PHILIPPINES, July 20, 2026 — Salary increase budgets across Asia Pacific are stabilizing, but Southeast Asia’s frontier markets continue to record comparatively higher increases as employers balance inflationary pressures, cost management and retention needs. This is according to the latest Salary Budget Planning report by WTW (NASDAQ:WTW), a leading global advisory, broking and solutions company.
Organizations in the Philippines are projecting a moderate salary increases of 5.1% in 2027, just slightly higher than 2026’s actual increase of 5%, reflecting a balance between the need to remain competitive for talent and ongoing cost management considerations.
Southeast Asia salary budget increase overview
| Key markets | 2025 actual salary increase | 2026 actual salary increase | 2027 projected salary increase |
|---|---|---|---|
| APAC average | 4.9% | 4.7% | 4.9% |
| Vietnam | 7.0% | 6.8% | 7.0% |
| Indonesia | 6.0% | 5.8% | 6.0% |
| Philippines | 5.3% | 5.0% | 5.1% |
| Malaysia | 4.8% | 4.5% | 4.7% |
| Thailand | 4.6% | 4.5% | 4.6% |
| Singapore | 4.0% | 3.9% | 4.0% |
Source: WTW 2025 and 2026 Salary Budget Planning Survey Reports – Asia Pacific (July edition)
“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.”Chantal QuerubinRewards Data Intelligence Practice Leader, Philippines
More than half of employers reported that actual salary increase budgets were in line with prior projections, while 18.8% reported lower budgets and 8.9% reported higher budgets than initially planned, reflecting a compensation outlook that remains largely stable despite ongoing economic uncertainty.
Compensation planning continues to be shaped by factors such as inflation, business performance and labor market dynamics. As a result, organizations are looking beyond broad-based salary increases and are leveraging a wider mix of reward strategies to attract and retain talent while managing costs effectively.
“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, Rewards Data Intelligence Practice Leader, Philippines at WTW.
Workforce stability emerges as the new growth strategy
This same discipline extends to headcount decisions. Beyond salary budgets, organizations are placing greater emphasis on workforce stability as they navigate an uncertain business environment. Among the organizations that responded to workforce-related questions in the survey, 71.9% indicated they intend to maintain their current headcount levels over the next 12 months, while 17.5% expect to increase headcount and 10.5% anticipate workforce reductions.
The findings reveal that workforce stability and talent retention remain a key organizational priority amid ongoing economic uncertainty. Rather than prioritizing large-scale hiring, many organizations are investing in initiatives to retain and develop their existing talent by strengthening the employee value proposition, including improving the employee experience. (43.9%), expanding training and development opportunities (39.5%) and enhancing health and wellness benefits (37.5%). This reflects a broader focus on building workforce resilience, developing critical capabilities, and optimizing existing talent in an evolving business environment.
This cautious optimism reflects a broader trend in which employers are investing in workforce stability while selectively growing critical areas of the business where skills and talent remain in high demand.
Balancing market competitiveness and internal equity
This more targeted approach to talent and rewards is also reflected in salary administration. According to the 2025 WTW Total Compensation Survey report on General Industry, median annual base salaries by employee category and years of service show that pay does not always rise in line with tenure. In some employee groups, employees with one to two years of service have similar, and in some cases higher, median pay than employees with six to eight years of service. Clearer pay differences tend to appear only among employees with nine or more years of tenure, particularly in Sales roles.
“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,” added Chantal.
“Pay investments are increasingly being concentrated on critical roles and key talent segments, while compensation decisions for the wider employee population become more standardized.”Patrick MarquinaSenior Director, Work & Rewards, Philippines
As employers continue to make targeted investments in critical skills and address market movement for selected talent segments and hard-to-fill roles, there may be increasing pressure to ensure that salary structures appropriately recognize experience, capability and progression opportunities. Taken together, the findings point to a more targeted approach to workforce and reward management, characterized by measured salary increases, a continued focus on workforce stability and compensation investments directed toward the skills and roles that matter most.
“With compensation budgets remaining constrained, organizations have limited ability to differentiate broadly across the workforce. As a result, pay investments are increasingly being concentrated on critical roles and key talent segments, while compensation decisions for the wider employee population become more standardized,” said Patrick Marquina, Senior Director, Work & Rewards, Philippines, WTW.
About the surveys
The Salary Budget Planning Report is compiled by WTW’s Rewards Data Intelligence practice. The survey was conducted from March to May 2026. 34,024 responses were received from companies across 156 countries worldwide. In the Philippines, 408 organizations responded.
The 2025 Total Compensation Survey - Philippines was participated by over 500 organizations in the Philippines, with more than 1 million employees.
About WTW
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.
