The year 2024 brings with it a wave of optimism for employees in the Philippines, as they can expect a substantial salary hike. This increase is a consequence of the Salary Standardization Law of the Philippines, which mandates yearly salary adjustments based on prevailing trends.
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Philippines Minimum Wage Increase 2024
Planning for salary hikes is a multifaceted process that takes into account various elements. Inflationary tendencies and a competitive job market are two major influences. As per the proposed legislation, the Department of Budget and Management (DBM) is set to roll out a revised salary hike schedule in four tranches, starting from January 1, 2024, and continuing annually until 2027.
The aim of the Philippines Salary Increase System is to boost employee accountability and productivity by eliminating individual wage negotiations.
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Daily Minimum Wage in the Philippines
The minimum wage in the Philippines remained the same from 2023 to 2024, at 610 PHP per day. However, it’s important to understand that the minimum wage varies by province in the country. Over the years, it rose from 89.00 PHP/day in 1989 to an all-time high of 610.00 PHP/day in 2023. The average daily wage from 1989 to 2024 was 354.32 PHP.
Regional Variations in Minimum Wage
The Philippines has varying minimum wages across its different regions. In January 2024, Metro Manila, also known as the National Capital Region (NCR), recorded the highest actual minimum wage at 505.23 Philippine pesos daily. Following closely is Region IV-A, or CALABARZON, with a minimum wage of 420.71 Philippine pesos per day.
According to Wage Order No. IVA-19, published on June 14, 2022, the daily minimum wages for Calabarzon (Region IV-A) in the Philippines have been raised. This raise applies to all private sector workers, regardless of their role, standing, title, or method of pay. It pertains to a standard workday not exceeding eight hours.
Expected Salary and Minimum Wage Increase in the Philippines
Multiple important elements that impact the job market are expected to result in a rise in the median wage growth for Filipino employees, from 6% in 2023 to 6.2% in 2024. Moreover, companies in the Philippines are continuing to allocate funds for a total median wage increase of 5.7% in 2024.
In the past few years, following the pandemic, average salaries have gradually increased. This year, we have seen similar patterns in different sectors across the country. The increasing demand for highly skilled workers and the competition to retain top talent in the industry are the primary factors contributing to this trend. The adjustments in salaries are also greatly impacted by persistent inflationary pressures.
Industry-wise Demand
Demand is higher in some industries than in others. According to Mercer:
- The highest salary increase, at 7%, is expected to be in the energy sector.
- Other sectors, such as consumer products, retail and wholesale, and high technology, are also expected to experience growth, with anticipated increases of 6.8%, 6.7%, and 6.5%, respectively.
Conclusion
The Southeast Asian region has traditionally been a centre of economic advancement, drawing in talent from around the globe. With the potential for an upcoming economic downturn, the considerations of wage growth, employee retention, and workforce solidity become increasingly crucial. In these demanding times for companies, simply raising salaries is not a sustainable solution on its own.
Businesses must effectively handle human expenses and profitability, among other factors, to ensure long-term prosperity. This comprehensive overview provides an in-depth understanding of the projected salary hike in the Philippines for 2024. It delivers valuable insights for both workers and employers in the area.
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