The Department of Finance (DoF) did not disclose the failure of the Department of Budget and Management (DBM) to release the Philippine Health Insurance Corp. (PHIC or PhilHealth) subsidy worth P28.076 billion in 2023.
On July 30, 2024, Finance Secretary Ralph Recto testified under oath to the Senate Committee on Health and Demography to explain that “excess subsidies” from 2021 to 2023 would be the fund source for the P89.9 billion that PhilHealth would give up. He inflated that figure by at least P28.07 billion since the DBM never released the full subsidy in 2023. In 2023, PhilHealth actually suffered a P12 billion deficit in its payout of benefits to indirect members since it received only P50 billion of the P78.8 billion that the General Appropriations Act (GAA) approved.
The evidence comes from PhilHealth’s 2023 Financial Statement.
From the PhilHealth Financial Statement 2023 Technical notes:
“Due from the NGAs (national government agencies) account represents premium contributions for the following:… 2023… National Household Targeting System for Poverty Reduction (NHTS) No. of enrollees: 12,618,921… Amount: 28,076,492,000.”
To add insult to this injury, Secretary Recto covered up PhilHealth’s negative equity by showing a positive “Member’s Equity (w/o Insurance Contract Liabilities)” of P485.341 billion when in fact PhilHealth had a negative equity of P664.315 billion, the second highest negative equity among Government-Owned and -Controlled Corporations (GOCCs) in 2023. (See the accompanying table named “Ten CPSDEs with Highest Negative Equity CY 2023.”)
The two agencies were on a mission to justify sweeping up PhilHealth’s reserves (already encumbered by negative equity). The agencies needed to paint a picture of the PhilHealth being awash with funds. They only succeeded in showing a willful and deliberate cover-up of the PhilHealth’s financial state. The Financial Statement showing receivables from DBM and negative equity was issued on Dec. 31, 2023 (most probably finalized in February 2023).
Since those statements were kept by the Commission on Audit from the public until December 2024, no one could question the veracity of the testimony of Secretary Recto until now.
The DBM and DoF Secretaries, as members of the Board of Directors of PhilHealth, are probably the most complicit in any cover-up since their role in the Board is to ensure the financial integrity of the GOCC.
The DBM chose to allow the DoF to deliberately remove funds from PhilHealth that were never given to them in 2023.
Furthermore, we ask: Where have all the unreleased sin taxes earmarked for PhilHealth gone?
The DBM and DoF have been sequestering sin taxes collected in 2023 and 2024. PhilHealth has not been given its full share of the earmarked sin taxes. Of P83.9-billion sin tax collections in 2023, P78.8 billion was appropriated and only P50 billion was released. In 2024, of the P79.02 billion in sin taxes collected, only P40 billion was appropriated and only P10.082 billion was released by the DBM.
Altogether from 2023 to 2025 (including the 2025 expected sin tax collection of P69.8 billion), P142.78 billion is unaccounted for. The DBM and DoF should explain whether they are holding on to these funds or if the amount has been used for other purposes. The Supreme Court should take these agencies to task if they have not complied with the Sin Tax Law.
The consequence of defunding PhilHealth is the failure of Universal Health Care (UHC) from becoming truly universal.
For the first time in a decade, PhilHealth’s membership registration has declined to a level not seen since 2014, now down to 91% of the population. With the poor, elderly and disabled deprived of any premium in 2025, membership registration could decline even further to 57% of the population in 2025.
This will make UHC a farce. With private health facilities already under pressure from unpaid PHIC claims, the private health sector may just start passing up on indirect members without premiums and referring them to DoH and local government units’ (LGU) health facilities.
The pressure of the increasing volume of patients in overcrowded DoH hospitals will worsen this year while Congress and Malacañang ask the PhilHealth to expand benefits without funding them.
UHC in the Philippines is held up by three elements:
1.) A viable Social Health Insurance scheme;
2.) A primary and secondary healthcare network attending to 80-90% of people’s health; and,
3.) A tertiary healthcare network attending to the most catastrophic health conditions (10% of people’s health).
Those elements have never worked in harmony despite over five years of UHC implementation since 2019.
The accumulation of resources in PhilHealth is a reflection more of the failure of LGUs and the DoH to attend to people’s health needs compounded by a clueless PhilHealth, which thinks expanding benefits will cure everything.
The political structure totally disregards the future of UHC in the country by superficially condemning the incompetents running social health insurance and their accumulated resources, and transferring those resources to political patronage in the guise of medical assistance programs like MAIP (Medical Assistance for Indigent Patients), which got P41 billion in the infamous 2025 GAA. Sadly, the DoH and PhilHealth leadership can only agree to this kind of polluted political compromise.
Defunding PhilHealth is clearly an agenda of the current administration which has sequestered nearly P143 billion in the last three years alone in sin taxes.
They are further advancing this anti-poor agenda by undermining the sources that fund social health insurance, specifically removing the indexation of tobacco taxes, which will thus result in less revenues. This move by Congress is clearly intended to protect the tobacco industry and sideswipe universal healthcare.
The administration’s anti-health and anti-poor agenda violates the right to health of all Filipinos enshrined in the Constitution and existing laws. The 2025 GAA defunding social health insurance is a shot taken by the political elite to shape a health system where health services are a commodity handed out by politicians and bureaucrats.
They should be warned that they are not the only ones that have a shot.
Jeepy Perez, MD specializes in public health administration, primary healthcare, and has worked with nine Health Secretaries and three NEDA Secretaries since 1992. He was undersecretary for Population and Development and executive director of the country’s Commission on Population and Development up to Sept. 8, 2022 when he retired. He occasionally writes for Action for Economic Reforms.
