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 embassy officers and staff, the dependent spouses of diplomats, accredited personnel of international organizations, visiting professors under formal agreements, resident visa holders, recognized refugees and stateless persons, and foreign nationals exempted by law. Others are excluded, such as board members with voting rights only and a president or treasurer who is a part-owner of the employer. However, under DO 248, exempt workers must still secure a Certificate of Exemption from DOLE, and excluded workers a Certificate of Exclusion, before taking up employment.

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 — as originally issued in DO 248 required publication in three places:

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

DO 248-A, Series of 2025 (Sec. 1) relaxed this: only the newspaper publication is now required. Posting on PhilJobNet and with the PESO or Job Placement Office is encouraged but is not a precondition to filing the AEP application.

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 is essential to the sector and serves the national economic interest — particularly among employers granted fiscal incentives, engaged in priority investments, or 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 — those granted fiscal incentives (for example, through BOI or PEZA registration), engaged in priority or strategic investments, or 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 regular rank-and-file Filipino employees per foreign national to undergo structured training. Employers must submit a progress evaluation report to DOLE within five working days after each periodic evaluation, and a completion report at the end of the program.

DOLE later issued DO 248-A, Series of 2025 (issued 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. Filing Deadline

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, and no earlier than 15 calendar days after publication of the vacancy. The previous rules (DO 221, Series of 2021, Section 3) required filing within ten working days from the signing of the contract or before employment began.

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.