Jobless rate falls to 3.7 percent in June, lowest in 6 months — PSA

Trisha Anne Segumban

The Philippine Statistics Authority (PSA) reports on August 7 that the country’s unemployment rate eased to 3.7 percent in June 2025, the lowest in six months, as inflation and borrowing costs decline.

The data shows that 1.95 million Filipinos are unemployed in June, down from 2.03 million in May.

PSA bases its report on a labor force survey conducted among 11,148 households nationwide. 

The improvement is mainly driven by job creation in the wholesale and retail trade sector, which adds 908,000 new jobs.

According to Franco Gabriel Gonzales, economist at Oikonomia Advisory and Research Inc., consumer demand is the main driver of this hiring surge.

“Lower prices and the reduced cost of borrowing boost consumer spending, increasing the demand for goods and services,” Gonzales explains.

He notes that businesses respond to this demand by hiring more workers, especially in retail.

However, while the headline numbers show a decrease in unemployment, labor analysts caution that job quality remains a concern. 

The labor force participation rate slightly dips to 65.7 percent in June, from 65.8 percent in May, and from 66 percent in the same month last year.

The PSA cites family responsibilities, retirement, and schooling as the top reasons why individuals exit the labor force.

Meanwhile, the underemployment rate falls to 11.4 percent, a four-month low, suggesting some improvement in working conditions.

But the proportion of wage and salaried workers—used as an indicator of job stability—declines to 63 percent from 63.8 percent. 

In contrast, the percentage of unpaid family workers increases to 8 percent from 7.5 percent. 

Leonardo Lanzona, labor economist at Ateneo de Manila University, warns that the statistics may present a misleading picture of the labor market. 

“When people take informal or unpaid work, they’re often accepting worse conditions out of necessity,” Lanzona says. 

He adds that these workers remain economically vulnerable, often without benefits or job security, and may be earning below subsistence levels.

Lanzona also points out that informal workers may not be fully captured in underemployment statistics. 

The Philippine unemployment rate has remained relatively low since early 2025, supported by post-pandemic economic recovery and moderate inflation levels.

According to PSA archives, the lowest recorded jobless rate was 3.1 percent in December 2024, followed by a slow upward trend until May.