Philippines Raises Allowance Limits to Ease Workers' Burden

The Philippines government is reviewing tax relief for private‑sector workers and civil servants amid rising inflation and living costs. Finance Minister Ralph Recto said on Monday, 27 October 2025, that the threshold for employee allowances that lower tax calculations will be raised.

The package raises the health allowance for dependents to PHP 2,000 every six months, the rice allowance to PHP 2,500 per month, and the uniform allowance to PHP 8,000 per year. It also sets higher limits for medical aid, laundry allowances, performance awards and holiday or birthday gifts.

Recto noted the change may cut potential government revenue, but expects higher household consumption and improved competitiveness among businesses as a result.