THE Department of Labor and Employment (DOLE) has attributed the sudden rise in unemployment rate to the transition of workers out of temporary employment arrangements as holiday-related jobs ended. According to the latest Labor Force Survey (LFS) of the Philippine Statistics Authority (PSA), unemployment rate rose to 5.4 percent in January 2026, equivalent to 2.96 million Filipinos without jobs, up from 4.4 percent or 2.26 million in December 2025. Underemployment surged to 13.2 percent or 6.35 million workers in January, a steep rise from 8 percent or 3.93 million in December. “The data reflect the seasonal normalization of labor market conditions following the heightened economic activity during the holiday period,” the Labor Department said on Tuesday. It said the 1.489 million decline in employment from December to January 2026 was driven mainly by reductions in wholesale and retail trade (888,000) and among service and sales workers (772,000) — sectors typically associated with short-term hiring during the peak holiday season. DOLE said the rise in unemployment rate also reflected seasonal factors, including the agricultural off-season and softer demand in sectors such as construction. The department said the rise in underemployment was a reflection of the reduced working hours following the peak retail and tourism season, with some workers returning to part-time or intermittent work while seeking additional or more stable employment. Despite the seasonal shifts, it pointed out that the number of wage and salary workers increased significantly by 2.408 million — from 30.555 million in January 2025 to 32.963 million in January 2026 — indicating continued progress toward more stable and formal employment. “Overall, the Philippine labor market remains supported by sound macroeconomic fundamentals and sustained employment generation across sectors. Employment and poverty outcomes continue to outperform targets under the Philippine Development Plan 2023–2028,” it said. Labor Secretary Bienvenido Laguesma said DOLE will intensify labor market programs under the Philippine Labor and Employment Plan and the Trabaho Para sa Bayan Plan. The programs, Laguesma added, include expanded reskilling and upskilling initiatives, youth employability programs, targeted job fairs in construction and other key sectors, and strengthened livelihood and entrepreneurship support.