The Philippine labor market showed signs of mounting strain in November as the country grapples with an economic slowdown and a contraction in business activity, according to a report by GlobalSource Partners.

In a commentary released on Tuesday, Jan. 13, GlobalSource economists Diwa Guinigundo and Wilhelmina Manalac said the latest Labor Force Survey underscores the growing vulnerability for Filipino workers.

Employment conditions are weakening as the economy reels from a fourth-quarter growth performance that missed expectations, hitting just four percent in the third quarter of 2025.

“Results from the Philippines Statistics Authority’s (PSA) November 2025 LFS point to a clear weakening in labor market conditions, underscoring the growing vulnerability of employment amid slowing economic growth and recurring disruptions,” GlobalSource said.

The number of unemployed Filipinos reached 2.25 million in November, a significant jump from 1.66 million during the same month in 2024.

While the jobless rate improved on a month-on-month basis—falling to 4.4 percent in November from five percent in October—GlobalSource described this shift as largely seasonal.

The slight uptick in hiring was attributed to the year-end holiday rush, though the boost was partially tempered by the impact of Typhoons Tino and Uwan, which hampered activity in the retail and hospitality sectors.

The report also noted the “widening labor market slack” as the labor force participation rate fell to 64 percent from 64.6 percent a year earlier.

GlobalSource explained this contraction in the workforce aligns with a slump in the Purchasing Managers’ Index, which fell to 48 in November from 53.2 a year ago. A reading below 50 indicates a contraction in business activity.

GlobalSource noted that the sharpest declines occurred in wholesale and retail trade and services, sectors that traditionally absorb a large portion of the nation’s workforce. Manufacturing also slipped back into contraction after a brief recovery in October.

Governance bottlenecks and delayed public investments have further dampened the outlook, particularly in the construction sector, which carries a high multiplier effect for job creation.

GlobalSource warned that without addressing long-standing issues such as corruption and project implementation delays, the labor market will remain exposed to external shocks.

While the Department of Labor and Employment and the Department of Economy, Planning, and Development have pledged to increase social protection and skills training, the economists noted that lasting stability depends on restoring business confidence and accelerating gross domestic product growth.