The Philippine unemployment rate rose to 4.4 percent in December 2025 from 3.1 percent a year ago, as a slowdown in construction activity weighed on the labor market, government data showed on Friday.
The Philippines Statistics Authority (PSA) said the number of unemployed Filipinos reached 2.26 million, up from 1.63 million in December 2024 and 2.25 million in November 2025. The jobless rate in November was also 4.4 percent.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the labor data reflected how government underspending on infrastructure affected businesses engaged in construction activities due to the crackdown on anomalous flood control projects.
“The political noise due to the anomalous flood control projects also weighed on [the] confidence [of] investors, both foreign and local, that led to the year-on-year decline in investments, both new and expansion projects that would have created more jobs, construction activities, and other economic activities,” said Ricafort.
He said the exit of the Philippine Offshore Gaming Operators (POGOs) in 2024 could have also contributed to the increase in job losses, citing how higher vacancy rates and excess office supply led to scaled back construction activities.
Ricafort said the government’s catch up spending plan, particularly in infrastructure, which shall be based on priority anti-corruption measures and reforms, alongside further policy rate and RRR cuts, could help boost economic growth that could lead to better employment data.
Labor force participation declined to 64.4 percent from 65.1 percent in the previous year, with overall employment levels recorded at 49.4 million. Youth unemployment also climbed to 12.2 percent from 9.1 percent, while the share of discouraged workers rose to 7.7 percent.
Department of Economy, Planning and Development Undersecretary and officer-in-charge Rosemarie Edillon said the government would prioritize job creation by restoring business confidence and reducing costs.
“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.
Despite the rise in joblessness, the underemployment rate fell to 8.0 percent from 10.9 percent in December 2024. This represents the lowest level since the current measuring series began in April 2005, affecting 3.93 million people seeking additional work hours or secondary jobs.
Edillon said the drop in underemployment provides an opportunity for workers to engage in government-led upskilling programs.
“The decline in underemployment allows workers to participate in the upskilling and reskilling initiatives to be rolled out by government. This will help Filipino workers to remain competitive in today’s dynamic business environment,” Edillon said.
The government plans to accelerate delayed infrastructure projects and facilitate the adoption of digital technologies in the IT-BPM and manufacturing sectors to sustain growth. Edillon added that expanding global capability centers and specialized digital services would help generate high-value positions.
Policy focus will remain on supply-side measures, including the Enterprise-Based Education and Training Framework Act and the Trabaho Para sa Bayan Plan 2025-2034.
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