February 2024, the Philippine Statistics Authority (PSA) said on Tuesday.
The rates show that the number of jobless individuals in the country dropped to 1.94 million in February this year from 2.16 million in the preceding month but climbed from 1.8 million jobless Filipinos in the comparative year-earlier period.
National Statistician Claire Dennis Mapa said in a press conference in Quezon City the number of individuals who joined the labor force in February 2025 increased by about 345,000 from a year earlier.
“Not everyone gets absorbed into the labor market,” Mapa said. “Out of the 345,000, we have 204,000 who are employed, but 141,000 are unemployed — and that’s what caused the rise (year-on-year) in our unemployment rate. More people participated, but not all were absorbed by our labor market,” Mapa said.
The situation is a typical scenario seen in past Labor Force Surveys (LFS), he pointed out. “When there is an increase in the labor force participation, not all potential workers are absorbed as employed persons,” Mapa said, adding that one of the factors behind that is the potential job skills mismatch.”
During the briefing, Mapa said the major industries with the largest drop in employment year-on-year are agriculture and forestry (down 949,000), administrative and support service activities (down 201,000), and transportation and storage (down 158,000).
Comparable to Asia
In a statement, the National Economic and Development Authority (NEDA) said the country’s unemployment rate is comparable to Asian economies, including Malaysia (3.1 percent) and Vietnam (2.2 percent), but lower than China (5.4 percent) and India (6.4 percent).
NEDA Secretary Arsenio Balisacan said the government aims to fast-track the implementation of projects generating high-quality jobs while intensifying efforts to secure strategic investments, promote a dynamic and innovative business environment, and diversify growth drivers.
“The continued rollout and implementation of high-impact infrastructure flagship projects, particularly in energy, transport and digital connectivity, will boost domestic employment and business activity,” he added.
Feb employment 96.2%
The latest labor survey showed that the country’s overall employment rate for February stood at 96.2 percent, with 49.15 million Filipinos having jobs during the period.
This is lower than the recorded employment rate in February 2024 at 96.5 percent. The employment rate in January 2025 was estimated at 95.7 percent.
In nominal terms, however, the number of Filipinos with jobs in February 2025 was higher than that of employed persons, which was 48.95 million in February 2024 and 48.49 million in January 2025.
Underemployment eases to 10.1%
The PSA said the underemployment rate in February 2025 improved to 10.1 percent from 13.3 percent in the preceding month of January, and from 12.4 percent in February 2024. It is also the lowest since May 2024’s underemployment rate of 9.9 percent.
In terms of magnitude, 4.959 million of the 49.15 million employed individuals expressed the desire to have additional hours of work in their present job, to have an additional job, or to have a new job with longer hours of work in February 2025.
The number of underemployed persons significantly improved from January 2025’s 6.469 million and February 2024’s 6.076 million.
DOF: growing middle class
In a separate statement, the Department of Finance highlighted that almost two-thirds of the workforce were wage and salary workers, indicating a growing and expanding middle class.
“This is a very encouraging development. A strong and growing workforce means rising incomes, greater spending power, and sustained job creation. This fuels consumer demand and pushes our economy forward,” Finance Secretary Ralph Recto said.
“We must continue to boost domestic demand, especially during uncertain times marked by trade wars. A strong and resilient domestic market is our best defense,” Recto said.
Meanwhile, Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said that with better weather conditions so far in early 2025, employment in agriculture and many other industries could improve. That may be expected after the seasonal slowdown in employment upon crossing the new year in January, right after the Christmas holidays that required more workers amid the peak in spending and sales by many businesses and industries, he said.
“There could already be some pick-up in production and inventory-building in preparation for the Holy Week holidays in April 2025 and the midterm elections in May 2025, when there will be fiestas and festivities around the country amid the summer vacation season, all of which would lead to higher sales and demand,” he said.
Ricafort said the midterm election campaign would also require more jobs for the candidates and for the businesses that supply the candidates/donors/other beneficiaries of election-related spending.
Increased government spending, especially on infrastructure and other projects and programs, especially before the election ban, would also benefit their respective supply chains, which would all entail more jobs, he said.
John Paolo Rivera, PIDS senior research fellow, said: “The increase in the unemployment rate despite healthy job creation largely reflects increased labor force participation, particularly from new entrants such as fresh graduates and returning workers.”
While this is generally a good sign, it underscores a mismatch between job seekers’ skills and available opportunities, he said.
Many new labor market entrants may lack the technical skills or industry-specific experience needed for in-demand roles. Rivera said some sectors, especially those dependent on external demand (electronics, exports), have yet to fully recover or expand hiring.
