The country’s unemployment rate rose in January due to the seasonal drop in employment after the holiday season, coupled with the impact of a petrochemical company’s shutdown and the ongoing exit of POGOs from the Philippines.
The Philippine Statistics Authority (PSA) reported that the country’s unemployment rate declined to 4.3% in January 2025, higher from a record low of 3.1% in December 2024.
The January figure, however, was lower than the 4.5% recorded in January 2024.
Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort attributed recent fluctuations in local employment data primarily to seasonal factors, specifically the post-holiday decline following the Christmas season’s employment surge as well as weather conditions.
Ricafort added that the ban and exit of POGOs have led to an oversupply of condo units and reduced property development, impacting construction, real estate activity, and employment.
He also cited the closure of a petrochemical company and the entry of new workers into the labor force as contributing factors to the unemployment rate.
Moving forward, Ricafort expects a boost to employment due to preparations for the May 2025 midterm elections. He cited the accelerated completion of government infrastructure projects and increased campaign spending at both national and local levels will stimulate demand for goods and services, leading to job creation in sectors like construction, food, transportation, and events.
In January 2025, the employment rate was recorded at 95.7%, higher than the employment rate in January 2024 at 95.5%. In October 2024, the employment rate was estimated at 96.1%.
The PSA also reported that more Filipinos entered the labor market. Labor force participation rose to 63.9%, up from 61.1% during the same period last year.
This rise equates to an additional 2.6 million individuals across all age groups joining the labor force, of which 1.4 million are in their prime working age.
NEDA Secretary Arsenio M. Balisacan attributed the labor market’s strong performance to the government’s commitment to creating an enabling business environment while equipping the workforce with industry-relevant skills.
In a separate statement, Finance Secretary Ralph G. Recto welcomed the 2.6 million additional jobs created for Filipinos at the start of 2025, expressing optimism over the rising participation of youth in the labor market.
“This good news affirms that our efforts to unlock the full potential of our demographic sweet spot are paying off. Through targeted government action and strategic reforms, we are not just creating more jobs—we are expanding opportunities and empowering our young workforce to drive innovation, productivity, and sustained long-term growth,” he said.
Recto is confident that youth participation in the labor force will continue to rise alongside the strengthening labor market, driven by government initiatives to harness the country’s demographic sweet spot.
“We are investing heavily in both intellectual and physical infrastructure. In fact, for the first time in our history, our national budget allocations for both education and infrastructure hit over the trillion-peso mark,” Recto added.