In a move to strengthen public sector welfare, the Philippine government has rolled out a new medical assistance initiative that promises meaningful support to its workforce. Beginning in 2025, all qualified government employees will receive a ₱7,000 annual medical allowance, aimed at alleviating the growing burden of healthcare costs. This proactive approach reflects a broader commitment to employee wellness and institutional support.
This new benefit is authorized under Executive Order No. 64, Series of 2024, signed by President Ferdinand R. Marcos Jr. It is part of a comprehensive effort to restructure employee benefits and address compensation concerns in the public sector. Implemented through the Department of Budget and Management (DBM), the program targets a wide range of government personnel, from permanent officials to contractual workers, and even those on extended leave.
The DBM has designed this program not only as a financial aid package but also as a flexible tool that empowers employees to choose how they manage their health expenses. With options ranging from Health Maintenance Organization (HMO) coverage to cash reimbursements, the initiative is both inclusive and adaptable. Oversight, transparency, and future scalability are embedded into the system, promising a lasting positive impact.
Overview of the ₱7,000 Medical Allowance
The ₱7,000 annual medical allowance was introduced to provide public sector workers with a reliable financial resource for healthcare needs. Set to begin in 2025, the benefit underscores the government’s acknowledgment of rising medical expenses and the importance of investing in workforce health. Each qualified employee will receive ₱7,000 annually, which can be used for a wide range of medical services.
The allowance is applicable to employees across all levels of government—National Government Agencies (NGAs), State Universities and Colleges (SUCs), Government-Owned and Controlled Corporations (GOCCs), Local Government Units (LGUs), and Local Water Districts. It also covers both permanent and contractual employees, appointed or elected officials, and even those on long-term leave, provided they meet service requirements.
Eligibility for the Medical Allowance
A broad spectrum of government personnel qualifies for this new health benefit. These include:
- Regular Employees with full-time permanent positions.
- Casual and Contractual Workers employed under official contracts.
- Appointive and Elective Officials from different branches of government.
- Employees on Long-Term Leave who fulfill the minimum eligibility criteria.
This wide eligibility ensures equitable access to healthcare assistance across various government sectors. Even entities like GOCCs not governed by RA 10149 and EO 150 s.2021 are included, showcasing the government’s inclusive approach.
Utilization Options: HMO or Reimbursement
The ₱7,000 allowance can be accessed in two distinct ways:
- HMO-Type Coverage: Employees can use the amount to enroll in a Health Maintenance Organization plan, granting access to medical consultations, diagnostics, hospital stays, and preventive care.
- Cash Reimbursement: For those who prefer flexibility, the allowance can be received as cash. In such cases, proof of medical expenses or HMO enrollment must be provided to ensure legitimate use of funds.
This dual-option system offers tailored support based on personal medical needs, helping workers manage health expenses more efficiently.
Implementation Guidelines and Process
To guide implementation, the DBM issued Budget Circular 2024-6. Key guidelines include:
- Disbursement Mechanism: Agencies will oversee the allowance distribution, either through HMO partnerships or cash reimbursement.
- Documentation: Employees must provide receipts or enrollment confirmation for reimbursement.
- Non-Transferable: Funds must be used strictly for healthcare purposes.
- Support System: Government offices will assign personnel to assist with claims and enrollments.
This structured framework ensures transparency and minimizes administrative delays, reinforcing accountability at every level.
Approved Medical Expenses
The program explicitly defines how the allowance can be spent:
This categorization helps employees maximize the allowance while maintaining compliance with program rules.
Monitoring and Oversight
To ensure the allowance is used effectively and transparently, the DBM has mandated:
- Annual Reports from agencies detailing utilization and impact.
- Periodic Audits to detect discrepancies or misuse.
- Regular Reviews to evaluate the allowance value against inflation and healthcare cost trends.
These oversight strategies are integral to the program’s sustainability and future enhancements.
Impact on Government Employees
The introduction of the ₱7,000 allowance is expected to significantly benefit government workers by:
- Increasing access to quality healthcare services.
- Reducing financial stress due to out-of-pocket medical expenses.
- Enhancing productivity and reducing sick leaves.
- Boosting overall job satisfaction and morale.
Budget Secretary Amenah Pangandaman emphasized that this benefit is an investment in public service—aimed not just at healthcare relief, but also at creating a more resilient and efficient workforce.