Key reasons to read this article:
- Job losses are rising just as the Philippines is starting to run out of young workers. Can the economy survive this double hit?
- Millions are unemployed, and yet millions of older people cannot afford to retire. What is going wrong?
- Unemployment has hit a two-year high, but the bigger crisis has not yet begun.
- Climate disasters and corruption scandals are costing Filipinos their livelihoods.
- Plans exist, but will the government move quickly enough before the workforce shrinks?
The Philippines is facing a situation where the recent increase in unemployment has coincided with a long-term demographic shift towards an aging population. This raises questions about the country’s future labor supply and social protection systems.
Unemployment reaches two-year high amid corruption and climate woes
According to the Philippine Statistics Authority (PSA), the country’s unemployment rate hit a two-year high in December 2025, rising to 4.4% from 3.1% in December 2024, with 2.26 million Filipinos jobless, up from 1.63 million.
This increase comes as the country moves towards becoming an “aging society” by 2030, with over 7% of its population being 65 or older.
Labor economists explain that the recent rise in unemployment reflects sectoral shifts, weather-related disruptions, and uneven recovery across various industries.
Assistant Professor Benjamin B. Velasco of the University of the Philippines Diliman School of Labor and Industrial Relations has said extreme weather and policy disruptions have affected employment-intensive sectors.
“Multiple typhoons and floods have hammered agriculture and fisheries, while a corruption scandal-triggered ban on flood control projects has devastated construction jobs,” he commented.
Some experts view corruption to be one of the main triggers of surging unemployment, leading to 550,000 job losses in the construction sector, while administrative and support services added another 385,000 to the number of unemployed.
Youth face barriers while many older people remain economically vulnerable
Young people continue to face barriers entering the labor market. Lolito Tacardon, Deputy Head of the Centre for Policy Dialogue (CPD), has called for employment policies that target youth in order to influence the country’s long-term trajectory.
“If the government optimizes youth potential, it can boost economic development. But failure to provide jobs means they’ll rely on government resources.”
Many older Filipinos struggle with poverty thus being forced to work well into old age. About 38% of those aged 75+ live below the poverty line, alongside 31.8% of those aged 70-74, 30.1% aged 65-69, and 27% aged 60-64.
This financial pressure compels many elderly Filipinos to remain in the workforce. Nearly 5 million Filipinos aged over 60 were still working in 2023, a 6.5% increase from the previous year and a 33.12% surge over the past five years, according to the PSA.
Some policymakers have also raised concerns about the balance between short-term assistance and long-term employment creation. Jean Loreche, Commissioner at the National Commission for Senior Citizens (NCSC), commented that poverty is being used to justify people seeking aid which creates dependency. “What if we change the paradigm?” she asked, referring to the need for policies that support both employment and financial independence.
Fertility decline shifts population peak
A significant demographic shift is underway, driven by declining fertility rates and rising life expectancy. The country’s fertility rate declined from 2.7 in 2017 to 1.9 in 2022, driven by rising living costs and more women entering the workforce. As a result, the working-age population is expected to peak in 2053, earlier than the previous estimate of 2077. Demographers generally link declining fertility to urbanization, rising education levels, and increased female workforce participation.
“Boosting female fertility might offer some respite, but it’s unlikely to reverse the trend,” they have warned.
The shift could reshape the country’s labor market, as fewer young workers enter the workforce, while the number of those retiring increases. The government’s economic strategy could also be impacted since the Philippine Development Plan 2023-2028 relies on young workers to boost the economy.
Recovery since the pandemic but challenges remain
Historically, data shows a strong recovery. The 2024 unemployment rate of 3.8% was the lowest since the Covid pandemic:
- 2023: 4.4%
- 2022: 5.1%
- 2021: 7.8%
- 2020: 10.3% (pandemic peak)
The 3.8% rate recorded in 2024 suggests a strong labor market recovery. However, compared to its regional peers, the Philippines continues to face structural labor market challenges. Most neighboring ASEAN economies, such as Malaysia, Vietnam, Singapore, and Thailand, have reported unemployment rates ranging from 1.1% to 3.3%, much lower than the 4.4% of the Philippines.
Experts have noted that while the Philippines is making strides in reducing its unemployment rate, it must ensure that the available job opportunities align with the skill sets of graduates.
Policy readiness: plans vs action
While the Philippines is aging more slowly than countries such as Japan and Thailand, early preparation is key to avoiding putting strain on healthcare and social systems. The country has time to prepare, but proactive measures are needed now.
Lisa Grace Bersales, Undersecretary of the Commission on Population and Development, has said that national consultations are underway to review senior citizen policies and pinpoint the necessary interventions.
“This is a crucial step in ensuring our senior citizens get the support they need,” Bersales explained.
Existing government frameworks, including the Philippine Development Plan 2023–2028, the NCSC’s action plans, and the Philippine Population and Development Plan of Action, are already midway through their set deadlines.
However, analysts state that effective implementation will be key to ensuring the country can both create adequate jobs and sustain a sufficient workforce as demographic aging accelerates.