The Philippines saw its unemployment rate drop to 3.7% in June, the lowest in six months, as easing inflation and borrowing costs appeared to fuel hiring across key sectors. But while more Filipinos landed jobs, experts raised alarms over the stability and quality of employment being created.
According to the Philippine Statistics Authority (PSA), around 1.95 million Filipinos were jobless in June, down from 2.03 million in May. This marks the lowest jobless rate since December 2025, when unemployment fell to 3.1%. The data came from a survey of over 11,000 households nationwide.
The wholesale and retail trade sector led job creation, contributing 908,000 new roles in June. Economists link this surge to improved consumer demand brought about by slower inflation and lower borrowing costs.
“Lower prices and the reduced cost of borrowing boost consumer spending, increasing the demand for goods and services,” said Franco Gabriel Gonzales of Oikonomia Advisory and Research Inc. “With this, businesses are induced to hire more workers to meet the increased demand.”
However, despite the promising headline numbers, the labor market showed signs of fragility. The labor force participation rate slipped to 65.7% in June, a slight dip from the previous month’s 65.8% and lower than last year’s 66%. Reasons cited for leaving the labor force included family responsibilities, schooling, and retirement.
More concerning were the shifts in employment quality. The underemployment rate—which reflects those looking for more hours or additional income—fell to 11.4%, its lowest in four months. Yet the share of wage and salaried workers dropped to 63% from 63.8%, while unpaid family workers rose to 8% from 7.5%.
Leonardo Lanzona, labor economist from Ateneo de Manila University, cautioned against taking the improvements at face value.
“When people take informal or unpaid work, they’re often accepting worse conditions out of necessity, showing that they are still economically vulnerable, working without benefits or job security, and potentially earning less than they need,” Lanzona said.
He further pointed out that the decline in underemployment may not reflect actual improvement but could stem from statistical gaps that fail to fully capture informal workers.
