Section 2March 22, 2001, Sec./Art. 2

A Medal of Valor awardee will henceforth be entitled to a lifetime monthly gratuity of Twenty thousand pesos (P20,000.00). This gratuity is separate and distinct from any salary or pension which the awardee is currently receiving or will receive from the government of the Philippines: Provided, That in the event of death of the awardee, the same shall accrue in equal shares and with the right of accretion to the surviving spouse until she remarries and to the children, legitimate, or adopted or illegitimate, until they reach the age of eighteen (18) or until they marry, whichever comes earlier: Provided, further, That such gratuity shall not be included in the computation, of gross income and shall be exempt from taxation under Title III, Chapter VI of Republic Act No. 8424, otherwise known as then "Tax Reform Act of 1997" .

The provisions of this Act shall apply to the Medal of Valor awardees under Presidential Decree No. 1687 who have since been integrated to the Philippine National Police (PNP); Provided, That the appropriations therefor shall come from the Philippine National Police.

The President of the Philippines is hereby authorized, upon the joint recommendation of the Chief of Staff of the Armed Forces of the Philippines, the Secretaries of the Department of National Defense and the Department of Budget and Management, to adjust at a reasonable time and rates the lifetime monthly gratuity of the awardees: Provided, That in computing for the rate of adjustment of the lifetime monthly gratuity, they shall take into consideration applicable economic and social factors or indicia such as the inflation rate: Provided, further, That no increase under this section shall be authorized within three (3) years following the effectivity of this Act and no oftener than once every five (5) years thereafter.