Spotlight on the Philippines – A guide to rolling out employee benefits technology

The Philippines, with its rich talent pool, continues to attract businesses from around the globe. As more companies establish their presence in the region, the competition for top talent is intensifying, particularly among the younger, tech-savvy workforce. These employees aren’t just looking for any job; they have high expectations when it comes to benefits – and are looking for greater flexibility and choice.  

Indeed, 48% of global employees would like more flexibility in the benefits they choose and see this as the main way benefits provision could be improved, with only 22% of employees rating their current benefits as flexible. 

As employers seek to differentiate themselves from the competition, it’s essential to deliver a benefits package and experience that meets these evolving employee expectations. 

An overview of the benefits landscape in the Philippines 

State Provision 

Most employee benefits in the Philippines are state provided through the Social Security System (SSS). However, many companies opt to offer supplemental coverage to enhance the basic benefits provided by the state.  

Retirement benefits are provided through one of the following Social Security plans, administered by the Social Security System (SSS): 

• Social Security System program 

• Mandatory Provident Fund (MPF), known locally as Workers’ Investment and Savings (WISP) program 

And employers are also required to provide retirement pay, which is an additional amount provided to a covered employee who is retiring, typically through a retirement plan or self-insurance. 

Popular core benefits 

Medical insurance 

PhilHealth (state healthcare), funded in part by government subsidies and financed through company payroll deductions, provides free healthcare to all residents. It covers emergency care, inpatient care and some non-emergency surgeries. However, long wait list times, limited coverage for certain treatments, and a shortage of public hospitals make private insurance very appealing for employees.  

While medical plans are usually linked to the state-run PhilHealth programme, employers often offer additional benefits like access to general practitioners not covered by the national health scheme, as well as dental, optical, and maternity care – all of which are highly valued by employees. 

How the benefits are funded can vary, with some companies fully funding the benefit and others offering co-funded or voluntary plans; the level of funding is often based on the employee’s job grade. Many multinational companies extend medical coverage to an employee’s partner and one or two children. Some also provide the option to add their parents to the plan. 

Life and disability cover 

Life and disability insurance are common benefits, typically providing coverage of two times the employee’s annual salary. Disability cover usually includes a lump sum payment and may also provide cover for terminal illnesses – with payment upon the diagnosis of a life-threatening condition. 

Supplementary pension 

The minimum monthly Retirement Pension is ₱1,200 if the member’s credited years of service (CYS) is between 10 and 20 years; or ₱3,400 if their CYS is 20 years or more.

However, nearly all multinational companies in the Philippines offer a supplementary pension plan, with contributions from both the employer and employee. Employer contributions range from 5% to 9% of the employee’s salary, with employee contributions ranging from 3% to 9%. 

Additional benefits offered by organisations in the Philippines 

Allowances and subsidies   

Allowances and subsidies are a significant part of the benefits package in the Philippines. Allowances have been popular in Asia for some time and are now being adopted in other regions such as Europe. Indeed, 78% of organisations plan to introduce at least one benefit allowance in the next 12 months. 

Common allowances in the Philippines include: 

• Subsidised lunches/canteen services: employers often provide subsidised lunches or canteen services for senior executives, middle managers, and clerical and administrative employees. Canteen services are especially common for employees whose workplace is outside of cities and towns.  

• Commuting costs: many employers cover the cost of commuting to work, as well as transport costs for employees who work unsocial hours. In areas with limited public transport, employer-sponsored buses are also common. 

• Professional organisation memberships/education and courses: Senior executives receive memberships to professional organisations relevant to their role. Sponsored education or courses, including online learning, are highly valued by employees. 

• Low-cost loans: multinational employers and local banks commonly offer low-cost loans for various purposes. For example, Home Development Mutual Fund (HDMF), also known as Pag-IBIG fund, is a government program that provides housing loans and financial assistance to Filipino citizens in search of affordable housing. 

• Tech allowances: employers frequently provide mobile phones and laptops for senior executives and middle managers – they either loan employees the tech or provide an allowance towards the cost of new tech. Some companies in the technology sector even offer allowances for employees to buy devices for themselves in an effort to attract a young workforce. 

• Uniform and clothing allowance: typically ranging from PHP 10,000 to PHP 15,000 per year. 

• Car allowance: access to a car allowance or provision is also very common for senior employees. 

• Wellbeing or leisure allowance: With 58% of people who are actively looking for a job rating an organisation’s commitment to employee wellbeing as very important, it’s no surprise that wellbeing or leisure allowances are also becoming popular in the Philippines, allowing employees to choose benefits that suit their personal needs. 

The workforce in the Philippines is generally young and eager for travel and learning opportunities, making benefits like holiday buy and travel vouchers increasingly popular as well. 

De minimis fringe benefits 

De minimis fringe benefits are small perks provided by employers that are tax-free. These benefits are intended to care for employees without incurring significant tax liabilities. However, because they are typically offered on an occasional basis and are of little value, it’s more difficult to track them. Examples include: 

• Medical cash allowance: up to ₱1,500 per semester (half yearly) or ₱250 per month (usually included as a salary uplift) 

• Rice subsidy: ₱2,000 or one 50kg sack of rice per month 

• Uniform and clothing allowance: up to ₱6,000 per month 

• Laundry allowance: up to ₱300 per month 

• Christmas and major anniversary celebrations: up to ₱5,000 per employee per annum 

Other considerations to be aware of when planning to rollout your benefits programme in the Philippines 

While English is widely spoken in the Philippines, documentation typically follows American English conventions, including date formats. It’s also important for employers to consider the varying needs of employees across the country’s major cities, as local requirements can vary.  

For employers looking to expand or improve their benefits offering in the Philippines, understanding the local nuances and expectations is key. By offering a competitive and flexible benefits package, companies can better attract, engage, and retain the top talent in this vibrant and growing market.  

To learn more about how a global benefits platform can help you deliver a seamless employee experience in the Philippines, and around the globe, download ‘Your guide to global benefits tech’, or speak to one of our benefits experts.