Smoke and mirrors in healthcare: Where did PhilHealth’s money go?

A few days after Christmas, PhilHealth announced that starting 1 January 2025, case rates would increase by 50 percent across nearly 9,000 benefit packages. It was framed as a breakthrough --more financial protection, fewer out-of-pocket expenses and better healthcare access.

But just days before, the government stripped PhilHealth of its national budget allocation and ordered it to remit P89.9 billion of its reserves to the National Treasury. P60 billion was already transferred. PhilHealth is being asked to pay out more while receiving less, all while its reserves are being tapped for other uses. So, where is the money going? And what happens when it runs out?

The budget realities: Who gets funded, who gets left behind

The Department of Health’s 2025 budget is P247.56 billion, a 2.69 percent increase from last year. But that doesn’t tell the whole story. Total public health spending actually declined by 3.5 percent, and PhilHealth received zero government subsidy — a stark contrast to the P01.51 billion it received in 2024 and P100.2 billion in 2023. Officials justified this by pointing to PhilHealth’s P600 billion in reserves, arguing it didn’t need additional funding. Yet at the same time, the government took nearly P90 billion from those reserves, raising the question: If PhilHealth has enough, why does it need to surrender such a large sum?

Meanwhile, other agencies saw their budgets expand. The Department of National Defense (DND) increased to P282.7 billion, nearly 10 percent more than last year. Confidential and intelligence funds across various offices remained substantial, even after a reported reduction. Security and intelligence operations are vital, but where does healthcare rank in national priorities? If universal healthcare is a national commitment, why is PhilHealth expected to “stand on its own” while other sectors receive full government support?

The first zero-subsidy year: A dangerous precedent?

PhilHealth has historically received steady government support. In 2023, the National Health Insurance Program (NHIP) was allocated P100.2 billion, a 25.3 percent increase from 2022. By 2024, it had grown modestly to P101.51 billion. Then, in 2025, that support vanished.

If PhilHealth required government funding in previous years, how is it suddenly expected to sustain itself without a single peso — while also increasing benefits? And if its financial position is so strong, why did the government take nearly P90 billion from its reserves? This move sets a precedent: if the government can take PhilHealth’s money once, what’s stopping it from doing it again?

Where did PhilHealth’s money go?

On 19 December 2024, PhilHealth transferred P60 billion to the National Treasury, with another P29.9 billion due in 2025. The government claims 78 percent of these funds were allocated to healthcare needs, including Covid-19 benefits for medical workers, indigent patient assistance and public health projects.

These are critical initiatives. But if they were so important, why weren’t they directly funded in the national budget instead of pulling from PhilHealth’s reserves? This raises sustainability concerns. PhilHealth’s 2025 budget is P284 billion, with P271 billion already committed to benefit payouts. That leaves almost no room for unexpected costs. What happens when the next crisis hits? The likeliest outcomes: delayed hospital reimbursements, stricter claims processing and, eventually, higher contribution rates for members.

And if that sounds familiar, it’s because it’s happened before.

The global context: Is this how other countries handle healthcare?

The idea of tapping into PhilHealth’s reserves instead of providing direct government funding raises a fundamental question: Is this how other countries fund healthcare?

— United Kingdom (NHS): Funded through taxation, ensuring stable resources without raiding reserve funds.

— Canada (Medicare): Financed through general revenue, meaning healthcare costs are integrated into national budgeting priorities.

— Japan (Universal Health Insurance): A hybrid of government subsidies and employer-employee contributions, but government funding remains consistent.

Nowhere is it standard practice to fund essential healthcare services by pulling from reserves while cutting subsidies. If the Philippines is serious about Universal Health Care, the government must decide: Is PhilHealth a self-sustaining insurance provider or a national safety net that requires stable government funding?

The Supreme Court case: Who controls PhilHealth’s funds?

Recognizing the risks of this precedent, a petition was filed in January 2025 challenging the government’s decision to reallocate PhilHealth’s reserves. The Supreme Court is set to hear oral arguments on whether the move was constitutional.

At stake is a fundamental question: Are PhilHealth’s funds truly for healthcare, or can the government use them as national reserves whenever needed? If the Court rules in favor of the government, it sets a precedent that PhilHealth’s reserves — and potentially those of other agencies — are fair game. If it rules against the move, the government may have to return the funds — but what happens to the public health programs that were supposedly covered by the transfer?

This case could determine whether PhilHealth remains an independent healthcare institution or just another financial extension of the national budget.

Filipinos deserve more than headlines

At its core, PhilHealth’s case rate increase is not a real victory — it’s a financial illusion. Without stable funding, promises of higher benefit rates mean little if hospitals face delayed reimbursements, if patients endure longer claim processing times, and if PhilHealth members are expected to pay higher contributions to fill the gap.

More broadly, this raises an uncomfortable truth: healthcare is not being treated as a national priority. If it were, PhilHealth would be properly funded — not used as an accounting fix. A real commitment to healthcare means consistent, transparent, and sustainable funding — not politically convenient announcements with no financial backing.

Final thought

If the government can takeP89.9 billion from PhilHealth once, what’s stopping it from doing it again? The Supreme Court case may determine the future of PhilHealth, but it also forces us to ask:

Is healthcare in the Philippines a public right -- or just another fund the government can dip into whenever it needs the cash?