What It Means
- The underemployment rate reached 15.2% in April 2026, the highest since July 2023, even as the jobless rate fell to a four month low of 4.7%.
- The labor force shrank and youth outside work or school rose, so the lower jobless rate partly reflects people leaving the market rather than finding jobs.
- The sectors adding the most jobs, accommodation and food, manufacturing, and transport, are also where underemployment climbed, meaning the new work pays too little or runs too few hours.
- Wholesale and retail trade lost jobs for a tenth straight month and agriculture for a sixth, marking the strain as structural rather than a single oil shock.
- Consumer facing businesses and the lenders behind them now carry exposure to households that kept their jobs but lost spending and repayment power.
The Philippine underemployment rate hit 15.2% in April, the highest reading since July 2023, while the jobless rate fell to a four month low of 4.7%. The two numbers landed on the same day, and most coverage led with the friendlier one. That choice is the story. The underemployment rate is the figure that tells you what is actually happening to Filipino household income, and it is moving in the wrong direction.
The Philippine Statistics Authority counted 7.41 million underemployed Filipinos in April, up from 6.03 million in March. These are people who already have work but want more of it, longer hours or a second job, because what they have does not pay enough. National Statistician Claire Dennis Mapa tied the jump to the transport sector, where jeepney, taxi, bus, and ride hailing drivers cut hours against fuel costs that climbed after the Middle East conflict that began in late February. That explains part of one month. It does not explain the shape of the year.
The Jobless Rate Fell for the Wrong Reason
A lower unemployment rate normally signals a stronger labor market. This one does not. The labor force participation rate dropped to 62.7% in April from 63.3% in March and 63.7% a year earlier. Total employment fell to 48.89 million from 49.07 million the month before. The number of young Filipinos not in employment, education, or training rose to 2.64 million, or 12.2% of the youth population, up from 10.6% a year ago.
Put together, the jobless rate fell partly because people stopped being counted. When a discouraged worker stops looking, they leave the labor force and the unemployment rate improves on paper. The claim that joblessness hit a four month low is accurate and close to meaningless as a sign of recovery. The underemployment rate counts people who are still in the market and still short of work. That is why it climbed while the other number fell.
The New Jobs Are the Underemployed Jobs
The sharper signal sits in where the jobs came from. The industries that added the most positions year on year were accommodation and food service, manufacturing, and transport and storage. Those are also the sectors where underemployment rose. Chinabank Research said the new jobs may offer “insufficient or unstable income.”
This is the part the oil shock framing buries. An economy can post job growth and a rising underemployment rate at the same time when the jobs it creates are part time, seasonal, or too thin to live on. The work exists. The income does not. A waiter picking up shifts, a factory hand on reduced hours, a driver splitting the week between two platforms all count as employed. They also all count as underemployed. Job creation that produces this profile does not lift household spending power. It spreads the same shortfall across more people.
The Decline Is Older Than the Oil Shock
Two sectors are shedding work on a longer clock. Wholesale and retail trade lost roughly 450,000 jobs from a year earlier, its tenth straight month of decline. Agriculture and forestry lost about 392,000, a sixth straight month down. Retail absorbs low skill labor easily and sheds it just as easily, which makes a ten month contraction there a read on weak consumer demand, not a fuel price blip.
The oil shock is real and it is hurting drivers. But a labor market where the underemployment rate runs near three times the jobless rate, as it does now, is not describing a temporary disruption. It is describing a structure that produces insecure work as its default output and has been doing so since well before pump prices spiked. The fuel story is the trigger laid over a standing condition.
Consumer Sellers and Their Lenders Carry the Exposure
The number matters most to the businesses that sell to households and the lenders behind them. A worker who keeps a job but loses hours does not register as unemployed. They register as a customer who buys less and a borrower whose repayment capacity has quietly thinned. A binary employment check, the kind most consumer credit models still lean on, reads that borrower as employed and creditworthy. The underemployment rate is the variable that check ignores.
Consumer facing MSMEs in retail, food service, and personal services feel this first, through smaller tickets and slower foot traffic, well before any official figure confirms it. The lenders exposed to those operators and to working class household credit carry the same blind spot one layer up. BusinessWorld reported the same week that MSME lending is already slowing on Iran war risk, which tightens credit into the exact segment now losing income. The squeeze arrives from both ends at once.
The Government Is Answering the Wrong Number
Economy Secretary Arsenio Balisacan called the latest indicators a mix of challenge and worker resilience, and pointed to broader market access and new investment as the answer. That answers the jobless number. Investment and market access build jobs. They do not, on their own, fix the quality of the jobs already being created, and quality is what the underemployment rate is measuring. Until the new work pays enough to cut the count of people seeking more of it, the figure stays elevated. Chinabank expects exactly that while inflation stays high.
The recovery story rests on a number that improves when workers give up. The underemployment rate rests on the ones still trying. At 15.2% it marks 7.41 million Filipinos earning less than a full living from work that technically counts as a job, and the businesses that depend on those wages are reading the recovery off the wrong figure. The spending power left the market months ago. The data only just admitted it.
More developments that reshape the operating environment in National Signal section of Hemos PH.
