PhilHealth sets P284-B budget for 2025 without subsidy

Metro Manila, Philippines - The state-run health insurer approved a budget of P284 billion for next year that factored in the absence of subsidy from the national government.

In a statement, the Department of Health (DOH) said the Philippine Health Insurance Corp. (PhilHealth) board approved the 2025 budget on Monday, Dec. 16, which will be 10% higher than the current outlay of P259 billion.

“The Board-approved COB (corporate operating budget) 2025 already factors in the zero government premium subsidy for indirect contributors for 2025, as decided by the Bicameral Conference Committee of Congress,” the DOH said in its statement Tuesday. 

“It includes computations by PhilHealth management of a P150 billion surplus as of Oct. 31, 2024,” it added.

Health Secretary Ted Herbosa is chairperson of the board of directors, with the secretaries of Finance, Budget and Management, Social Welfare and Development, and Labor as ex-officio members.

Assurance

In a media forum, Herbosa said he cannot blame legislators for their decision to totally remove the P74-billion national subsidy.

“Hindi po magsasara ang PhilHealth [PhilHealth will not shut down],” he said. “Even without the subsidy, we can continue to provide all the health benefits dito sa population na ‘to indirect: indigent, senior citizens, PWD (people with disability).”

Herbosa also said the cut would have a “minimal” impact on the corporation.

“Ang effect [The effect], I think, PhilHealth will try to make sure that it efficiently serves the management of the funds given to it. Hindi pwedeng maipon lang siya tapos walang benefit [It should not only be stored without benefit],” he said.

In a hearing of the House committee on good government and public accountability, PhilHealth President and CEO Emmanuel Ledesma said the corporation “remains steadily on course in its mission.”

He acknowledged, though, that the subsidy is “historically vital” to enhance PhilHealth programs.

“What we can assure in any case is that PhilHealth management will optimize our resources and safeguard every peso entrusted to us and make sure it is spent effectively and responsibly,” Ledesma told lawmakers.

Budget breakdown

PhilHealth’s corporate budget is mainly financed by premium contributions. Other revenue sources are interests and other income and the national government subsidy. The subsidy was meant to cover contributions of indigents, senior citizens, and persons with disabilities, as well as other programs.

The DOH said the surplus fund is the total amount after deducting the reserve fund ceiling of P281 billion from the accumulated net income over the years of P431 billion.

“PhilHealth has a lot of money, well over the reserve fund ceiling allowed by law,” Herbosa was quoted as saying. “This surplus is a result of underspending for benefits through the years, which is why Filipino families pay high out of pocket.”

For the 2025 budget, PhilHealth increased the allocation for benefit expenses by 11% to P271 billion.

“This increase takes into account Board-approved increases in case rates, Z benefits, PhilHealth Konsulta at P1,700 and P2,100 capitation per person, and 156 hemodialysis sessions at P6,350 per session,” the DOH said.

The agency said it also includes funds for emergency care, outpatient mental health, severe acute malnutrition, and other standalone outpatient packages.

Administrative expenses for next year also went up by 3% to P12.5 billion, while capital expenditures took a big cut to P259 million from the current P2.9 billion.

“The Board observed that Management used only 8 percent of its COB 2024 for the purchase of information and communications technology (ICT) and other capital expenditures,” the DOH explained. “While it did not grant a new ICT budget for FY 2025, the Board extended the validity of the COB 2024 for ICT projects in the amount of PHP 989 million to ensure that digitalization is prioritized.”

President Ferdinand Marcos Jr. on Monday said PhilHealth has “sufficient funds to carry on” with P500 billion in reserve funds. 

He said PhilHealth has capacity issues in processing claims.

Meanwhile, the DOH said PhilHealth approved a second round of increases in selected case rates by as much as 50%.

“This is in addition to an emergency care benefit, glasses and optometric services for children, open heart surgery benefits, and pediatric cataract extractions,” it said.