While the country’s workforce grew from 47.79 million to 48.16 million in October 2024 — or by 370,000 — the National Statistician expressed concern that underemployment in the Philippines has risen from 11.7 percent to 12.6 percent, reflecting a troubling trend in the country’s labor market. This increase is especially apparent in sectors such as wholesale and retail trade, agriculture and forestry, with notable spikes in fishing and aquaculture, as well as in retail trade sales outside traditional stores or markets.

Underemployment is often linked to a reliance on low-paying, seasonal, or informal jobs. The latest data, showing increases in sectors like wholesale trade, agriculture, and fishing, reflect the precarious nature of work in these areas, where many individuals are stuck in low-wage, unstable jobs that offer little room for growth or security.

This situation also points to a misalignment between the education system and the needs of the labor market. The rise in underemployment signals that many workers, particularly in rural areas, are not equipped with the skills demanded by modern industries. Meanwhile, businesses are struggling to fill positions that require higher technical expertise, innovation, and adaptability.

Economic Planning Secretary Arsenio Balisacan has been consistently advocating for government policy that is geared toward promoting sectors that are poised for growth and innovation, such as information technology, renewable energy, and advanced manufacturing. Support for  agriculture and fisheries in ways that enhance productivity, sustainability, and income opportunities for workers, is equally important.

One way to boost job quality is by prioritizing entrepreneurship and small-medium enterprises (SMEs). Go Negosyo has been actively promoting such initiatives, while prodding the government to offer incentives, funding, and infrastructure support that help SMEs grow and create more stable, high-wage positions. Similarly, policies that encourage inclusive growth should ensure that industries like agriculture are modernized, through improved access to technology, training, and better infrastructure. This would address the fundamental issue of income disparity in rural areas.

A nationwide upskilling and reskilling initiative is crucial. This should include partnerships between the government, educational institutions, and industries to align training programs with current job market demands. For example, training programs in digital literacy, artificial intelligence, renewable energy, and advanced manufacturing could be tailored to address skill gaps in sectors experiencing growth. Government-run Technical-Vocational Education and Training (TVET) programs should be expanded to reach more workers, especially those in informal sectors.

Policymakers must also ensure that workers displaced by automation and digital transformations are given adequate support to transition into new roles. This includes not only reskilling programs but also social safety nets, job placement services, and mental health support to help individuals adjust to changing circumstances.

In addition, regulations that protect workers from the disruptive effects of technology—such as gig work and automation—must be introduced. Fair wages, labor rights, and access to benefits should apply to all workers, regardless of their employment arrangement. It is well that the Department of Labor and Employment (DOLE) has been quite active along these lines of action.

A truly competitive national employment strategy should focus on three key areas: alignment with market needs, skills development, and inclusive growth. This strategy must involve comprehensive planning, investment in human capital, and sectoral transformation.  Creating a workforce that is equipped to thrive in the global economy is the most effective response to the underemployment challenge.