Philippine Labor Market Shows Strong Growth in 2025

The Philippine labor market continued its positive momentum in early 2025, with rising employment and improved job quality, according to the latest Labor Force Survey (LFS) released by the Philippine Statistics Authority (PSA).

The country’s unemployment rate dropped to 4.3% in January 2025, down from 4.5% in January 2024. Underemployment, which measures workers seeking additional work hours or better jobs, also fell to 13.3% from 13.7%, reflecting an improvement in job quality.

At the same time, labor force participation increased to 63.9% from 61.1%, with an additional 2.6 million Filipinos entering the workforce. Of this number, 1.4 million are in their prime working years. Youth labor force participation also grew to 31.8% from 29.7%, indicating stronger engagement among young Filipinos.

National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan credited the positive labor market performance to government efforts in creating a business-friendly environment and equipping the workforce with industry-relevant skills.

“While we welcome this development, we also acknowledge that these additional jobs are classified as vulnerable. Therefore, our strategy remains clear: to sustain job creation by fostering a dynamic and investment-friendly economy while preparing our workforce for high-growth and emerging industries that offer high-quality, well-paying jobs,” Balisacan said.

To support long-term employment growth, the government is focusing on workforce development initiatives such as the Enterprise-Based Education and Training Program under the Technical Education and Skills Development Authority (TESDA). This program ensures that education and training align with labor market needs.

Additionally, the CREATE MORE Act—the recently signed Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy—aims to enhance business investments. The law simplifies fiscal incentives, clarifies investment policies, and improves ease of doing business, making the Philippines a more attractive destination for local and foreign investors.

“By cutting red tape and clarifying ambiguities in investment policies, CREATE MORE aims to encourage local and foreign enterprises to expand their operations in the Philippines. This thrust, in turn, is expected to create additional employment opportunities and support the broader goal of developing a highly skilled, future-ready workforce,” Balisacan added.

Technology and Agriculture: Key Sectors for Growth

Balisacan emphasized the need for resilience in the agriculture sector to reduce vulnerable employment. The government plans to strengthen and modernize early warning systems using artificial intelligence (AI) for improved disaster preparedness and agricultural planning.

“To further support growth and investment in the IT-Business Process Management (IT-BPM) sector, the government, working closely with industry players, will promote reskilling and upskilling of the workforce to meet the industry’s advanced skill requirements amidst AI integration,” Balisacan said.

As part of its long-term employment strategy, NEDA is seeking public input on the Trabaho Para sa Bayan (TPB) Plan 2025-2034, a comprehensive roadmap designed to create a more inclusive, efficient, and dynamic labor market.

The public and relevant stakeholders are encouraged to participate in the consultation process by accessing the online survey at https://tinyurl.com/TPBPlan-OnlineSurvey. Feedback will be accepted until March 7, 2025.

With continuous reforms and workforce development programs, the government aims to sustain the Philippines’ economic momentum while ensuring that job growth leads to higher-quality, better-paying employment opportunities for Filipinos.