By Pierce Oel A. Montalvo, Researcher
THE unemployment rate fell to 5.1% in two months in February, reflecting the first quarter trend of workers re-entering the labor market, the Philippine Statistics Authority (PSA) said on Thursday.
Citing the first data of the Labor Force Survey, PSA said that the unemployment rate decreased from 5.8% recorded last month but exceeded 3.8% at the same time last year.
Unemployment in February was very low as reported 4.4% in December. This was equivalent to 2.66 million unemployed in February.
The National Statistician, Claire Dennis S. Mapa, said that the increase in the number of workers caused unemployment to decrease every month, as there were more applicants when they found work.
“In the first two months, our average is 51.49 million compared to 50.87 million. So, we are about 600,000. There is an increase if you talk about the first two months of 2026, compared to the first two months of 2025,” said Mr Mapa at the forum.
A total of 52.09 million workers aged 15 and over were working during the month, compared to 51.09 million last year and 50.89 million the previous month.
This explains the labor force participation rate of 63.8%, lower than the 64.5% posted in February 2025 but higher than the 62.3% in January.
“February historically sees a re-entry into the labor market as Q1 economic activity resumes – initial construction projects, inter-island trade, and government spending,” said Leonardo A. Lanzona, professor of economics at Ateneo de Manila, in an interview.
He added that the level of unemployment in the subject should be carefully studied in relation to the level of employment.
The underemployment rate – the share of workers working but wanting more hours – was 11.8%, up from 10.1% in the same month last year, but down from 13.2% the previous month.
“Notably, January’s unemployment rate stood at 13.2% … suggesting that part of February’s improvement may reflect people moving from ‘unemployed’ to ‘unemployed’ rather than finding full, quality work,” Mr. That’s it.
About 5.84 million people were considered underemployed in February 2026, up from 4.96 million a year earlier, but down from 6.35 million in January 2026.
The employment rate was 94.9%, lower than the 96.2% posted in February 2025, but higher than the 94.2% in January.
Job holders numbered 49.43 million during the month, which is higher than last year’s 49.16 million and 47.94 million in January.
Year-to-date, wholesale and retail trade lost 725,000 jobs, the most among the sub-month sectors, ahead of agriculture and forestry (-523,000) and construction (-484,000).
Benjamin B. Velasco, an assistant professor at the University of the Philippines Diliman School of Labor and Industrial Relations, said the decline in agriculture and construction is a result of the windfall caused by climate change and the scandal of flood control corruption.
He also added that the increase in unemployment in the wholesale and retail sectors is “worrying,” considering how easy it is to hold workers.
“If Filipinos can’t find a way to make a living in a subsector with low barriers to entry, then it’s a sign of a bad economy,” said Mr. Velasco for interview.
The administration and support sector currently led all sectors in job growth, adding 572,000 jobs, followed by transportation and storage (486,000) and accommodation and food services (357,000).
Month-on-month, civil and defense management lost 336,000 jobs in February, followed by professional, scientific and technical jobs (-97,000) and administrative and support jobs (-69,000).
On the other hand, wholesale and retail trade gained 658,000 jobs, agriculture and forestry (380,000) and accommodation and food jobs (361,000) are close behind.
63.8% of employed workers are salaried and salaried workers, followed by self-employed people without salaried workers (27.4%). Of the salaried and salaried workers, 50.1% are employed by the private sector, while the government employs 8.9%.
“The labor market has begun to show the first signs of weakness in early 2026, reflecting the lingering effects of last year’s economic downturn,” Chinabank Research said in a research note.
It added that the impact of the recent oil price shock has not yet caught up, and conditions are expected to worsen from March onwards as transport and logistics workers are still vulnerable to the effects of the Persian Gulf conflict.
Any oil price drop after the two-week ceasefire announced by the US could dampen job losses.
“If this price drop continues, along with a strengthening peso, domestic pump prices could also ease, providing relief to businesses and consumers alike.”
Mr Velasco said the impact of the US-Israel war on Iran would be a key factor in employment challenges over the next few months.
“For example, jeepney drivers and operators may stop working which will have many consequences for street vendors and the small shops that cater to them.”
However, he said that a problem can be turned into an opportunity.
Meanwhile, Josua T. Mata, secretary-general of Sentro ng mga Nagkakaisa in Progresibong Manggagawa, said via Viber that the conflict may have direct effects on the economy of jobs, “even if the ceasefire remains.”
“Today’s challenges make such action not only necessary, but urgent – a key pillar of any economic response. But the government continues to block.”
Economy Secretary Arsenio M. Balisacan said the conflict will continue to affect the global economy and disrupt labor markets.
He said “recent developments highlight the urgency of strengthening the resilience of our labor market.”
“We must ensure that our policies and programs effectively respond to the rapidly changing world conditions, especially for affected and displaced Filipino workers here and abroad,” said Mr. Balisacan.
Mr. Lanzona said that in the coming months, unemployment could rise to 7-9%, “above the post-pandemic recovery floor of about 5%.”
“On average, even at the peak of the COVID-19 shutdown in February 2021, unemployment stands at 8.8%, or 4.2 million people. Current external shocks would have to increase significantly above the current situation to even reach that level.”
