The Philippines is set to implement significant salary increases across both public and private sectors in 2024. These adjustments aim to enhance compensation fairness, align wages with economic conditions, and boost the overall standard of living for Filipino workers.
Government Employees: Four-Tranche Salary Increase
President Ferdinand R. Marcos Jr. signed Executive Order No. 64 on August 2, 2024, initiating a four-tranche salary increase for civilian government employees.
This plan is designed to update the salary schedule from 2024 to 2027, ensuring that government compensation remains competitive and reflective of current economic realities.
| Tranche | Effective Date | Description |
|---|---|---|
| 1 | January 1, 2024 | Initial salary increase |
| 2 | January 1, 2025 | Second phase of adjustments |
| 3 | January 1, 2026 | Third phase of adjustments |
| 4 | January 1, 2027 | Final phase of adjustments |
Coverage and Exclusions
The salary increase applies to civilian personnel in the Executive, Legislative, and Judicial branches, including Constitutional Commissions, government-owned or controlled corporations (GOCCs) not covered by specific laws, and local government units (LGUs).
However, uniformed and military personnel, as well as employees of certain GOCCs, are excluded from this adjustment.
Additional Benefits
Eligible government employees will receive an annual medical allowance of PHP 7,000 to support healthcare needs.
Private Sector: Projected Median Salary Increase
In the private sector, a median salary increase of 6.2% is anticipated for 2024, up from 6% in 2023. This adjustment is influenced by factors such as competition for talent, demand for skilled professionals, and inflationary pressures.
Industry-Specific Increases
| Sector | Projected Salary Increase (%) |
|---|---|
| Energy | 7.0 |
| High-Tech | 6.8 |
| Retail & Wholesale | 6.7 |
| Consumer Goods | 6.5 |
Economic Implications
The planned salary increases are expected to have several economic effects:
- Boost in Consumer Spending: Higher disposable incomes are likely to increase demand for goods and services, stimulating economic activity.
- Poverty Reduction: Enhanced wages can improve access to healthcare, education, and other essential services, contributing to poverty alleviation.
- Inflation Control: Adjusting wages in line with inflation helps maintain employees’ purchasing power, stabilizing the economy.
Challenges and Considerations
Implementing these salary increases presents certain challenges:
- Higher Business Costs: Companies may face increased labor expenses, potentially impacting profit margins and leading to higher consumer prices.
- Implementation Difficulties: Ensuring compliance across various sectors and regions requires significant administrative effort.
- Inflation Risks: There’s a potential for a wage-price spiral, where increased wages lead to higher prices, further fueling inflation.
- Impact on SMEs: Small and medium-sized enterprises may struggle with the financial burden of higher wages, possibly resulting in layoffs or reduced hiring.
The 2024 salary increases in the Philippines represent a concerted effort to enhance compensation fairness and align wages with economic conditions.
While these adjustments offer numerous benefits, addressing the associated challenges is crucial to ensure sustainable economic growth and improved living standards for Filipino workers.
Who is eligible for the government salary increase?
Civilian personnel in the Executive, Legislative, and Judicial branches, including Constitutional Commissions, certain GOCCs, and LGUs, are eligible. Uniformed and military personnel are excluded.
When will the salary increases take effect?
The first tranche for government employees is effective from January 1, 2024, with subsequent increases each January 1 until 2027. Private sector increases are expected throughout 2024.
What additional benefits are provided to government employees?
Eligible government employees will receive an annual medical allowance of PHP 7,000.
