DoLE strengthens programs as unemployment climbs

By Erika Mae P. Sinaking, Reporter

THE government will continue to strengthen its labor market programs, the Department of Labor and Employment (DoLE) said after the unemployment rate rose to 5.8% in January.

In a statement over the weekend, the department said the increase in the number of unemployed Filipinos to 2.96 million from 2.17 million a year ago reflects a “seasonal normalization” following the holiday peak.

The agency noted that the transition of workers out of temporary arrangements led to a 1.489 million decline in total employment from December 2025.

“The department notes that despite these short-term fluctuations, the Philippine labor market continues to benefit from sound macroeconomic fundamentals and sustained employment generation efforts across sectors,” the DoLE said.

“The department will continue to promote the adoption of flexible work arrangements and MSME’s availment of the Adjustment Measures Program, to help them retain workers and preserve jobs during periods of economic adjustment or structural shifts.”

Jose Enrique A. Africa, executive director of IBON Foundation, told BusinessWorld in a Viber chat that the 790,000 year-on-year increase in unemployment is the “biggest monthly year-on-year increase in 36 years” outside of the pandemic.

“Explaining the adverse January 2026 LFS (Labor Force Survey) figures away as due to seasonality will be burying our head in the sand,” Mr. Africa said. “This is absolutely not seasonal but structural: work in backward agriculture is extremely volatile, the industrial sector especially manufacturing isn’t creating enough jobs, and the low-productivity service sector is a catch-basin for those unable to find work anywhere else.”

Philippine Statistics Authority data show the agriculture and forestry sector suffered the heaviest blow, losing 1.42 million workers year on year and 1.76 million month on month. Underemployment in January also estimated at 13.2%, affecting 6.35 million Filipinos.

Chinabank research said that the “soft labor market conditions could intensify as geopolitical risks escalate.”

It pointed to the resumption of rice imports and the recent oil price shock as factors that “could raise production costs for firms, potentially prompting businesses to freeze or delay hiring plans.”

Labor groups Sentro and LEARN described the outlook as “bleak,” highlighting that youth employment continues to deteriorate, with the youth NEET (not in education, employment, or training) rate rising to 14%. The groups called for a robust public employment program and an urgent shift in government employment strategy.

Kilusang Mayo Uno Deputy Secretary General Joanne Cesario denounced the administration’s reliance on job fairs and foreign investment. “The programs the Marcos government flaunts… are nothing more than band-aid solutions,” Ms. Cesario said in a statement, adding that expected repatriation of overseas Filipino workers from the Middle East would face a “cold reality of unemployment” upon their return.