‘Unemployment may ease in H2’

MANILA, Philippines — The government expects unemployment to ease in the second half as overall economic activity improves and infrastructure spending picks up, according to the Department of Economy, Planning and Development (DEPDev).

“We expect some recovery in the second half, especially in the fourth quarter. So that should improve,” DEPDev Secretary Arsenio Balisacan told reporters when asked for an outlook on unemployment.

Latest data from the Philippine Statistics Authority showed that the unemployment rate rose to six percent in July, the highest since January and February 2022, when it reached 6.4 percent.

The unemployment rate translated to 3.14 million jobless Filipinos in July, higher than the 2.59 million in the previous month and in the same month last year.

Balisacan said that the deterioration in the labor market situation reflects the slowdown in economic growth observed in the second quarter.

Economic growth in the second quarter slowed to 2.3 percent, the weakest performance in five years, amid high inflation that dampened consumption and slower public infrastructure spending following the flood control controversy.

Balisacan said he expects better labor market conditions in the second half as economic activity improves.

“In the third quarter, hopefully we can manage to go up a bit. But with the improvement in the economic activity in the second half, especially in the fourth quarter, I think the labor market will also adjust,” he said.

He said that problems related to the slowdown in public construction are expected to be resolved as government infrastructure spending picks up.

Flood control corruption issues have led to the government’s stricter project review and delays in public infrastructure spending and project execution.

“That is now gradually being unclogged,” Balisacan said.

For GlobalSource Partners country analysts Diwa Guinigundo and Wilhelmina Manalac, the latest unemployment result should be treated by the government as an early warning signal, with the economy growing at a pace that may no longer be enough to comfortably absorb a rising labor force, while inflation remains elevated.

“The policy priority should be to revive investment and productivity, strengthen sectors capable of creating quality employment and ensure that growth translates into better jobs and real income gains for Filipino households,” Guinigundo and Manalac said in a report.

Management Association of the Philippines president Donald Lim said that hiring activity is guided by businesses’ outlook on the economy.

“Business will always operate on a level of predictability and stability. If it is unpredictable and unstable, you will be conservative. Conservative means you will not hire first,” he said.

He said that the country’s economic performance may be a reason why businesses are not hiring more workers.

Even if the economy recovers, he said that businesses are unlikely to immediately increase staff numbers.

He said that the emergence of new technology such as artificial intelligence (AI) is helping some employees perform the work without the need to hire additional staff.

While AI use is also expected to help create new jobs, he said that companies are currently in the transition period and these new jobs are still being determined.

Balisacan said the information technology – business process management industry is currently using AI to tap opportunities to provide higher value services.

“That means that they’re working closely with other sectors, including the public sector, in upscaling their workforce. If we succeed in upscaling them, I don’t think that, and this is supported by the industry itself, that they (employees) will be replaced,” he said.

Lim said that the country’s labor laws are also among the reasons that may be affecting hiring activity.

“I think our labor laws are quite challenging versus other countries,” he said.

Local labor laws protect employees’ security of tenure. As such, companies cannot just make immediate workforce adjustments or let employees go without complying with certain processes.

Lim said the minimum wage hike adjustment in the National Capital Region may also be another factor affecting hiring decisions, particularly of small and medium enterprises.

“Business in general, maybe with technology and maybe whatever benefits the economy will give them, can give them a boost. But it does not now equate to hiring because hiring in the Philippines is hard. There are many conditions,” he said.

abtestabtest AirAsia lands new investor By Elijah Felice Rosales | 8 hours ago The Philippine unit of AirAsia has secured a new investor to boost its resources ahead of plans to expand both fleet and network,... Business Will robots take over? By Wilson Sy | 8 hours ago “The robots will not be taking over. Business Making a bet on the Phl By Marianne Go | 8 hours ago Three young Filipino-Americans, who are making a bold move to start up an AI-native defense technology and robotics hardware company that designs and builds motors and actuators for drones, robots and other autonomous... Business Are we done with CARP? By Boo Chanco | 8 hours ago Did the BBM administration quietly declare that our agrarian reform program is over? Business ‘Defunding busway to disrupt 183,000 commuters, PITX traffic’ By Elijah Felice Rosales | 8 hours ago Nearly 183,000 commuters in Metro Manila could lose their main mode of transport if legislators fail to allocate P1.76 billion... Business Latest More in Business DA seeks higher tariffs on pork Cyber vigilance efforts ramp up as GCash IPO expected to draw first-time investors Erring bank officials to face stiff penalty IT-BPM industry confident of hitting $42 billion revenue target abtest Bank assets rise to P30.7 trillion in July By Keisha Ta-Asan | 1 day ago Philippine banks’ total assets expanded by 10.7 percent to P30.72 trillion in July from a year earlier, supported by... Business Government urged to include hybrid cars in new TNVS slots By Louella Desiderio | 1 day ago Toyota Motor Philippines Corp. is urging the government to reconsider its rule on the new Transport Network Vehicle Service slots... Business Security Bank sees new role for branches By Keisha Ta-Asan | 1 day ago When Victor Lee took over as president and chief executive officer of Security Bank Corp. in January, one thing about Philippine... Business Landbank feted for clean energy financing 1 day ago State-run Land Bank of the Philippines has earned international recognition for advancing the Philippines’ energy security... Business PayMongo strengthens payment reliability By Keisha Ta-Asan | 1 day ago PayMongo continues to strengthen payment reliability to help businesses avoid lost sales and transaction disruptions, resolving... Business Recommended Negosyo, kontrata sa gobyerno, baril ni VP Sara bubusisiin 1 day ago Bubusisiin ng Senate impeachment court sa pagpapatuloy ng paglilitis laban kay Vice President Sara Duterte ang mga negosyo,... BusinessLAW Baste ipadedeklarang ‘hostile witness’ 1 day ago Hihilingin ng House prosecution panel sa Senate impeachment court na ideklarang hostile witness si Davao City Mayor Sebastian... BusinessTRENDING VP Sara, ‘50/50’ na ma-convict kapag naisantabi ang 16-vote threshold September 19, 2026 - 12:00am Isang malaking isyu ang “voting threshold” para sa impeachment trial ni Vice President Sara Duterte. BusinessSARA DUTERTE Posibleng ka-tandem ni Sara sa 2028 pinangalanan ni Robin September 19, 2026 - 12:00am Kasabay ang anunsiyo na hindi na siya tatakbo sa susunod na eleksiyon, pinangalanan ni Sen. Robin Padilla ang mga posibleng maka-tandem ni Vice President Sara Duterte sakaling tumakbo itong presidente ng bansa....r BusinessPADILLA PANOORIN: Gatchalian, nanawagang mag-commute din ang mga senador 2 days ago Hinimok ni Senate President Win Gatchalian ang kanyang mga kapwa senador na mag-commute din. BusinessDOTRSENATE OF THE PHILIPPINESTRANSPORTATION next Recommended Negosyo, kontrata sa gobyerno, baril ni VP Sara bubusisiin Bubusisiin ng Senate impeachment court sa pagpapatuloy ng paglilitis laban kay Vice President Sara Duterte ang mga negosyo, kontrata sa gobyerno, at mga re­histradong baril nito, batay sa mga testigo at ebidensyang ihaharap ng House prosecution panel. 1 day ago LAW Baste ipadedeklarang ‘hostile witness’ Hihilingin ng House prosecution panel sa Senate impeachment court na ideklarang hostile witness si Davao City Mayor Sebastian “Baste” Duterte, na una nang pinaisyuhan ng subpoena para tumestigo kaugnay ng mga kontrata ng kapatid niyang si Vice President Sara Duterte sa pamahalaang lungsod ng Davao. 1 day ago TRENDING VP Sara, ‘50/50’ na ma-convict kapag naisantabi ang 16-vote threshold Isang malaking isyu ang “voting threshold” para sa impeachment trial ni Vice President Sara Duterte. 2 days ago SARA DUTERTE Posibleng ka-tandem ni Sara sa 2028 pinangalanan ni Robin Kasabay ang anunsiyo na hindi na siya tatakbo sa susunod na eleksiyon, pinangalanan ni Sen. Robin Padilla ang mga posibleng maka-tandem ni Vice President Sara Duterte sakaling tumakbo itong presidente ng bansa. 2 days ago PADILLA PANOORIN: Gatchalian, nanawagang mag-commute din ang mga senador Hinimok ni Senate President Win Gatchalian ang kanyang mga kapwa senador na mag-commute din. 2 days ago DOTR SENATE OF THE PHILIPPINES TRANSPORTATION OK Are you sure you want to log out? Yes No X Login Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!