The labor market showed signs of resilience in late 2025 as the unemployment rate retreated from a three-month peak, though a series of powerful typhoons tempered the recovery in key service sectors.

The Philippine Statistics Authority (PSA) reported on Wednesday, Jan. 7, that the jobless rate fell to 4.4 percent in November from five percent in October. The decline represents approximately 2.25 million unemployed individuals, an improvement from the 2.54 million recorded a month earlier.

Despite the monthly progress, the labor market remains tighter than a year ago, when the number of jobless Filipinos stood at 1.66 million.

National Statistician Dennis Mapa explained that while the headline figures improved, the year-on-year comparison revealed the workforce still grappling with the aftermath of natural disasters and shifting sectoral demands.

“Because of these typhoons, there’s a slowdown in economic activities,” Mapa said. “The strong typhoons that we experienced in November affected workers, especially in the labor market.”

Total employment for November reached 49.26 million, translating to a 95.6 percent employment rate. This is an increase from the 95 percent recorded in October, though it lags slightly behind the 96.8 percent seen in November 2024.

Meanwhile, underemployment, a measure of those seeking additional work hours, showed marked improvement, falling to 10.4 percent from 12 percent in the previous month and 10.8 percent in the prior year.

The seasonal boost typically expected during the fourth quarter was partially offset by Typhoons Tino and Uwan. These storms triggered a slowdown in economic activities that weighed heavily on the hospitality and retail sectors.

On a year-on-year basis, accommodation and food service activities shed 309,000 jobs, while wholesale and retail trade saw a reduction of 258,000 positions. Manufacturing and other services also reported significant contractions compared to 2024 levels.

However, the month-on-month data suggested a robust rebound in other areas. The “other services” category added 621,000 workers between October and November, while retail trade and education also posted significant gains. Construction also proved surprisingly resilient despite an ongoing corruption investigation into infrastructure projects.

The sector added 143,000 workers in November, with Mapa noting that the labor force in construction has grown by 203,000 since July, compared to the same period in 2024. While overall growth in the sector has slowed compared to the previous year due to project bans and weather disruptions, the total headcount has not declined.

Meanwhile, Economic Planning Secretary Arsenio Balisacan said the government is focusing on the "Tatak Pinoy" strategy to bolster sectors such as IT-business process management and agro-processing.

“Strengthening workforce competitiveness is one of the key elements to attract investments that generate quality jobs,” Balisacan said.

With the 2026 General Appropriations Act prioritizing education and upskilling, the administration aims to insulate the workforce from future climate-related shocks.

“The 2026 National Budget serves as a strategic roadmap for safeguarding economic recovery and sustaining progress toward our long-term development goals. It prioritizes investments in education, health, agriculture, social protection, and job creation—sectors fundamental to building a more inclusive, competitive, and resilient Philippine economy,” Balisacan said.