Management group: Salary hike difficult to implement next year

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Metro Manila (CNN Philippines, November 11) —The Management Association of the Philippines on Friday said it will be difficult for companies to raise employees' salaries next year.

A recent study showed pay hikes are expected due to a tight labor market and inflation concerns.

But an increase would be "very hard because a lot of businesses are still catching up," MAP Vice President Donald Lim told CNN Philippines' The Exchange. "You increase that by 6-8%, that really removes all the margins and all the profitability of any company," he added.

Employment consultancy firm Willis Tower Watson earlier reported that employers are projected to increase their salary budget for next year with a median hike of 5.7%.

Lim noted that companies can instead provide a hybrid work setup.

"So that it lessens their expenses also going to work, we have to look at the process rather than just giving a generalized 'Okay, let's increase salaries because we have no choice because of inflation,'" he said.

The inflation rate further accelerated to 7.7% in October, the highest since December 2008.