Salary hikes projected to average 5.1% next year

MANILA, Philippines — The country is expected to see slightly higher salary hikes in 2027 amid competition for talent and rising costs, according to global advisory, broking and solutions firm WTW.

The Salary Budget Planning Report released by WTW yesterday showed that companies in the Philippines are projecting moderate salary increases of 5.1 percent in 2027, slightly higher than the five percent increase this year.

The projected salary hike in the Philippines is also higher than the expected 4.9-percent average increase in Asia-Pacific for 2027.

While the Philippines is expected to see a higher salary hike than neighbors Malaysia (4.7 percent), Thailand (4.6 percent) and Singapore (four percent) next year, the projected increase is lower than Vietnam’s seven percent and Indonesia’s six percent.

The findings are based on a survey, which was conducted from March to May and covered 34,024 responses from companies across 156 countries, including 408 organizations from the Philippines.

WTW said that more than half of employers reported actual salary increase budgets that were in line with prior projections.

Meanwhile, 18.8 percent reported lower budgets and 8.9 percent had higher budgets than initially planned.

Amid economic uncertainty and high inflation, WTW said organizations are looking beyond salary increases and leveraging a wider mix of reward strategies to attract and retain talent, while managing costs effectively.

“In the Philippines, employers are taking a more deliberate approach to compensation planning as they manage rising business costs while staying competitive for critical talent. While salary increases have moderated slightly, the market remains resilient and organizations are increasingly using data-led reward strategies to target pay investments where they will have the greatest impact on retention, skills and performance,” Chantal Querubin, rewards data intelligence practice leader for the Philippines at WTW said.

WTW also found that workforce stability is emerging as a new growth strategy for businesses as they navigate an uncertain business environment.

It said that 71.9 percent of organizations that responded to workforce-related questions intend to maintain their current headcount levels over the next 12 months, while 17.5 percent expect to increase their staff numbers and 10.5 percent anticipate workforce reductions.

Instead of large-scale hiring, firms are focusing on retaining and developing existing talent by investing in initiatives to improve the employee experience (43.9 percent), expand training and development opportunities (39.5 percent) and enhance health and wellness benefits (37.5 percent).

Citing its 2025 Total Compensation Survey report on general industry, WTW also said that median annual base salaries by employee category and years of service show that pay does not always increase in line with tenure.

There are cases where employees with one to two years of service have similar or even higher median pay than those who have been working for six to eight years.

“While further analysis is needed, this pattern tends to reflect the impact of market-driven hiring practices, targeted pay adjustments and increased competition for critical talent,” Chantal said.

As employers continue to invest in critical skills and address market movement for hard-to-fill roles, WTW said ensuring salary structures appropriately recognize experience, capability and progression opportunities is becoming more urgent.