CAGAYAN DE ORO — Official labor statistics show employment improving in February 2026, but a deeper review of the data reveals persistent weaknesses in the Philippine labor market, including higher joblessness compared with last year, high underemployment, and uneven sectoral job trends.
According to the latest Labor Force Survey released April 8 by the Philippine Statistics Authority (PSA), the unemployment rate declined to 5.1 percent in February 2026, down from 5.8 percent in January.
| Metric | February 2025 | February 2026 |
| Unemployment Rate | 3.8% | 5.1% |
| Underemployment rate | 10.1% | 11.8% |
In terms of magnitude, about 2.66 million Filipinos were unemployed, lower than the 2.96 million recorded in January.
However, the figure remained higher than the 1.94 million jobless recorded in February 2025, when unemployment stood at 3.8 percent.
Labor force expands
PSA data showed the labor force participation rate (LFPR) reached 63.8 percent, equivalent to 52.09 million Filipinos aged 15 and above who were either working or actively seeking work.
The number of employed persons rose to 49.43 million, up from 47.94 million in January 2026 and 49.16 million in February 2025.
Employment remained heavily concentrated in the services sector, which accounted for 63.5 percent of total jobs, followed by agriculture at 18.8 percent and industry at 17.7 percent.
Among subsectors, the largest sources of employment were Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles (20.0 percent), Agriculture and Forestry (16.0 percent), and Construction (9.2 percent).
Sectoral shifts
Despite their large workforce share, these sectors also recorded some of the biggest annual employment declines.
PSA figures showed Wholesale and Retail Trade losing 725,000 jobs year-on-year, followed by Agriculture and Forestry (-523,000) and Construction (-484,000).
Other subsectors with notable annual declines included Public Administration and Defense (-126,000) and Arts, Entertainment and Recreation (-86,000).
Month-on-month comparisons also revealed uneven job movements.
The largest employment increases from January to February were seen in Wholesale and Retail Trade (+658,000), Agriculture and Forestry (+380,000), Accommodation and Food Service Activities (+361,000), Fishing and Aquaculture (+233,000), and Financial and Insurance Activities (+169,000).
At the same time, several sectors registered declines, including Public Administration and Defense (-336,000), Professional, Scientific and Technical Activities (-97,000), Administrative and Support Service Activities (-69,000), Information and Communication (-65,000), and Arts, Entertainment and Recreation (-55,000).
Underemployment persists
The PSA also reported underemployment at 11.8 percent, representing 5.84 million workers who said they wanted additional work hours or another job.
The figure improved from 13.2 percent in January 2026, but remained higher than the 10.1 percent recorded in February 2025.
Average weekly hours worked slightly declined to 40.9 hours, compared with 42 hours in January, suggesting many workers may still be experiencing reduced work hours.
Workforce structure
By employment classification, wage and salary workers accounted for 63.8 percent of the workforce. This was followed by self-employed workers without paid employees (27.4 percent), unpaid family workers (6.8 percent), and employers (2 percent).
Among wage earners, 78.5 percent worked in private establishments, while 14 percent were employed in government or government-controlled corporations.
Concerns over contractual employment
The Federation of Free Workers (FFW) said the employment data should be examined alongside the continued reliance on contract-based labor in government.
In an interview with Gold Star Daily, FFW president Sonny Matula said contract-of-service (COS) workers remain widely used across the public sector.
He cited data showing that the largest concentrations of COS workers were in the National Capital Region with 57,613 workers, followed by Region IV–Calabarzon with 27,373, Region XI with 28,653, Region VI with 25,122, and Region III with 20,192.
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At the other end of the scale, the lowest numbers were recorded in Region X with 6,857 COS workers, Region XII with 6,198, and Region VII with 10,115, according to Matula.
The labor leader said these figures illustrate the uneven distribution of contractual employment across the country and the continuing dependence of government agencies on non-regular labor arrangements.
Labor market pressures
FFW also pointed to broader pressures affecting employment trends, including climate-related disruptions in agriculture, project delays affecting construction, and weakening household purchasing power that could influence retail employment.
The labor federation said policymakers should focus not only on employment growth but also on the quality and stability of jobs, calling for stronger labor protections, improved wages, and efforts to regularize long-serving government contract workers.
Economists note that while the February data shows short-term improvements in employment levels, the persistence of underemployment and the sectoral declines suggest that the labor market remains uneven as the economy adjusts to ongoing structural and economic pressures.
