Global consultancy firm Mercer said the average salary in the Philippines is expected to increase by 5.5 percent next year, much higher than the 5.2 percent increase recorded this year.
Citing the firm’s employee total remuneration survey this year across 2,258 roles in over 482 companies in the Philippines, Mercer said 97 percent of companies surveyed plan to adjust their remuneration strategies next year.
“Today, nearly 90 percent of the organizations surveyed have short-term incentive plans such as bonuses, while the percentage of companies offering long-term incentives such as stock options grew from 19 percent in 2023 to 22 percent in 2024,” it said.
The companies surveyed have average full-time employees of 1,000.
Floriza Molon, Mercer Philippines business leader, said the projected average salary increase for next year “underscores the competitive landscape for talent and highlights the ongoing commitment by organizations in Philippines to invest in their workforces.”
“It is crucial for HR (human resource) 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. By effectively adapting to changing expectations, organizations can attract and retain top talent in an increasingly competitive landscape,” Molon said.
Mercer said the top factors influencing salary increases in 2025 are individual performance, salary range, the organization’s competitiveness in the job market and the inflation.
Aside from merit increases, companies are also allocating 1 percent of their total payroll budget for promotions and 3 percent for market adjustments, it added.
Mercer noted an increase in the adoption of flexible benefits in the Philippines, with the percentage of companies offering these benefits rising to 19 percent this year from 10 percent in 2018.
Jobs in the energy-related industries remain the highest-paying positions in the country, offering 45 percent more in annual base salaries compared to other jobs.
“The energy industry recorded the lowest voluntary attrition rate for 2023 at only 8 percent, whereas the shared services and outsourcing (SSO) industry experienced the highest rate at 17 percent,” the firm said.
Mercer said the elevated attrition in the SSO industry may be attributed to a more assertive younger demographic in the workforce and the abundance of opportunities for career advancement.
“Aligned with the highest attrition rate, the SSO industry also has the shortest average tenure, with employees staying for only three years, whereas the average tenure in the consumer goods industry is significantly longer at nine years,” it added.
