Unemployment slightly rose in May to 4.8%

From AB Capital's The Opening Bell: Three Moves

Event

The unemployment rate rose to 4.8% in May from 4.7% in April and 3.9% a year earlier, with jobless Filipinos at 2.5 million. Agriculture shed 905,000 jobs, led by paddy rice farming, while underemployment improved to 12.2% as hours worked increased.

View

In our view, the labor print is mixed rather than outright weak. Weather-linked agriculture losses lifted unemployment, but services, construction, mining, and health still added jobs. The concern is income quality, since weak farm employment, lower participation, and inflation pressure could restrain consumption resilience.

Catalyst

Key sensitivities are El Niño, rice farming displacement, minimum wage implementation, and whether displaced farm workers are absorbed by services or construction. If weather disruption persists, rural income may weaken further. If infrastructure spending accelerates, construction and support services could cushion job losses.

Action

We think the read-through is cautious for discretionary consumption and retail credit, especially outside urban salaried segments. Favor staples, utilities, telco, and banks with tighter consumer underwriting. Monitor agriculture employment, wage-cost pass-through, and whether public spending improves labor absorption in 2H26.

Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.