High fuel costs driven by geopolitical conflict in the Middle East hammered the Philippine labor market in March, forcing hundreds of thousands of agricultural and manual workers out of job as operating expenses became untenable.

Philippine Statistics Authority (PSA) Undersecretary and National Statistician Claire Dennis S. Mapa told a press briefing on Wednesday, May 6, that the number of Filipinos with jobs contracted by 350,000 in March to 49.1 million from 49.4 million in the previous month.

The drop was led by the fishing and aquaculture sectors, which shed 420,000 jobs month-on-month.

Mapa noted that the decline was most pronounced in marine fishing among municipal fisherfolk, indicating that rising input costs, particularly for fuel, have forced many operators to keep their vessels docked rather than venture out to sea.

“These workers are also a major contributor to the annual decline, indicating a consistent contraction in the subsector. This appears to be largely driven by input costs, particularly fuel. Reduced production suggests that some fishers are opting not to go out to sea,” Mapa said.

The squeeze on employment extended beyond the coastlines. Other service activities, primarily domestic and personal wellness services, recorded the next-largest monthly decline at approximately 300,000 jobs

These largely refer to domestic services, including a wide range of personal and wellness-related services provided at home, Mapa said.

While domestic services are partly seasonal, “it also reflects cost-saving measures by households, with some choosing to let go of domestic helpers,” Mapa said.

Manufacturing also shed 217 thousand workers, but Mapa said there is “no clear data yet on whether these reductions are directly linked to firms cutting manpower to manage rising costs.” Human health and social work activities declined by 154 thousand. Finance and insurance activities also posted a reduction of 116 thousand employed persons.

Fishing and aquaculture also led the decline on a year-on-year trend, shedding 189 thousand jobs. Manufacturing followed with a drop of 149 thousand, while arts, entertainment, and recreation lost 147 thousand workers.

Public administration and defense, including compulsory social security, recorded a decline of 137 thousand, and other service activities saw employment fall by nearly 100,000.

March’s employment rate stood at 95 percent, higher than the previous month’s rate of 94.9 percent, but lower than the March 2025 employment rate of 96.1 percent.

Conversely, the unemployment rate declined to five percent from 5.1 percent in the previous month. This, however, remained higher than the 3.9 percent recorded in March last year.

Notably, this rate matched the ceiling of the government’s target range for 2026 to 2028 of four to five percent.

Department of Economic Planning and Development (DEPDev) Secretary Arsenio M. Balisacan noted in a May 6 statement that the ongoing Middle East conflict, which triggered a global oil crisis, hampered business operations and domestic job stability.

“Prolonged conflict in the Middle East raised the prices of fuel and other inputs, adversely affecting production and employment,” Balisacan said.

To address these economic shifts, the government has moved to fast-track fuel subsidies and service contracting for vulnerable sectors—transport, farming, and fishing—by utilizing digital payment systems.

“We commit to tightening the delivery of targeted assistance… We will leverage technologies such as e-wallets and other digital platforms, where applicable, to ensure efficient delivery channels,” the DEPDev said.

Banking regulatory relief has also been rolled out by the government, including “a temporary grace period of up to six months for loan payments and a one-year deferral for agricultural loans to alleviate conditions for farm operators and other small businesses.”

Complementing these measures are the lending programs of the state-run Land Bank of the Philippines and the Department of Trade and Industry (DTI), whose initiatives are aimed at providing a safety net for small-scale producers during the crisis.

For China Banking Corp. Research, the country’s labor market stayed stable in March, “even as the Middle East conflict drove up oil prices and heightened domestic fragilities.”

Chinabank noted that this buoyed confidence over economic activity moving forward, suggesting relative insulation from the impact of the conflict.

“However, weakening business sentiment—as reflected in the BSP’s latest survey—and the decisions of some firms to temper expansion plans remain risks, potentially leading to a slowdown in hiring and eventually job losses,” Chinabank said.