THE COUNTRY’s unemployment rate rose to 4.4% in December amid a pointy contraction in construction jobs, bringing the full-year average to a two-year high of 4.2%, data from the Philippine Statistics Authority (PSA) showed.
Preliminary data from the Labor Force Survey (LFS) showed the jobless rate in December was higher than the three.1% posted in December 2024. Nevertheless, this was unchanged at 4.4% from November.
The variety of unemployed Filipinos increased to 2.26 million in December, higher than the 1.63 million logged in December 2024 and the previous month’s count of two.25 million.
For 2025, the jobless rate averaged 4.2%, such as 2.14 million jobless Filipinos. This was higher than the three.8% jobless rate in 2024, which translated to 1.94 million jobless Filipinos.
The 2025 unemployment rate was the fastest in two years or because the 4.4% posted last 2023.
National Statistician Claire Dennis S. Mapa attributed the drop in unemployment in December to declines in public construction.
The development sector recorded the most important job losses in December, shedding 550,000 employees 12 months on 12 months, while administrative and support services posted the largest gain with 385,000 additional employees, PSA data showed.
“We all know from our fourth-quarter GDP (gross domestic product) report that within the fourth quarter, [the growth rate] in construction really declined. It was negative there in construction, particularly public construction,” Mr. Mapa said in mixed English and Filipino.
The country’s GDP growth eased to three% annually within the fourth quarter, the slowest growth recorded because the 3.8% contraction in the primary quarter of 2021 at the peak of the coronavirus pandemic.
This dragged the full-year growth to 4.4% in 2025, the bottom growth in five years or because the pandemic-induced contraction of 9.5% in 2020. It fell in need of the federal government’s 5.5% to six.5% goal amid the multibillion-peso flood control scandal.
In a research note, Chinabank Research said the job losses in construction were because of reduction of presidency outlays on infrastructure projects in the ultimate three months of 2025.
“Job creation within the sector may remain subdued as heightened scrutiny amid governance concerns may proceed to delay public construction activities,” Chinabank Research said.
“Climate impacts and corruption scandals made a major dent on employment in 2025,” said University of the Philippines Diliman School of Labor and Industrial Relations (UP SOLAIR) Assistant Professor Benjamin B. Velasco in a Messenger chat.
“Rains and floodings from so many typhoons, including several strong ones, severely affected climate vulnerable sectors like agriculture and fisheries. Meanwhile the ban on flood control projects within the wake of the huge corruption scandal hit jobs in construction,” he added.
Meanwhile, job quality improved because the underemployment rate slipped to eight% (3.93 million), down from 10.9% (5.48 million) in December 2024 and 10.4% (5.11 million) within the previous month.
This was also the bottom underemployment rate since April 2005, when the PSA redefined underemployment as individuals who’re employed but seek additional jobs or work hours.
“The decline in underemployment allows employees to take part in the upskilling and reskilling initiatives to be rolled out by government,” said Department of Economy, Planning, and Development Undersecretary Rosemarie G. Edillon in a press release.
“We’ll proceed to work closely with Congress to institute reforms to make our labor market environment dynamic and aware of the evolving world of labor.”
For 2025, the typical underemployment rate held regular at 11.9% since 2024. This is the same as 5.823 million underemployed Filipinos last 12 months, higher than 5.818 million in 2024.
Chinabank Research said that underemployement normally eases near the yearend because of higher discretionary income.
“A lower underemployment rate doesn’t necessarily imply improved job quality, as some underemployed employees can have exited the job market in December amid weak demand,” it added in a note.
Josua T. Mata, secretary-general of Sentro ng mga Nagkakaisa at Progresibong Manggagawa, said that the rise in unemployment during December “when employment must have peaked” was attributable to low-quality jobs.
“The corruption scandal and the federal government’s bungled response played a serious role on this dismal end result. Construction alone lost an enormous variety of jobs after the federal government selected to freeze projects somewhat than decisively address corruption,” he said in a Viber message.
Employment rate dipped to 95.6% in December from the 96.9% posted in December 2024 but remained regular from November.
The December figure represented 49.43 million employed Filipinos, down from 50.19 million employees in December 2024. Nevertheless, this was a rise from 49.26 million employees in November.
For 2025, the typical employment rate fell to a two-year low of 95.8%, from the 96.2% logged in 2024. This accounts for 49.01 million employed Filipinos in 2025, higher than the 2024 average of 48.84 million.
“Admittedly, in our data during the last three years, that is the bottom additional employed individuals 12 months on 12 months,” said Mr. Mapa.
“In 2023 versus 2022, our addition there was 1.29 million. In 2024 versus 2023, our addition in employed individuals was 664,000. And this 2025, 172,000. So it’s lower in comparison with the past two years.”
Meanwhile, the labor force participation rate (LFPR) edged all the way down to 64.4% in December from 65.1% a 12 months earlier, though it ticked up from 64% in November. The labor force totaled 51.69 million, down from 51.81 million in December 2024 but up from 51.52 million in November.
This brought the country’s workforce size to a median of 51.16 million in 2025, up from 50.78 million in 2024. This translated to an LFPR of 64.1% in 2025, down from 64.4% in 2024.
In December, the services sector employed probably the most employees, accounting for 62.4% of the overall workforce.
The agriculture and industry sectors got here next, accounting for 20.7% and 16.9% of the overall variety of employed individuals, respectively.
Wage and salary employees made up nearly all of employed Filipinos in December at 64.2%, followed by self-employed individuals without paid employees (27.4%), unpaid family employees (6.9%), and employers in family-operated farms or businesses (1.5%).
For UP SOLAIR’s Mr. Velasco, climate stays an employment risk this 12 months.
“Climate is each a risk and opportunity. If we make a decisive shift to public employment in green jobs, then we will open up possibilities amid a crisis,” he said. — Pierce Oel A. Montalvo