PhilHealth underspending seen enabling gov’t raids on its funds

By Beatriz Marie D. Cruz, Reporter

THE Philippine Health Insurance Corp. (PhilHealth) would not have “excess” funds for the government to tap if it had been used the money to support healthcare reforms, GlobalSource Partners said.

“If the National Government opted to reform the PhilHealth yesterday and compelled its adherence with its mandate of providing universal healthcare, there would have been no ‘excess’ funds to begin with,” GlobalSource country analyst Diwa C. Guinigundo said in a brief.

Following a provision in the 2024 General Appropriations Act, the Department of Finance asked PhilHealth to remit P89.9 billion in “excess funds” to the Bureau of the Treasury (BTr).

The third tranche of fund transfers amounting to P30 billion is scheduled for October, while P29.9 billion is due in November. Earlier, PhilHealth remitted P20 billion and P10 billion on May 10 and Aug. 21, respectively.

Finance Secretary Ralph G. Recto has said the government needs to mobilize unused funds to finance key programs without incurring additional debt.

Mr. Recto also said that PhilHealth would still have P500 billion in reserves even after the scheduled fund transfers.

However, GlobalSource’s Mr. Guinigundo said that “public health is a matter of life and death, while infrastructure and other social services can wait another day.”

Citing Republic Act No. 11223 or the Universal Health Care Act, Mr. Guinigundo noted that PhilHealth’s reserves should be used solely to increase benefit packages or reduce member contributions. 

“When decent healthcare in the Philippines remains inaccessible for many Filipinos, even the P500 billion in PhilHealth’s reserve funds are short of its requirements to deliver on the law on universal healthcare.”

Healthcare industry representatives have asked the Finance department to stop the upcoming fund transfers, calling it “unjust to take these funds for other purposes, when the unmet need for healthcare is enormous.”

Around 44% of healthcare spending is out of pocket, the industry representatives said.

Meanwhile, PhilHealth’s decision to manage its funds via treasury operations despite its increasing payables is “bad fiscal management,” according to Mr. Guinigundo.

“It is crystal clear that the optimal use of public funds is not the issue here. It is PhilHealth’s failure to use its funds to provide health coverage to millions of Filipinos; it is PhilHealth’s incompetence in broadening public health benefits,” he said.

PhilHealth still owes government hospitals P14.8 billion, Health Secretary Teodoro J. Herbosa told a House of Representatives hearing last week.

“With many priority projects kicked out of the programmed appropriations and on to unprogrammed appropriations, but with higher allocations for the Office of the President, Senate, House of Representatives, and the Department of Public Works and Highways, the government is now scraping the bottom of the financing barrel,” Mr. Guinigundo said.

In January, the Supreme Court will hear oral arguments from petitioners challenging the constitutionality of the PhilHealth fund transfers. All four tranches will have been remitted to the Treasury by then.