PHILIPPINES, July 30, 2025 — Average salary increase budgets for organizations in Asia Pacific (APAC) in 2026 are expected to be at 5.0%, a slight increase from 2025 at 4.9%. This is according to the latest Salary Budget Planning Report by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.
| Key markets | 2024 actual salary increase | 2025 actual salary increase | 2026 projected salary increase |
|---|---|---|---|
| APAC average | 5.1% | 4.9% | 5.0% |
| Australia | 3.8% | 3.5% | 3.5% |
| China | 5.0% | 4.5% | 5.0% |
| Hong Kong | 4.0% | 3.7% | 4.0% |
| India | 9.5% | 9.0% | 9.0% |
| Indonesia | 6.4% | 6.0% | 6.1% |
| Japan | 3.0% | 3.0% | 3.0% |
| Malaysia | 5.0% | 4.8% | 5.0% |
| Philippines | 5.5% | 5.3% | 5.5% |
| Singapore | 4.0% | 4.0% | 4.0% |
| South Korea | 4.5% | 4.3% | 4.3% |
| Taiwan | 4.0% | 3.9% | 4.0% |
| Thailand | 4.9% | 4.6% | 4.9% |
| Vietnam | 7.1% | 7.0% | 7.0% |
Source: WTW 2024 and 2025 Salary Budget Planning Survey Reports – Asia Pacific (July editions)
In the Philippines, employers are projecting salary increase budgets to remain flat at a median of 5.5% in 2026, consistent with trends seen since 2024. While 96.1% of organizations conducted regular salary reviews in 2024, this figure slightly declined to 92.6% in 2025, as more companies reported either freezing (up from 2.3% to 3.9%) or postponing (up from 0.9% to 3.5%) their reviews. This reflects a cautious approach by companies amidst current global economic uncertainties.
The stability in salary increase budgets is taking place against a backdrop of diverse organizational strategies. While nearly half of organizations have lowered their salary budgets compared to the previous pay cycle, mainly due to anticipated recession or weaker financial results (47.8%) and cost management concerns (43.5%), a smaller segment (14.3%) is projecting higher budgets. These increases are largely driven by inflationary pressures (26.1%), tight labor markets (19.6%), and anticipated stronger financial results (19.6%).
“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. Rather than simply reacting to economic trends, companies are proactively reshaping their approach to better align with broader business objectives, even in uncertain times,” said Chantal Querubin, Rewards Data Intelligence Practice Leader, Philippines at WTW.
Additionally, 76.9% of organizations in the Philippines plan to maintain their headcount within the next 12 months. This represents an increase of 12.7% compared to 2024.
Of the remaining organizations, twice (15.4%) as many intend to increase their headcount compared to those which intend to reduce it (7.7%). Further, the talent landscape appears to be easing in 2025, with 57% of organizations experiencing little to no difficulty in attracting and retaining employees, up from 50% in 2023.
Employers are also adjusting their compensation programs to supplement regular salary reviews amid rising operating costs and intensifying labor market pressures. Actions taken or planned include conducting compensation review of all employees (54%), compensation review of specific employee groups (49%), raising starting salaries (44%), using retention bonuses and spot awards (39%), and adjusting salary ranges more aggressively (38%).
“Instead of broad hiring or large budget increases, companies are taking a more measured approach, carefully managing costs while staying focused on long-term talent priorities such as upskilling, succession planning, internal mobility, and employee wellbeing.”
Chantal Querubin | Rewards Data Intelligence Practice Leader, Philippines, WTW
More organizations have likewise undertaken or are planning complementary actions to address talent needs and support their employees. These include improving employee experience (73%), increasing training opportunities (62%), enhancing health and wellness benefits (60%), and more workplace flexibility (58%).
“In today’s Philippine labor market, shaped by both local and global pressures, employers are shifting from rapid expansion to maintaining a stable and resilient workforce. Instead of broad hiring or large budget increases, companies are taking a more measured approach, carefully managing costs while staying focused on long-term talent priorities such as upskilling, succession planning, internal mobility, and employee wellbeing. These strategic areas are becoming essential to sustaining workforce capability and competitiveness over time,” added Chantal.
Shai Ganu, Managing Director and Global Leader, Executive Compensation and Board Advisory at WTW, said: “Employers in the region are concerned about losing critical talent, with change management, talent attraction and employee experience being significant issues. A recent survey conducted by WTW across APAC reveals companies are adapting to economic shifts through various strategies. Cost reduction emerges as a key approach, with nearly half considering operational cuts, including headcount reductions.”
The survey also indicated a pivotal shift towards intra-Asia resilience, with 37% of companies looking to explore new markets within Asia and 33% considering to diversify supply chains from the West to within Asia. Furthermore, half of the companies said they are not planning to make significant changes to their compensation plans. Of those who are considering changes, approximately a quarter are considering changes to incentive metrics (26%) or modifying performance goals to account for volatility (25%).
“These adjustments aim to align compensation with the new economic realities and maintain employee motivation and performance. Additionally, the ‘From Asia – For Asia’ strategy is likely to impact trade and talent flows, impacting compensation outcomes within the region,” added Shai.
Overall, the trends in the Philippines and broader APAC reflect a cautious yet adaptive approach to workforce management amidst economic shifts. Companies are balancing between maintaining stability and addressing emerging challenges in the labour market.
The Salary Budget Planning Report is compiled by WTW’s Rewards Data Intelligence practice. The survey was conducted from April to June of 2025. Approximately 32,000 responses were received from companies across 168 countries worldwide, including in Asia Pacific. In the Philippines, 344 organizations participated.
The 2025 Adapting to Global Economic Shifts: Asia Pacific Survey, conducted by WTW, provides a high-level analysis of the strategies and concerns of 145 organizations across the Asia Pacific region as they navigate the evolving economic landscape. The survey highlights key areas of focus including the potential impact of tariffs on profitability, corporate strategies to adapt to these impacts, workforce-related concerns and adjustments to compensation plans.
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.
