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The Philippine unemployment rate climbed to 5.4 percent in September 2026, leaving approximately 2.86 million Filipinos without work, according to preliminary figures from the Philippine Statistics Authority (PSA). The latest results highlight continuing challenges in the country’s labor market despite an increase in overall employment.

The September figure was higher than the 5.3 percent unemployment rate recorded in August and the 3.8 percent reported in September 2025.

Despite the increase in unemployment, the number of employed Filipinos also grew during the month. The PSA estimated total employment at 50.32 million in September, up from 49.79 million in August and 49.60 million a year earlier.

The figures point to a labor market experiencing both employment growth and continued difficulty absorbing the growing number of people seeking work.

More Filipinos Entered the Labor Force

The PSA reported that the country’s labor force participation rate reached 64.5 percent in September, slightly higher than the 64.0 percent recorded in August.

This represented approximately 53.19 million Filipinos aged 15 and above who were either employed or actively looking for work.

In comparison, the labor force consisted of 52.56 million people in August and 51.56 million in September 2025.

The expansion of the labor force is an important part of understanding the latest unemployment figures.

More people joining the labor market can increase the number of employed Filipinos while also increasing the number of people counted as unemployed, particularly when available jobs do not keep pace with the growth in job seekers.

The PSA data show that the number of employed Filipinos increased by approximately 530,000 between August and September. However, the number of unemployed people also rose by around 90,000 during the same period.

Construction Records the Largest Annual Employment Decline

One of the notable developments in the September survey was the decline in employment within the construction industry.

Construction recorded an annual decrease of approximately 271,000 employed workers, making it the sub-sector with the largest employment decline compared with September 2025.

Other industries that experienced annual employment declines included:

• Arts, entertainment and recreation: 163,000 fewer workers
• Information and communication: 105,000 fewer workers
• Wholesale and retail trade: 101,000 fewer workers
• Professional, scientific and technical activities: 85,000 fewer workers

Meanwhile, accommodation and food service activities recorded the largest annual employment increase, adding approximately 834,000 workers.

Transportation and storage added another 254,000 workers, followed by other service activities with 174,000 additional workers.

Agriculture and forestry added approximately 139,000 workers, while public administration and defense gained around 117,000.

These differences show that employment conditions were not uniform across industries. Some sectors expanded their workforce, while others experienced significant declines.

Underemployment Improves Despite Higher Unemployment

While unemployment increased, the September figures showed an improvement in underemployment.

The PSA reported an underemployment rate of 11.0 percent, down from 11.9 percent in August and slightly below the 11.1 percent recorded in September 2025.

The number of underemployed Filipinos was estimated at 5.56 million, compared with 5.90 million in August.

Underemployment refers to people who already have jobs but want additional working hours, another job, or a new position that offers longer working hours.

The decline suggests that fewer employed Filipinos were seeking additional work compared with the previous month.

However, the remaining 5.56 million underemployed workers highlight the continuing challenge of providing sufficient working hours and employment opportunities.

Of the underemployed population, 61.4 percent worked fewer than 40 hours per week, while 38.6 percent worked at least 40 hours but still wanted additional work.

Youth Employment Remains a Concern

The latest figures also highlight continuing challenges for younger Filipinos entering the workforce.

The labor force participation rate among people aged 15 to 24 increased to 34.1 percent in September, compared with 32.7 percent in August and 31.6 percent a year earlier.

However, the youth employment rate stood at 84.7 percent, below the 88.4 percent recorded in September 2025.

The PSA estimated that approximately 6.23 million young Filipinos were employed during the month.

Of this number, around 715,000 were underemployed, equivalent to a youth underemployment rate of 11.5 percent.

The figures indicate that employment opportunities and access to sufficient working hours remain important concerns for young people entering the Philippine labor market.

What the September Employment Figures Mean

The latest labor market data present a mixed picture for the Philippine economy.

On one hand, employment increased to 50.32 million, while underemployment declined to 11.0 percent. These developments suggest improvements in certain areas of the labor market.

On the other hand, unemployment remained higher than the previous month and was considerably above the level recorded a year earlier.

The decline in construction employment also deserves attention, particularly because the industry supports a wide range of related activities, including building materials, transportation, equipment rental and other services.

However, the PSA figures alone do not establish why construction employment declined or whether the changes will continue in the coming months.

For policymakers and businesses, the challenge is not simply increasing the number of available jobs. It also involves ensuring that employment opportunities keep pace with the growing labor force and provide workers with sufficient hours and sustainable sources of income.

The next Labor Force Survey releases will help determine whether September’s increase in unemployment represents a temporary movement or part of a longer-term employment challenge.

Source: Philippine Statistics Authority, September 2026 Labor Force Survey (Preliminary Results), released November 6, 2026.