Fewer jobs were added last year, millions remained underemployed, and stalled infrastructure projects weighed on hiring momentum.
The Philippine labor market closed 2025 under strain, marked by higher unemployment, weaker job creation, and deep losses in construction as delayed public infrastructure spending weighed on hiring. While headline figures showed relative stability toward the end of the year, a closer look at the data revealed fewer Filipinos employed compared to a year earlier, millions stuck in underpaid or insufficient work, and the slowest pace of job growth since the pandemic.
About 2.26 million Filipinos were unemployed in December 2025, slightly higher than the 2.25 million recorded in November and sharply above the 1.63 million unemployed during the same period a year earlier, according to the Philippine Statistics Authority (PSA).
The unemployment rate held steady at 4.4%, unchanged from November but well above the 3.1% posted in December 2024. While the month-on-month figure appeared stable, the year-on-year comparison pointed to a labor market that entered 2026 in a weaker position.
Employment stood at 95.6%, equivalent to 49.43 million employed Filipinos, nearly flat from November but still below the 50.19 million employed in December 2024, when the employment rate reached 96.9%. The data suggested that while job losses did not accelerate late in the year, the recovery seen earlier had stalled.
More Filipinos back in the labor force, pressure remains on pay and hours
Labor force participation rose to 64.4% in December, up from 64% in November. This translated to 51.69 million Filipinos either working or actively looking for work, higher than the 51.52 million recorded a month earlier.
The increase pointed to more households pushing back into the job market as everyday costs continued to rise and waiting for better conditions became harder to sustain. Income urgency, rather than stronger hiring confidence, appeared to be driving the renewed participation.
Underemployment stood at 8%, equivalent to 3.93 million Filipinos who had jobs but wanted additional hours or better-paying work. While lower than the 10.4%, or 5.11 million, recorded in November, the figure still showed millions whose current work arrangements struggled to cover routine living costs.
Compared with December 2024, labor force participation remained lower, while underemployment stayed elevated. More Filipinos were present in the labor market, yet many remained stuck in roles that offered limited stability or income growth.
2025 posts weakest job growth since the pandemic
For the full year, the PSA reported an employment rate of 95.8%, lower than the 96.2% recorded in 2024. This translated to 49.01 million employed individuals in 2025, up slightly from 48.84 million in 2024, resulting in a net addition of only 172,000 jobs.
National Statistician Claire Dennis Mapa said this was the lowest annual job addition since the pandemic period, compared with 1.29 million jobs added in 2023 and 664,000 in 2024.
The slowdown limited opportunities for workers to move up, change employers, or secure higher pay, while competition for available openings remained intense. Household spending adjusted accordingly, with families delaying nonessential purchases and prioritizing basic expenses. The broader economy felt the effect as weaker job growth constrained consumer demand and kept business expansion cautious, particularly among small firms dependent on everyday spending.
For 2025 as a whole, unemployment averaged 4.2%, higher than the 3.8% recorded in 2024, while underemployment stood at 11.9%, similar to the previous year.
Construction losses weigh on employment, government outlines response
By industry, the services sector continued to account for the largest share of employment in December at 62.4%, followed by agriculture at 20.7% and industry at 16.9%.
At the sub-sector level, the top job generators were wholesale and retail trade, including the repair of motor vehicles and motorcycles at 20.5%, agriculture and forestry at 18.8%, and construction at 9.7%.
However, construction also recorded the steepest losses. The construction sector shed about 550,000 jobs, a decline officials linked to delays and cutbacks in public infrastructure spending, PSA data showed. Construction had been a major source of employment in recent years, particularly for low- and middle-income workers reliant on large public projects.
In response, the Department of Economy Planning and Development said the government would pursue measures to improve the labor market environment and support job creation. Undersecretary Rosemarie G. Edillon said efforts would include resuming delayed infrastructure projects, reducing the cost of doing business, and expanding training and reskilling programs.
“As we make 2026 a rally point to revitalize PDP implementation, we will prioritize employment creation by restoring consumer and business confidence, reduce the cost of doing business, encourage innovation, and expand training and reskilling opportunities,” Edillon said.
The agency also said it would support the adoption of digital technologies and high-productivity sectors, including IT-BPM and advanced manufacturing, alongside skills initiatives under the Trabaho Para sa Bayan Plan 2025–2034 and the National Education and Workforce Development Plan 2026–2035.
Data from the Philippine Statistics Authority show that only 172,000 net jobs were added for the year, the slowest pace since the pandemic, even as more Filipinos returned to the labor force and millions struggled with underemployment.
