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P7K medical allowance for qualified gov't workers begins in 2025 —DBM


President Ferdinand Marcos Jr.’s commitment to grant medical allowance to civilian government employees is coming to fruition this year as the rules and regulations covering the disbursements of the benefit took effect on January 1, 2025.

In a statement on Thursday, the Department of Budget and Management (DBM) said Budget Secretary Amenah Pangandaman approved the issuance of Budget Circular No. 2024-6, dated December 12, 2024.

Circular 2024-06 provides the guidelines, rules, and regulations on the grant of the medical allowance to qualified civilian government personnel beginning Fiscal Year 2025.

The provision of medical allowance—not exceeding P7,000 annually—to government workers was authorized under Executive Order (EO) No. 64 s. 2024—which also prescribes the salary increase for government personnel signed by the President on August 2, 2024.

"This is a promise fulfilled," said Pangandaman.

The DBM said the medical allowance “shall be given to each qualified civilian government personnel as a subsidy to avail of health maintenance organization (HMO)-type benefits.”

The Budget Department said that the grant of medical allowance 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 EO No. 150, s. 2021, regardless of appointment status, whether regular, casual, or contractual; appointive or elective; and on a full-time or part-time basis.

The benefit also covers employees in the local government units and local water districts.

The DBM said the medical allowance may be granted in the form of HMO-type product coverage, which could be availed by either government agencies concerned or their respective employees' organizations/groups.

It can also be in cash form for those who will avail themselves of or pay/renew their existing HMO-type benefit, and for those who paid their medical expenses, such as but not limited to hospitalization, emergency care, diagnostic tests, and medicines, due to the difficulty in acquiring HMO products given the following:

  • Their localities/communities are identified as Geographically Isolated and Disadvantaged Areas
  • Their localities have no adequate HMO branch or office of a licensed HMO company
  • The application of the personnel concerned in acquiring HMO coverage has been denied by an HMO company

The DBM said that such an arrangement “is without prejudice to the preference of employees to opt out from group purchase, and individually avail of another HMO product.”

Exclusions

Meanwhile, the Budget Circular also provided a list of those who are excluded from receiving the medical allowance.

The following are excluded from the coverage of the benefit:

  • Government officials and employees who are already receiving HMO-based health care services by virtue of special laws
  • Officials and employees in the legislative and judicial branches and to other offices vested with fiscal autonomy
  • Officials and employees in GOCCs under RA No. 10149 and EO No. 150, which shall be covered by Compensation and Position Classification System established by the GCG (Governance Commission on GOCCs) and approved by the President
  • Military and uniformed personnel

Also excluded from receiving the medical allowance are “those hired without employer-employee relationships and funded from non-Personnel Services appropriations,” such as:

  • Consultants and experts hired for a limited period to perform specific activities or services with expected outputs
  • Laborers hired through job contracts (pakyaw) and those paid on piecework basis
  • Student laborers and apprentices
  • Individuals and groups of people whose services are engaged through job orders, contracts of service, or others similarly situated

In his third State of the Nation Address last July, Marcos committed that government employees would receive a medical allowance as an additional benefit this year.

Pangandaman had earlier disclosed that the then proposed P6.35-trillion national budget for 2025 includes an allocation of almost P10 billion for HMO benefits for government workers. —VBL, GMA Integrated News