$600-M ADB loan to support Philippines' Universal Health Care program

MANILA, Philippines — Manila-based Asian Development Bank (ADB) is extending a $600-million loan to its host country to improve services of the government’s universal health care program.

The loan facility arrived in the middle of the country’s recovery efforts from the pandemic, which battered its already-weak healthcare system. The policy-based loan, called the Build Universal Health Care Program, will ideally support health services and monitor the performance of healthcare providers, ADB said in a statement on Friday.

“This program seeks to boost the government’s ability to achieve its UHC goals and provide timely and equitable health care services, especially for the poor and marginalized across the country,” ADB Director of Human and Social Development for Southeast Asia Ayako Inagaki said.

Interest to be charged for the loan will be set by the ADB’s London interbank offered rate-based facility under a payment term of 15 years, including a grace period of three years. The fresh credit will add to the Philippines' growing debt pile, which amounted to record P11.92 trillion as of end-September.

The ADB said the loan will support the country’s Universal Health Care law, which automatically enrolls Filipinos in the National Health Insurance program implemented by Philhealth. The law was designed to steer clear of common problems of Filipinos like paying for out-of-pocket medical expenses and receiving sub-optimal health services.

At the onset of the pandemic, state insurer PhilHealth was supposed to cushion medical bills of the public, even announcing it would release P30 billion to hospitals around the country. However, the pandemic proved its undoing as delayed reimbursements to hospitals threatened operations and corruption schemes were unveiled.

Filipinos who turn to PhilHealth to shoulder medical bills risk losing this social welfare as some doctors want to disengage from the national insurance provider.

According to the ADB, the policy-based loan will advance the use of digital use for the health sector and data sharing of databases and health information systems, which the Philippines struggled over the course of the pandemic.

The ADB will also extend a $2-million technical assistance grant from Japan Fund for Poverty Reduction to aid the implementation of health policy reforms in local governments. The UHC law penciled in reforms for the healthcare system over a number of years.

“This new ADB program will help the government boost financing for UHC, expand the supply of health facilities and workers, enable the integration of health care providers, and enhance health system efficiency,” said ADB principal health specialist for Southeast Asia Eduardo Banzon.