September jobless rate inches up amid natural disasters

By Chloe Mari A. Hufana, Reporter

THE PHILIPPINES’ unemployment rate rose to 3.8% in September from a year earlier, signaling a fragile labor recovery as natural disasters disrupted hiring ahead of the holiday season, data from the Philippine Statistics Authority (PSA) showed on Thursday.

About 1.96 million Filipinos were jobless during the month, up from 1.89 million a year earlier, when the jobless rate was 3.7%, National Statistician Claire Dennis S. Mapa told a news briefing, citing the impact of typhoons and earthquakes on employment.

Despite this, Labor Secretary Bienvenido E. Laguesma told BusinessWorld that he is “hopeful” the upcoming holiday period will spur hiring activity.

The latest jobless rate was an improvement from August’s 3.9%, when 2.03 million were out of work.

Employment stood at 49.6 million in September, slightly below September 2024’s 49.87 million.

“[Holiday hiring] usually starts in the month of September, but the pickup typically happens in the fourth quarter,” Mr. Mapa said in Filipino, noting the October results will show if hiring activity indeed picked up.

“There’s a substantial seasonality component during the fourth quarter,” he added.

For the first nine months, joblessness stood at 4.1%, a tad higher compared to the same period last year of 4%.

The other service activities industry posted the largest drop in employment annually, shedding 493,000 workers, followed by administrative and support service activities (-356,000), manufacturing (-302,000), transportation and storage (-233,000), and public administration and defense and compulsory social security (-220,000).

On a monthly basis, the other service activity industries lost 498,000 workers, followed by construction (-308,000), transportation and storage (-247,000), and financial and insurance activities (-105,000).

Explaining the almost half-a-million month-on-month drop in the other service activities sector, Mr. Mapa said this might be tied to household income.

“I can surmise that this is possibly related to household income,” he said in Filipino, noting that during the first and second quarters of the year, there was a substantial increase in domestic services. “Usually, when the income is a bit higher, this number also tends to be higher.”

For the job losses in the manufacturing industry, Mr. Mapa said this may be due to global trade uncertainty.

Job losses were seen in the areas of ready-made embroidered garments manufacturing, manufacture of electronic walls and tubes, and manufacturing of parts and accessories for motor vehicles.

Mr. Mapa noted that the manufacturing sector saw jobs decline by around 208,000 workers in the first nine months of the year.

“It’s possible that this is linked to our exports, since most of our manufacturing companies export their products — and we’re currently facing problems in global trade,” he said.

In August, the US began imposing a 19% tariff on most Philippine-made goods.

Meanwhile, employment rate stood at 96.2% in September, a tad lower than 96.3% in the same period last year.

This means 49.6 million Filipinos had jobs in September, which was lower compared to 49.87 million last year.

For the first nine months of 2025, the employment rate averaged at 95.9%, slightly lower than last year’s 96%.

The construction industry had the most job gains in September, adding 514,000 employees, followed by fishing and aquaculture (+313,000), accommodation and food service activities (+307,000), human health and social work activities (+183,000), and agriculture and forestry (+126,000).

Craft and related trades workers added 280,000 workers annually, while elementary occupations added 119,000 jobs.

Compared to August 2025, 280,000 managerial jobs were added in September, followed by clerical support workers (+138,000) and technicians and associate professionals (+104,000).

UNDEREMPLOYMENT
Job quality strengthened year on year as the underemployment rate — the share of workers seeking more hours or jobs — eased to 11.1% from 11.9% a year ago. However, it worsened from 10.7% in August due to slower activity in construction.

The labor force participation rate slipped to 64.5% in September from 65.7% a year earlier, translating to 208,000 fewer people in the workforce, the PSA reported.

Roughly 572,000 workers also left the labor force month on month.

Employment in the Philippines’ construction industry increased in September, but many workers were unable to work full-time as underemployment rose, according to Mr. Mapa.

Mr. Mapa said the impact of ongoing investigations into anomalous flood control projects is not yet fully reflected in labor force data. He noted government spending and project disbursements are captured in the gross domestic product report, which will be released on Friday.

“What we’re seeing in the labor force data is an increase in workers in the construction industry. Year-on-year — from January to September — there was a slight increase. However, we also observed a rise in underemployment,” Mr. Mapa told reporters after the briefing in mixed English and Filipino.

“When underemployment increases, it means that not all workers in that industry were able to work full-time, say 40 hours a week; some may have only worked on specific days or for fewer hours.”

OUTLOOK
In a note, Chinabank Research said September jobs data suggest the labor market remains “robust.”

“This fourth quarter, we could see better employment numbers, driven by an expected increase in demand as the holidays approach, though weather-related disruptions and external challenges could temper these gains,” it said.

Chinabank said there may be a seasonal boost in employment during the holidays, particularly in retail and tourism-related sectors like accommodation and food services.

“Potentially softer external demand amid steep US tariffs remains a risk to manufacturing activity and jobs. Additionally, weather disturbances and calamities could lead to job losses in affected areas,” it said.

University of the Philippines Diliman School of Labor and Industrial Relations Assistant Professor Benjamin B. Velasco warned that the Philippine labor market is suffering from a “double whammy” of climate impact and corruption.

“More Filipinos out of work due to natural disasters and the flood control ban, not just year on year but also month on month. If we add the half million who left the work force to the 1.96 million who are technically unemployed, that is much more than the 2.03 officially jobless in August,” he said via Messenger.

Mr. Velasco warned that the ongoing political and environmental crises will prolong the labor slump unless the government takes deliberate action.

“If the private sector is not providing enough jobs, then the government must take up the slack.”