PHL employers to cut salary budgets in 2026 – WTW

PHILIPPINE EMPLOYERS expect to see a decline in their salary budgets in 2026, which could affect potential pay hikes for private sector workers, global advisory firm WTW said.

- By Adrian H. Halili Reporter

In its Salary Budget Planning Survey Report, WTW said that private companies are projected to allocate an average median increase of 5.5% for salaries in 2026. This is slightly higher than the 5.3% actual average salary increase this year, and unchanged from 5.5% in 2024.

The Philippines ranked fourth out of 13 countries in the Asia-Pacific region with the highest projected median salary increase for 2026. It was behind India (9%), Vietnam (7%), and Indonesia (6.1%).

WTW said that nearly 47.8% of the 344 local employers surveyed had lowered their salary budgets for 2026 due to an anticipated recession or weaker financial results, while 43.5% cited cost management concerns.

"Although overall budgets remain stable, the real transformation is happening behind the scenes. Employers are becoming more strategic in how they distribute compensation, prioritize investments, and define the results they aim to achieve," WTW Philippines Rewards Data Intelligence Practice Leader Chantal Querubin said in a statement.

"Rather than simply reacting to economic trends, companies are proactively reshaping their approach to better align with broader business objectives, even in uncertain times," she added.

On the other hand, the WTW report found that only 14.3% of Philippine employers are expecting to increase their salary budget for 2026.

Philippine employers noted that the increase in the budget for compensation would mainly be driven by inflationary pressures (26.1%), tight labor markets (19.6%), and anticipated stronger financial results (19.6%).