New study highlights gaps in local health budgets

The Department of Budget and Management (DBM) has endorsed a recent study by the Unilab Center for Health Policy (UCHP) highlighting gaps in how local government units (LGUs) allocate their health budgets. Officials said the findings provide valuable insights to maximize local health resources and better align spending with national healthcare priorities.

Conducted in collaboration with the Ateneo School of Government and the Ateneo Policy Center, the study analyzed LGU budget practices from 2022 to mid-2025. While health allocations grew by up to 5 percent during this period, the research found that municipalities remain highly dependent on the National Tax Allocation, which accounts for 74 to 95 percent of their funding. Most of these funds are spent on personnel salaries, leaving limited resources for health programs and services.

The study also identified overlapping requirements, delayed fund releases, and misaligned directives as obstacles to efficient spending. It recommends stronger technical support, clearer policy guidance, and closer coordination between national and local priorities.

At a presentation in Makati on Wednesday, UCHP Program Director John Basa emphasized the importance of government agencies such as the DBM, the Department of Finance’s Bureau of Local Government Finance, the Department of Interior and Local Government, and the Department of Health in supporting LGUs.

“With improved systems and alignment, LGUs can transform their health budgets from routine expenditures into powerful investments that directly improve the wellbeing of their constituents,” Basa said.

Dr. Maria Eufemia C. Yap, Senior Research Fellow at the Ateneo Policy Center, said the study was designed not only to track LGU spending but also to uncover why budget execution faces bottlenecks. She stressed that the research complements DBM’s public financial management roadmap and encourages greater fiscal accountability.

“Our ultimate aim is to convert field findings into scalable instruments for national reform,” Yap said, noting the critical involvement of local chief executives to ensure recommendations target areas where both DBM and DOH can drive meaningful change.

Budget Secretary Amenah Pangandaman, speaking through Budget Undersecretary Margaux Salcedo, said the study supports DBM’s efforts to guide LGUs in managing their health budgets more effectively.

“LGUs must ensure that their Local Investment Plan for Health and Annual Operation Plans are fully aligned with the National Health Expenditure Program, as this will enable LGUs to access counterpart funds and maximize resources for their localities,” Pangandaman said. She added that the national government is prioritizing capacity-building programs to help LGUs address planning and implementation gaps.

During a panel discussion, Naga City Mayor and former Vice President Leni Robredo highlighted the fiscal pressures LGUs face. She explained that while Naga’s reliance on the national tax allocation has decreased from 68 percent in 2023 to 58 percent in 2025, more than half of its health budget still goes to personnel services.

“Our staff remains overworked,” Robredo said. “While per capita health spending improved to 1,870 from 1,100 in 2023, as high as 45 percent of this has been absorbed by public hospitals, raising alarms over congestion and sustainability.” She also noted inefficiencies in health financing, citing PhilHealth funds being used as a “piggy bank,” and praised the city’s new ordinance establishing a consolidated local health fund.