PhilHealth budget cut slammed

A health reform advocate on Wednesday warned that a reduced 2027 budget for the Philippine Health Insurance Corp. (PhilHealth) would undermine efforts to lower Filipinos’ out-of-pocket health expenses.

Dr. Anthony Leachon sounded the warning in an online video message after the House of Representatives approved a state subsidy of P74.4 billion for PhilHealth in the 2027 National Expenditure Program (NEP), far below the P244-billion health officials said the agency needs to cover projected claims.

“PhilHealth should be funded,” Leachon stressed.

He noted that Filipinos have one of the highest out-of-pocket health spending rates in Asia, at about 44.4 percent of the total health expenditure in 2023. He expressed doubt PhilHealth could meet the Universal Health Care (UHC) target of reducing that share to 38 percent by 2028 amid annual budget shortfalls.

“P800 billion is needed to reach 38 percent by 2028,” he said, citing his own estimates of the cumulative funding required.

Leachon said PhilHealth should receive more money because various laws provide for the health insurer to receive proceeds from “sin taxes” on tobacco and alcohol, as well as mandated shares from the earnings of the Philippine Amusement and Gaming Corp. (PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO).

During the House budget hearing on 24 September, Leachon said Bataan 2nd District Rep. Albert Garcia, the budget sponsor, disclosed that the government had not fully appropriated or released about P311 billion that PhilHealth was supposed to receive from sin taxes, Pagcor and the PCSO.

Leachon called for the release of the withheld funds.

“The withheld funds should be restored. The P311 billion should be returned,” he said. “We are losing a lot of money and no one is auditing it.”

Leachon said PhilHealth should receive annual funding of about P541 billion, an estimate he says is needed to properly finance its mandate and move the country closer to UHC goals.

The controversy over PhilHealth’s 2027 budget centers on a sharp reduction in the proposed state subsidy, even as the agency faces projected increases in claims.

Under the 2027 NEP, PhilHealth was initially allocated P74.4 billion, compared with P129.78 billion under the 2026 General Appropriations Act.

Health officials, including PhilHealth president Beverly Lorraine Ho and Health Secretary Edwin Mercado, have said the agency needs around P244 billion in 2027 to cover projected claims, particularly for indigent and other indirect contributors whose premiums are subsidized by the government.

Garcia disclosed during the hearing that about P311.4 billion in funds intended for PhilHealth had not been fully appropriated or released. The amount included unappropriated mandated funding and funds appropriated in previous years but not yet released.

The funding provisions are rooted in the Sin Tax Reform Law and other measures that earmark specific revenues for health programs and UHC financing. Leachon and other health advocates have criticized the delayed release of these funds, arguing that it limits PhilHealth’s ability to expand coverage and benefits.

The debate over the 2027 allocation and the release of mandated funds has placed PhilHealth’s financing at the center of discussions over the government’s health priorities and efforts to reduce households’ financial burden from medical expenses.