Philippine July unemployment at 6.0%, up year on year; underemployment falls

Facts

Unemployment: the unemployment rate was 6.0% (up from 5.3% in July 2025); unemployed persons numbered 3.14 million (up about 0.55 million from 2.59 million in July 2025). Basis: July 2026. Source: PSA Labor Force Survey released 8 September 2026. ¹

Participation: the labour force participation rate was 63.6% (up 2.9 pp from 60.7% in July 2025; 62.7% in April 2026), with a labour force of about 52.36 million. Employment was 49.21 million (up about 3.16 million from 46.05 million in July 2025). Same source.

Job quality: the underemployment rate was 12.9% (down from 14.8% in July 2025 and 15.2% in April 2026), or about 6.33 million people. Services accounted for 62.8% of employment. Same source.

Analysis

Year on year, employment rose up about 3.16 million from 46.05 million in July 2025 while unemployment also increased (up about 0.55 million from 2.59 million in July 2025). Participation rose (up 2.9 pp from 60.7% in July 2025; 62.7% in April 2026), so more people looking for work partly explains the higher unemployment rate. Regionally, the rate is double Malaysia's 3.0% (July, DOSM). In the same month, the banks' consumer-loan NPL ratio rose to 5.49% (BSP), so labour-market and credit-quality indicators are softening together.

Implications

Counterpoints and uncertainties

Higher participation means part of the rise is a 'benign' increase in unemployment, and lower underemployment signals better job quality. Linking the higher unemployment rate directly to weaker household repayment capacity may overstate the risk.