Government workers can expect a medical allowance of up to P7,000 annually, as the Department of Budget and Management (DBM) has announced its rollout starting 2025.

DBM Secretary Amenah Pangandaman has approved the issuance of Budget Circular No. 2024-6, outlining the guidelines for providing a medical allowance to eligible government workers starting in 2025.

In a statement released on Jan. 2, DBM said the medical allowance, “in the amount not exceeding P7,000” per year, shall be given to qualified government workers to help cover the cost of health maintenance organization (HMO)-type benefits.

“The Circular applies to all civilian government personnel in the national government agencies, including state universities and colleges and government-owned and controlled corporations not covered by Republic Act No. 10149 and Executive (EO) No. 150, s. 2021,” the DBM said.

It disregards appointment status, whether they are “regular, casual, or contractual; appointive or elective; and on a full-time or part-time basis. It also covers employees in the local government units and local water districts.” 

It clarified, however, that certain government personnel are excluded from its coverage, including those already receiving HMO-based healthcare services through special laws, officials and employees in the legislative and judicial branches, and those in government-owned and controlled corporations (GOCCs) covered by different compensation systems. 

It also excludes military personnel, uniformed personnel in various safety and defense agencies, and those hired without employer-employee relationships, such as consultants, laborers under job contracts (pakyaw), student laborers, and individuals hired on job orders (JOs),contracts of service (CO), or similar arrangements.

This allowance is part of EO No. 64 s. 2024, which also includes a salary increase for government employees, signed in August 2024.

It can be provided as HMO-type coverage, available to either the government agencies or their employees’ groups.

“It can also be in cash form for those who will avail their own or pay/renew their existing HMO-type benefit,” DBM said. 

It can likewise cover medical expenses “such as but not limited to hospitalization, emergency care, diagnostic tests, and medicines, due to the difficulty in acquiring HMO-product” in the cases of workers in remote areas, those without access to an HMO branch, or those whose HMO applications have been denied.

DBM noted that employees can choose not to join the group purchase and instead select their own HMO plan if they prefer.

"This is a promise fulfilled. This has long been my dream for our fellow citizens. Starting in 2025, they will be able to receive a medical allowance to help cover the cost of HMO benefits for their health-related expenses,” Pangandaman said.