Unemployment rate rises in May amid 905,000 job losses in agri

By Erika Mae P. Sinaking, Reporter

THE PHILIPPINES’ unemployment rate rose to 4.8% in May as job losses in agriculture, driven by bad weather, outweighed employment gains in services and other industries, the Philippine Statistics Authority (PSA) said on Wednesday.

The May unemployment rate jumped from 3.9% a year earlier and 4.7% in April, while the number of jobless Filipinos rose to 2.5 million from 2.03 million in May 2025 and 2.41 million a month earlier.

This was the highest jobless rate in two months or since the 5% in March.

“There was a significant drop in the number of employed persons in agriculture and forestry. This is likely the impact of weather conditions in May,” National Statistician Claire Dennis S. Mapa told a news briefing.

PSA data showed the agriculture sector shed 905,000 jobs from a year ago, extending its decline for a seventh month in a row.

Mr. Mapa said employment in paddy rice farming declined by 734,000 workers in May from a year earlier. The weather bureau only confirmed the start of the El Niño weather event in June.

A year-on-year drop in jobs was also seen in other service activities (-442,000), public administration and defense (-213,000), and wholesale and retail trade (-141,000).

For the first five months of 2026, the average unemployment rate rose to 5.1% from 4% a year earlier.

On the other hand, job quality improved as the underemployment rate fell to 12.2% from 13.1% a year earlier and 15.2% in April.

This was the lowest underemployment rate — or the proportion of those with jobs seeking additional work hours or having an additional job — in three months or since 11.8% in February.

Mr. Mapa attributed the improvement in job quality to fewer workers seeking additional hours, noting that average weekly hours worked increased to 41.1 hours from 39.8 hours a year earlier and 40.2 hours in April.

“More people worked more than 40 hours per week this May,” he said, adding that about 34.36 million workers logged more than 40 hours during the week.

The average underemployment rate for the January-to-May period was recorded at 12.9%, unchanged from a year ago.

Data from the PSA showed the labor force participation rate (LFPR) — the proportion of the working-age population (15 years old and over) that is part of the total labor force — stood at 63.8% or equivalent to 52.13 million Filipinos aged 15 and over.

This was lower than the 65.8% seen in the same month in 2025, and a slight uptick from the 62.7% participation rate in April.

The youth LFPR dropped to 32.3% from 33.6% a year ago, but slightly higher than the 31.8% seen in April.

In May, the employment rate slipped to 95.2% from 96.1% a year earlier and 95.3% in April. Total employment reached 49.63 million, up by 738,000 from the previous month but down 663,000 from May last year.

The average employment rate from January to May stood at 94.9%, slipping from 96% a year ago.

Services remained the country’s biggest employer, accounting for 61.8% of total employment, followed by agriculture at 19.9% and industry at 18.3%.

Administrative and support service activities posted the biggest annual employment gain in May with 329,000 jobs, mostly in call centers and private security services.

Other sub-sectors with a significant annual increase in employment in May include administrative and support services (329,000), mining and quarrying (184,000), human health and social work activities (173,000), fishing and aquaculture (170,000), and construction (168,000).

CHALLENGES
Labor Secretary Francis N. Tolentino said in a statement that the latest labor data show the need to sustain reforms to create better jobs.

“We must create quality jobs that provide decent incomes, encourage productivity, and prepare Filipinos for the jobs of tomorrow. This is the direction that the department is pursuing as we strengthen our education-to-employment pipeline and build a future-ready workforce,” he said.

In a note, Chinabank Research said the labor market remained soft but performed “better-than-expected” amid uncertainties and price pressures arising from the Middle East war.

“Improving business sentiment as global tensions ease could support stronger economic activity and hiring in the coming months. However, downside risks also remain, particularly from the potential impact of El Niño on the agricultural sector and the effects of minimum wage hikes on labor-intensive industries, such as food services and wholesale and retail trade,” it said.

Chinabank Research noted that a sustained dry spell could hurt the agriculture sector and lead to more job losses.

Josua T. Mata, secretary-general of Sentro ng mga Nagkakaisa at Progresibong Manggagawa, expressed concern over the continued loss of agricultural jobs, especially since there is no clear evidence that displaced workers are absorbed by other sectors.

“Job losses in agriculture are being driven by a combination of mechanization, worsening climate impacts, and mounting economic pressures that make farming increasingly unsustainable for many Filipinos,” he said in a Viber chat.

“The challenge is not simply to move workers out of agriculture, but to ensure they transition into stable, productive, and decent jobs. Otherwise, we are merely shifting workers from one form of insecurity to another,” he added.

The implementation of the P85 minimum wage hike in Metro Manila is also expected to cloud the outlook for the labor market in the coming months.

John Paolo R. Rivera, a senior fellow at the Philippine Institute for Development Studies noted that while the wage hike should help improve workers’ purchasing power, its impact on the labor market data will vary.

“Labor-intensive sectors such as agriculture, retail, and other services may face greater cost pressures, particularly among micro, small and medium enterprises, which could slow hiring or encourage productivity improvements,” Mr. Rivera told BusinessWorld over Viber.

He argued that higher wages are most sustainable when accompanied by measures that raise productivity and lower the cost of doing business.

“A meaningful wage increase will immediately improve the conditions of workers and their families by increasing their purchasing power. The second-round impact on businesses catering to workers spending on more goods and services is also going to be meaningful,” Jose Enrique “Sonny” A. Africa, executive director of the think tank IBON Foundation, told BusinessWorld.

Mr. Africa said higher wages are a “critical element” in solving joblessness but needs to be accompanied by a strategy for agricultural modernization and industrialization.