In a significant development for Filipino workers, the government of the Philippines has confirmed salary increases across both public and private sectors in 2025. This move is part of a broader initiative to counter rising inflation, support household incomes, and improve national wage competitiveness.
With a phased rollout, this year’s adjustments are carefully structured to ensure economic stability while addressing the financial needs of workers from all sectors.
Salary Upgrades for Government Employees Under SSL VI
Public sector employees will benefit from the ongoing Salary Standardization Law VI (SSL VI), a four-year wage reform program running from 2024 to 2027. In 2025, the second phase comes into effect, bringing salary enhancements based on each employee’s grade, role, and tenure.
In addition to wage hikes, all government employees will receive a ₱7,000 annual medical allowance to ease healthcare costs. Around ₱70 billion has been allocated to fund these salary revisions, underscoring the government’s commitment to long-term wage equity.
Understanding the Salary Grade System
The Philippines follows a Salary Grade (SG) system for public employees, with 33 levels that assign pay based on responsibilities and rank. The SSL VI revision brings important changes to SG levels, especially for mid-tier employees, helping close wage gaps while responding to inflation pressures.
Private Sector Salary Growth in 2025
The private sector is also poised for salary increases, with average projected growth set at 5.8%. These market-driven adjustments aim to retain talent, improve job satisfaction, and respond to the rising cost of living.
Pay raises will vary by industry and company performance, with the following sectors expected to lead:
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Technology
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Finance
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Healthcare
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Manufacturing
Regional Wage Disparities Remain
The minimum wage across Philippine regions continues to reflect localized cost-of-living differences. Updates are managed by Regional Tripartite Wages and Productivity Boards, ensuring area-specific wage fairness.
As of May 2025, the regional wage rates are:
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Metro Manila: ₱505.23/day (highest)
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Calabarzon: ₱420.71/day (second highest)
Other regions are scheduled for wage reviews throughout the year.
Summary of 2025 Salary Reforms
| Sector | Key Details | Expected Increase |
|---|---|---|
| Government | SSL VI Phase 2 + ₱7,000 medical allowance | Salary grade-based |
| Private | Industry-based hikes for retention and inflation | Avg. 5.8% |
| Metro Manila | Top regional minimum wage | ₱505.23/day |
| Calabarzon | Second-highest regional wage | ₱420.71/day |
Economic Impact of Wage Increases
The 2025 salary reforms are expected to produce wide-ranging benefits:
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Improved living standards: Higher wages support daily needs and long-term savings.
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Boosted spending: More income means more purchasing power, which fuels economic growth.
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Retention of talent: Competitive salaries reduce employee turnover.
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Inflation moderation: Well-planned wage hikes, coupled with productivity, help manage inflation sustainably.
Conclusion
The 2025 salary hike initiative signals a progressive step towards a more inclusive and resilient Philippine economy. Whether through structured increases for public servants or competitive pay rises in the private sector, the reform ensures that Filipino workers are better equipped to face economic challenges while enjoying fairer compensation.
FAQs
What is SSL VI and how does it affect government employees?
SSL VI is the Salary Standardization Law VI that provides structured pay increases from 2024 to 2027 for public employees. In 2025, it enters Phase 2, ensuring higher pay based on position and grade.
How much of a raise can private sector employees expect?
Private sector salaries are projected to increase by 5.8% on average, though exact amounts may vary by industry, role, and performance.
Are there new benefits for government workers in 2025?
Yes. All government employees will receive a ₱7,000 annual medical allowance starting in 2025 to support their healthcare expenses.
Which sectors are likely to offer the highest private sector raises?
Industries such as technology, finance, manufacturing, and healthcare are expected to lead salary growth due to strong performance and high talent demand.
Will the minimum wage rise again in 2025?
Yes. Regional wage boards will continue to review and update minimum wages based on inflation trends and cost-of-living factors throughout the year.
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Aanchal is a passionate writer with a keen interest in storytelling, content creation, and creative expression. She enjoys exploring diverse topics and crafting engaging narratives that captivate readers.