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MANILA, Philippines — The country’s unemployment rate edged higher for a second straight month in June as the labor market struggled to absorb a fresh wave of graduates entering the workforce.
According to data released by the Philippine Statistics Authority (PSA) on Thursday, the number of unemployed Filipinos inched up to 2.59 million in June from 2.5 million in May, pushing the jobless rate to 4.9 percent from 4.8 percent.
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The uptick came as labor force participation climbed to 53.25 million, or 65.1 percent, from 52.13 million, or 63.8 percent, a month earlier.
According to the PSA, about 650,000 Filipinos entered the labor force in June. Of these, 592,000 were aged 15 to 24—mostly fresh graduates—but only 310,000 secured jobs, leaving 282,000 unemployed.
For Leonardo Lanzona, an economist at Ateneo de Manila University, the higher unemployment rate reflected a surge in labor supply rather than a weakening demand for workers.
“The June uptick in unemployment to 4.9 percent traces mainly to a labor-supply timing effect rather than a demand collapse: 650,000 first-time entrants, 592,000 of them aged 15-24 and largely fresh graduates, flooded the labor force even as participation climbed to 65.1 percent from 63.8 percent in May, and job creation simply could not absorb them at pace,” Lanzona said.
Even so, the number of employed Filipinos increased to 50.66 million from 49.63 million. However, the influx of new job seekers outpaced employment growth, causing the employment rate to ease slightly to 95.1 percent from 95.2 percent in May.
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Meanwhile, underemployment—or the number of employed Filipinos seeking additional work or longer working hours to boost their income—rose to 6.11 million from 6.04 million. Still, the underemployment rate eased slightly to 12.1 percent from 12.2 percent in the previous month.
Lanzona said the labor market also continued to feel the effects of the Middle East war, particularly on fuel-dependent industries, while longer-term pressure from artificial intelligence was beginning to weigh on hiring.
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“Higher diesel prices raised operating costs for municipal marine fisherfolk directly, contributing to a roughly 467,000 year-on-year decline in fishing and aquaculture employment,” Lanzona said.
“AI (artificial intelligence)-driven automation is (also) compressing the growth ceiling of the business process outsourcing (BPO) industry, the country’s largest formal wage-employment generator, just as youth labor supply is surging, meaning the sector that has historically cushioned new-entrant absorption is becoming less able to do so,” he added.
The warning comes as the BPO industry recently cut its 2028 employment projection to between 1.85 million and 2.14 million workers from an earlier target of 2.5 million, citing faster AI adoption and intensifying global competition. INQ
