Unemployment rate rose to 4.8% in May

MANILA, Philippines – The Philippines’ unemployment rate edged higher in May, although the broader labor market continued to show signs of resilience despite lingering pressures from the Middle East war.

Latest data from the Philippine Statistics Authority (PSA) showed that the number of unemployed Filipinos rose to 2.5 million in May from 2.41 million in April.

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This translated to an unemployment rate of 4.8 percent, slightly higher than April’s 4.7 percent. On a year-on-year basis, the figure was also higher than the 3.9 percent recorded in May last year.

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As a result, the average unemployment rate in the first five months of the year climbed to 5.1 percent, well above the 4 percent recorded in the same period last year.

Despite the increase in unemployment, other labor market indicators improved on a month-on-month basis.

The number of employed Filipinos rose to 49.63 million in May from 48.9 million in April. However, the employment rate slipped slightly to 95.2 percent from 95.3 percent.

The labor force likewise expanded to 52.13 million, equivalent to a participation rate of 63.8 percent, from 51.3 million or 62.7 percent in the previous month.

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Meanwhile, underemployment—or the number of employed Filipinos seeking additional work or longer working hours to boost their income—declined to 6.04 million, equivalent to 12.2 percent of employed workers, from 7.41 million or 15.2 percent in April.

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Leonardo Lanzona said the seemingly conflicting labor market indicators reflected the rapid expansion of the labor force.

“When the labor force participation rate rises, more people enter the active labor pool, and even if employment also rises in absolute terms, the newly active entrants who have not yet found work register as unemployed, pushing the rate up simultaneously with improving employment and underemployment numbers,” he said.

Looking ahead, the labor market could face fresh headwinds even as it continues to navigate lingering uncertainties stemming from the war in the Middle East.

One key risk is the potential impact of El Niño on the agriculture sector, which has already recorded seventh straight months of employment declines.

Another concern is the implementation of the P85 daily minimum wage increase in Metro Manila, which could prompt some businesses to automate operations, scale back hiring, or trim their workforce to offset higher labor costs amid still-elevated inflation.

Still, John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies, said labor demand has remained relatively resilient despite slower economic growth.

“The challenge is no longer just creating jobs, but creating enough quality and productive jobs that provide stable incomes,” he said.

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“Sustaining employment growth will depend on stronger investment, faster infrastructure spending and continued support for sectors with high job-generating potential such as manufacturing, tourism, construction and modern services,” he added. INQ