UNEMPLOYMENT rose to a three-month high in June as job creation failed to keep pace with an increase in the country’s labor force.
The Philippine Statistics Authority (PSA) on Thursday reported the joblessness had risen to 4.9 percent from 4.8 percent in May and was also higher than the year-earlier 3.7 percent. It was the highest seen since the 5.0 percent seen in March this year.
The country’s labor force — persons aged 15 and above who are either employed or jobless — rose to 53.25 million in June, up from 52.13 million and 52.42 million a month and a year earlier, respectively.
The labor force participation rate — the percentage of the working-age population with jobs or actively seeking employment — improved to 65.1 percent from 63.8 percent in May but fell from 65.7 percent in June last year.
Chinabank Research said this was partly due to the entry of fresh graduates into the workforce.
“However, job creation has not kept pace, particularly among those aged 15-24, resulting in a higher unemployment rate,” it added.
The number of unemployed persons was estimated at 2.59 million, higher than the 2.50 million recorded in May 2026 and the 1.95 million posted in June 2025.
Underemployment — a measure of those wanting more work or an extra job — eased to 12.1 percent from 12.2 percent a month earlier. It was, however, higher than the 11.4 percent in June 2025.
Chinabank said higher living costs likely encouraged more Filipinos to seek employment, increasing labor force participation.
“Higher living costs likely encouraged more Filipinos to seek work,” it said.
The services sector again accounted for the largest share of employment in June at 62.7 percent, followed by agriculture at 20.0 percent and industry at 17.3 percent.
Among the subsectors, wholesale and retail trade and the repair of motor vehicles and motorcycles had the highest share of employment (19.6 percent), followed by agriculture and forestry (17.7 percent) and construction (9.7 percent).
Meanwhile, fishing and aquaculture employment fell by 467,000, with Chinabank pointing to high diesel prices that continued to squeeze margins in the fuel-dependent industry.
Construction employment also declined by 139,000, likely reflecting pressure from high construction material costs.
Chinabank said several proposed policy measures could provide support to workers and businesses, including a higher fuel subsidy for public utility vehicle drivers, tax relief for micro and small enterprises, a higher income tax-exempt threshold and minimum wage increases.
The government is set to raise the fuel subsidy for PUV drivers from P10 to P12 per liter effective Aug. 15.
“The measure should provide temporary relief to transport workers and help ease operating costs,” Chinabank said.
Chinabank also pointed to the proposed exemption of micro and small enterprises from the minimum corporate income tax as a measure that could reduce business expenses and potentially support expansion and hiring plans.
Another proposed measure is the increase in the income tax-exempt threshold from P250,000 to P350,000, which Chinabank said “would increase the take-home pay of more than 3 million Filipinos and boost their purchasing power.”
