The Philippines’ unemployment rate rose sharply to 6% in July 2026, its highest level in four years, prompting Malacañang to assure the public that the government is taking steps to address the worsening employment situation.
Palace press officer and Undersecretary Claire Castro said the government is focused on improving the ease of doing business, which she said could encourage more investors to establish operations in the Philippines and create jobs for Filipino workers.
Castro was responding to remarks by Department of Economy, Planning, and Development Secretary Arsenio Balisacan on the latest labour market data released by the Philippine Statistics Authority (PSA).
“[The government] continues to reform the National Education and Workforce Development Plan for 2026 to 2035,” Castro said, noting that the reforms are aligned with ASEAN Mutual Recognition Arrangements for Qualifications and Skills Certification.
Unemployment reaches four-year high
According to the PSA, the unemployment rate reached 6.0% in July, up sharply from 4.9% in June and 5.3% a year earlier. It was the highest unemployment rate recorded since June 2022, when it stood at 6.03%.
The number of unemployed Filipinos rose to 3.14 million in July, compared with 2.59 million in June. The employment rate also declined to 94.0% from 95.1% in June and 94.7% a year earlier. However, the number of employed people increased year-on-year to 49.21 million from 46.05 million in July 2025.
The services sector remained the largest source of employment, accounting for 62.8% of employed Filipinos. Agriculture represented 19.7%, while industry accounted for 17.5%.
Wage and salary workers made up 66.1% of the employed population, followed by self-employed workers without paid employees at 27.2%, unpaid family workers at 4.7% and employers in family-operated farms or businesses at 2.0%.
Government points to investment and skills development
Castro said improving the ease of doing business remains an important part of the government’s response to unemployment.
She said faster processing of requirements could help investors enter the country more easily and subsequently create employment opportunities for Filipinos.
The government is also continuing its reform of the National Education and Workforce Development Plan for 2026–2035, with the reforms aligned with ASEAN frameworks for recognising qualifications and skills certification.
The Palace also attributed part of the rise in unemployment to overseas Filipino workers (OFWs) who lost their jobs amid the conflict in the Middle East and were subsequently repatriated to the Philippines.
DOLE expands job placement efforts
Despite the deterioration in labour market conditions, Castro said the Department of Labor and Employment (DOLE) continues to organise nationwide monthly Trabaho Agad job fairs and strengthen employment placement networks, including Public Employment Service Offices.
Meanwhile, the underemployment rate rose to 12.9% in July from 12.1% in June, representing around 6.33 million Filipinos seeking additional work, longer hours or another job to increase their income. However, the July rate was lower than the 14.8% recorded a year earlier.
The labour force participation rate stood at 63.6% in July, down from 65.1% in June but higher than the 60.7% recorded a year earlier.
Among young Filipinos aged 15 to 24, the labour force participation rate increased to 33.7% from 29.5% a year earlier. The youth employment rate, however, edged down to 81.4% from 81.9%.
The proportion of young people not in education, employment or training declined to 15.2% from 15.9% a year earlier.
Average weekly working hours also fell to 40.6 hours in July from 42 hours a year earlier, indicating softer working hours even as overall employment remained above the previous year’s level.