AVERAGE SALARIES in the Philippines are projected to grow 5.5% in 2025, against the actual rise of 5.2% in 2024, according to a study by a global consultancy firm.
“The average salary increase of 5.5% in 2025 underscores the competitive landscape for talent and highlights the ongoing commitment by organizations in (the) Philippines to invest in their workforces,” Floriza I. Molon, Mercer Philippines Business Leader, said in a statement on Wednesday.
Philippine companies allocate 1% of their payroll budgets to promotions and 3% to account for market adjustments, according to Mercer’s 2024 Total Remuneration Survey, released on Dec. 2.
The consultancy said the factors that could influence salary adjustments next year include inflation and an organization’s competitiveness in the labor market.
Some 97% of companies plan to revise their remuneration strategies next year, the study found.
Nine out of 10 respondents are now implementing short-term incentive plans like bonuses, it said.
Some 22% of companies have started offering long-term incentives like stock options, against 19% in 2023.
“It is crucial for (human resources) leaders to adopt a holistic approach to total compensation. This includes salary adjustments, short- and long-term incentives, as well as addressing the evolving well-being needs of employees,” Ms. Molon added.
“By effectively adapting to changing expectations, organizations can attract and retain top talent in an increasingly competitive landscape.”
Mercer found that the Energy industry remains the highest-paying industry in the Philippines, offering annual base salaries 45% higher than others.
Employees in this industry were also the least likely to leave (8%) in 2023.
The Shared Services and Outsourcing (SSO) industry posted the highest attrition rate of 17% which Mercer attributed to the young workforce seeking career advancement opportunities.
SSO also has the shortest average employee tenure of three years, compared to nine years in the tenure leader, which was Consumer Goods industry.
The study examined salary trends and policies across 482 companies in the Philippines, representing over 2,258 roles and an average workforce size of 1,000 full-time employees per company. — Chloe Mari A. Hufana