Philippine Unemployment Hits Post-Pandemic High of 6%

MANILA, Philippines — The country’s labor market showed fresh signs of strain in July as more fresh graduates struggled to find jobs, pushing unemployment to its highest level since the pandemic era. According to data by the Philippine Statistics Authority (PSA) released on Tuesday, the unemployment rate surged to 6 percent in July from 4.9 percent in June. This was equivalent to 3.14 million jobless Filipinos, up from 2.59 million in June. The latest figure marked the third straight month of increase and was the highest in four years, or since June 2022, when unemployment also stood at 6 percent. This was also the first time unemployment reached the 6-percent level after staying between 4.7 percent and 5.8 percent since the start of the year. READ: Unemployed Filipinos rise slightly to 2.59M in June Month-on-month, the labor force participation rate declined to 63.6 percent from 65.1 percent, translating to a labor force of 52.36 million from 53.25 million. But quarter-on-quarter, it increased from 62.7 percent, or 51.3 million. Metro Manila had the highest unemployment rate at 8.2 percent. National Statistician Claire Dennis Mapa said the sudden rise in unemployment was due to new participants estimated at 1.33 million who have joined the labor market but are not yet absorbed into the workforce. The age group of these entrants was pegged at 15 to 24 years old. The employment rate declined one percentage point in July from 95 percent in June, with the number of employed Filipinos falling to 49.21 million from 50.55 million. The number of underemployed Filipinos, meanwhile, rose to 12.9 percent from 12.1 percent. This represented 6.33 million underemployed Filipinos, up from 6.11 million in June. The Department of Economic Planning and Development (DepDev) said the spike in unemployment is a challenge. “More Filipinos are participating in the labor market, which means that we need to intensify efforts to attract investments, especially those that create quality jobs,” DepDev Secretary Arsenio Balisacan said. “The key is to continuously improve the ease of doing business in the country,” he said. Economist Leonardo Lanzona of the Ateneo de Manila University said the increase in unemployment is no longer a short-term absorption lag, especially since it had been climbing steadily as the share of degree holders among the jobless rose from 26.9 percent in 2020 to the latest figure of 35.6 percent. “If this were a short-run absorption lag, it would have been corrected already. We have a structural demographic mismanagement problem which means investment incentives are designed to reward capital size rather than job creation,” Lanzona said. “The economy keeps attracting capital-intensive investment that can’t absorb a growing young workforce—a design flaw no amount of job-matching or reskilling programs can fix without reforming the incentive criteria themselves,” he added. /cb