New AEP Rules in 2025: What Foreign Workers in the Philippines Must Know
If you are a foreign national planning to work in the Philippines — or an employer looking to hire one — the rules changed significantly in 2025. The Department of Labor and Employment (DOLE) issued Department Order No. 248, Series of 2025, overhauling the Alien Employment Permit (AEP) process with tougher requirements and new compliance obligations.
Here is a plain-language breakdown of the key changes and what they mean for you.
What Is an AEP and Who Needs One?
Under Article 40 of the Philippine Labor Code, any foreign national seeking employment in the Philippines must obtain an Alien Employment Permit from DOLE. This applies whether you are hired locally or deployed by a foreign company to its Philippine office.
Certain categories of foreign workers are exempt from the AEP — including diplomats, officers of multinational companies under presidential proclamations, and foreign nationals whose employment is covered by special laws. However, under DO 248, even exempt workers must now secure a Certificate of Exemption from DOLE.
Key Changes Under DO 248
1. Expanded Labor Market Test (LMT)
The Labor Market Test — which determines whether a qualified Filipino worker is available for the position — now requires broader publication:
- A job vacancy ad in a newspaper of general circulation (same as before)
- A posting on PhilJobNet, DOLE's official job-matching platform
- A posting at the local Public Employment Service Office (PESO) or Job Placement Office with jurisdiction over the jobsite
The ad itself must now include detailed information: the employer's business name and address, specific job description, the foreign national's name and city of residence, the intended employment period, and the DOLE Regional Office where the AEP application will be filed.
The AEP application can only be filed 15 calendar days after publication, and the ad is only valid for 45 days — miss the window and you must republish.
2. New Economic Needs Test (ENT)
This is entirely new. DOLE Regional Offices must now conduct an Economic Needs Test to assess whether hiring a foreign worker is economically justified. Factors include:
- Whether there is an actual shortage of Filipino workers in that sector or occupation
- Whether the required skills are unavailable locally and cannot be developed through short-term training
- Whether the foreign hire serves the national economic interest — particularly in industries registered with PEZA, BOI, or those operating public utilities
Critically, DOLE can deny the AEP application if it determines the ENT is not satisfied. This gives regional offices significant discretion to reject applications.
3. Mandatory Understudy Training Program (UTP)
Employers in certain categories — including those registered with BOI, PEZA, or those operating public utilities — must now submit an Understudy Training Program (UTP) or Skills Development Program (SDP) with the AEP application.
The UTP requires the foreign worker to train at least two Filipino regular employees who are next-in-rank. The SDP similarly requires at least two rank-and-file employees to undergo structured training. Employers must submit progress evaluation reports to DOLE upon completion of each training period.
DOLE later issued DO 248-A, Series of 2025 (effective June 2025) to clarify these requirements, including allowing AEP renewal applications with an affidavit of undertaking to fulfill training plan requirements within 60 days.
4. Tighter Filing Deadlines
Under the new rules, the AEP application must be filed within 15 calendar days from the execution of the employment contract or the issuance of the foreign national's appointment — a deadline that did not exist before.
Who Is Exempt from the UTP/SDP?
Not everyone must submit a training program. DO 248-A clarifies that the following are exempt from UTP/SDP:
- Foreign nationals excluded or exempted from the AEP requirement entirely
- Equity holders, shareholders, or investors with ownership stakes reflected in SEC filings
- Foreign nationals in positions determined by a DOLE Technical Working Group to qualify for exemption
What This Means for Foreign Professionals and Employers
The message from DOLE is clear: the Philippines wants to prioritize Filipino workers and ensure that foreign hires bring genuine value that cannot be sourced locally. For foreign professionals, this means:
- Plan earlier. The expanded publication and 15-day waiting period add weeks to the timeline.
- Document your unique skills. The ENT requires evidence that your expertise is unavailable in the local labor market.
- Budget for compliance. Employers must plan UTP/SDP programs, track progress, and file reports — this requires administrative resources.
- Watch the 45-day window. Job ads expire, and missing the filing deadline means starting over.
Need Help Navigating the New AEP Process?
The updated AEP rules affect every foreign worker and employer in the Philippines. Whether you need help preparing an AEP application, structuring a compliant Understudy Training Program, or understanding whether your position qualifies for an exemption, TTFC Law can guide you through the process.
Contact us for a consultation.
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