Salary hikes expected to hit 5.1% in 2027

Photo via DepEd PH

Private companies and organizations are expected to see slightly higher salary hikes next year, according to global advisory, broking, and solutions firm Willis Towers Watson (W.T.W.).

Even amid competitions for talent pay raise and rising costs, the Salary Budget Planning Report released by W.T.W., 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 2026.

The projected hike in the country is also higher than the expected 4.9 percent average increase in Asia-Pacific for next year.

Although the Philippines’ expected hike is higher than neighboring countries including Malaysia, Thailand and Singapore, with projected 4.7, 4.6 and four percent, respectively, the increase is still below Vietnam’s seven and Indonesia’s six percent.

Accordingly, the findings are based on a survey conducted from March to May, which covered 34,024 responses across 156 countries globally, in which 408 organizations from the Philippines are included.

Is the projected hike aligned with PH companies?

According to W.T.W, more than half of employers reported that their actual salary increase budgets matched their initial projections.

Meanwhile, 18.8 percentage said their salary increase budgets were lower than originally planned, while 8.9 percent reported higher budgets than expected.

Expanding of total rewards strategies

Despite economic uncertainty and persistent inflation, W.T.W. said organizations are expanding their total rewards strategies beyond salary increases to attract and retain talent while managing costs.

“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,” said Chantal Querubin, W.T.W.’s rewards data intelligence practice leader for the Philippines.

Workforce stability vs. uncertain economic environment

In addition to this, W.T.W. also found that workforce stability has become a key business strategy amid an uncertain economic environment.

According to the survey, 71.9 percent of organizations plan to maintain their current workforce over the next 12 months, while 17.5 percent expect to increase headcount and 10.5 percent anticipate reducing staff.

Rather than pursuing large-scale hiring, companies are prioritizing talent retention and development by investing in employee experience initiatives (43.9 percent), training and development programs (39.5 percent), and health and wellness benefits (37.5 percent).

Based on its 2025 Total Compensation Survey for the general industry, W.T.W. also found that annual base salaries do not always rise consistently with years of service. In some cases, employees with one to two years of tenure receive median salaries comparable to—or even higher than—those of employees with six to eight years of service.

“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,” Querubin said.

As employers continue investing in critical skills and responding to market demand for hard-to-fill positions, W.T.W. said organizations must ensure that salary structures adequately recognize employees’ experience, capabilities and career progression.