mployed, unemployed, or underemployed?
The Philippine Statistics Authority (PSA) recently reported that the country’s unemployment rate fell to 5.3 percent in August from 6 percent in July. Around 2.77 million Filipinos were classified as unemployed, down from 3.14 million the previous month.
That’s an improvement, but understanding what the figures actually mean requires knowing how the PSA defines employed, unemployed, and underemployed.
Here are four common misconceptions.
Labor force, not population
The 5.3-percent unemployment rate does not mean 5.3 percent of all Filipinos aged 15 and older are unemployed.
The rate is based only on the labor force, which consisted of about 52.56 million people in August: 49.79 million employed and 2.77 million unemployed.
Meanwhile, the labor force participation rate stood at 64 percent, meaning a sizeable portion of Filipinos aged 15 and older was outside the labor force.
Using the PSA’s rounded figures, roughly 29.6 million people were outside the labor force. Combined with the officially unemployed, around 32.3 million people aged 15 and older were not employed.
But 32.3 million not employed does not mean 32.3 million unemployed. Many people outside the labor force are students, retirees, homemakers, or otherwise unavailable for work.
No job ? unemployed
Under PSA definitions, a person generally must be without work, available for work, and seeking employment to be considered unemployed.
There are exceptions. Someone waiting for an earlier job application, waiting to be rehired, or discouraged because they believe no jobs are available may still be classified as unemployed.
A discouraged worker can qualify if they remain available for work and search for a job sometime within the six months before the interview.
So someone can have no job without being officially unemployed-and someone who is not currently job-hunting can still be classified as unemployed.
Lower unemployment ? more jobs
Suppose 10 people are in the labor force: eight employed and two unemployed. Unemployment is 20 percent.
If one unemployed person leaves the labor force, only nine remain. Unemployment falls to 11.1 percent even though no one actually got a new job.
This has happened in the Philippines. In 2021, Inquirer reported that unemployment fell partly because fewer Filipinos were looking for work, shrinking the labor force itself.
That is why unemployment should be read alongside labor force participation and actual employment levels.
For August 2026, however, employment really did increase-from 49.21 million in July to 49.79 million.
Employed ? adequately paid
Someone can be employed and still feel underpaid or unhappy with their job.
PSA defines an underemployed person as someone who already works but wants additional hours, another job, or a new job with longer working hours. Pay satisfaction and job satisfaction are not part of that definition.
Those working fewer than 40 hours who want more work are visibly underemployed, while those working 40 hours or more who still want additional work are invisibly underemployed.
So someone working 40 hours a week who believes their salary is too low but does not want more work may still be classified as employed but not underemployed.
The takeaway is simple: employment, unemployment, and underemployment are useful statistics, but each measures something specific. None, by itself, tells us whether workers earn enough, have secure jobs, or are satisfied with the work they have.
The August numbers show a real improvement. Understanding what the categories actually mean simply gives us a clearer picture of what that improvement does-and does not-tell us.