Home⇛International Journal of Multidisciplinary: Applied Business and Education Research⇛vol. 7 no. 8 (2026)

Macroeconomic Determinants of Unemployment in the Philippines: Evidence from 1996–2025

Michael Angelo V. Mortel | Shaine Russelle A. Aga | Clarissa Mae M. Roque | Emmanuel V. Labrador | Ma. Andrea Joyce S. Castro | Krezia May B. Navarro | Allen Grace M. Sarmiento

Discipline: Economics

 

Abstract:

Unemployment remains a major concern in the Philippines despite periods of sustained economic growth. This study examines the macroeconomic determinants of unemployment in the Philippines from 1996 to 2025 by analyzing the effects of GDP growth rate, in- flation rate, trade openness, foreign direct investment (FDI) net in- flows, population growth rate, and structural break variables repre- senting the Global Financial Crisis and the COVID-19 pandemic. Us- ing annual time-series data, the study employs multiple linear re- gression through the Ordinary Least Squares (OLS) method to de- termine the relationships among macroeconomic variables and un- employment. Results indicate that population growth rate, trade openness, and the COVID-19 pandemic have significant positive ef- fects on unemployment, while GDP growth rate, inflation rate, FDI net inflows, and the Global Financial Crisis show no significant ef- fects. The findings suggest that unemployment in the Philippines is influenced more by structural conditions than by traditional macro- economic relationships. Rapid population growth contributes to la- bor supply pressures, while trade openness creates varying employ- ment outcomes across domestic industries. Additionally, the COVID- 19 pandemic significantly disrupted labor market conditions. The study highlights the importance of strengthening the economy's ca- pacity to absorb a growing workforce through employment-ori- ented policies and structural improvements.



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