MANILA - Eight out of 10 companies in the Philippines are projected to increase salaries this year despite the continuing impact of the COVID-19 pandemic, an insurance and advisory firm said Monday.
At least 82.4 percent of companies in the country are forecast to increase salaries with fewer implementing salary freezes "signaling employers optimism for this year," Willis Towers Watson (WTW) said based on its latest Salary Budget Planning Survey report.
According to the firm, some companies lowered their pay rise budgets to an increase of just 5.5 percent last eyar, compared to the 6 percent average in 2019.
The Philippines has seen its lowest average salary increase in more than a decade in 2020, it said.
“After a difficult year for employers and employees – battling lockdowns, employee safety issues, working from home and declining revenues – many employers are finding ways to handle the crisis better, manage their businesses and help their employees with a more focused work and reward strategy,” said WTW head of Talent and Rewards in the Philippines Patrick Marquina.
The number of firms expecting to freeze pay is also projected to decline "sharply" this year to 13 percent from 28 percent last year, a sign of cautious optimism, WTW said.
Despite the anticipated increase in salary raise, companies are expected to see smaller salary budgets, Marquina said. No data on smaller salary budget has been shared.
"It is important for employers to differentiate their allocation of pay rises, so that they can provide meaningful salary increases for their best and most valuable talent, and prioritize spending on jobs that are likely to contribute the most to the success or survival of their businesses," he said.
The most optimistic industries this year are pharmaceutical and health sciences, electronics manufacturing, and business support services including Business Process Outsourcing.
These industries would continue to increase demand for talents, it said.
The Philippines imposed one of the world's longest and strictest lockdowns in 2020, shuttering transport, schools and businesses, and pushing unemployment to an average of 10.4 percent last year.
The DOLE has disbursed cash assistance to workers in the formal and informal sector as well as for Overseas Filipino Workers.