DOMESTIC labor market conditions improved in August from July’s sharp deterioration as fresh graduates found jobs, with unemployment easing from a four-year high.
The jobless rate improved to 5.3 percent after it surged to 6.0 percent in July from 4.9 percent a month earlier but was still higher than the 3.9 percent recorded a year ago.
It was equivalent to 2.77 million unemployed Filipinos, lower than July’s 3.13 million but up from August 2025’s 2.03 million.
“The labor market improved in August from the previous month, as the entry of fresh graduates into the labor force appears to have been partly absorbed,” Chinabank Research said.
Labor force participation — a measure of how much of the working age population has jobs or are actively looking for work — hit 64.0 percent, higher than the 63.6 percent in July but down from the year-earlier 65.1 percent.
About 897,000 people entered the labor force in August, lower than the 1.5 million recorded in July. Of the new entrants, around 470,000 found jobs.
Underemployment, which counts those looking for more work or an extra job, recorded a downtick to 11.9 percent from 12.9 percent a month earlier. It was higher than the 10.7 percent seen in August 2025.
“In terms of magnitude, 5.90 million of the 49.79 million employed individuals expressed the desire to have additional hours of work in their present job, or to have an additional job, or to have a new job with longer hours of work,” the Philippine Statistics Authority said.
Chinabank said heavy rains and flooding would have limited workers’ ability to report for work.
It warned that “underemployment could pick up again as rising food prices, transport fares and services costs push workers to look for additional hours of work or more sources of income.”
The services sector continued to account for the largest share of employment at 61.7 percent in August, followed by agriculture (20.9 percent) and industry (17.3 percent).
Agriculture recorded the largest annual increase in employment, adding 532,000 jobs.
Manufacturing, meanwhile, recorded the largest employment decline, shedding 350,000 workers. It marked a third consecutive month of employment contraction.
“Looking ahead, the softer labor market conditions in Q3 (third quarter) could serve as an early indication of a still subdued GDP (gross domestic product) growth during the quarter,” Chinabank said.
Wage and salary workers comprised the majority of the workforce at 64 percent. Following were the self-employed (27.5 percent) and unpaid family workers (6.6 percent).
Private sector workers accounted for 78.4 percent of wage and salary workers, and 50.3 percent of the total number of employed Filipinos.
Those working for the government, meanwhile, had a 14.2-percent share of wage and salary positions, and 9.1 percent of total employment.
