HMO profit surges to P579 million in Q1

MANILA, Philippines — The health maintenance organization (HMO) industry has sustained its profitability in the first quarter as membership fees increased.

In a statement, the Insurance Commission said the HMO sector’s net income reached P579.39 million from January to March, a whopping 8,000-percent  jump from the P6.78 million earnings in the same period last year.

“This significant increase demonstrates the industry’s sustained recovery from the impact of the pandemic,” IC commissioner Reynaldo Regalado said.

Notably, this was driven by the increase in the collection of membership fees to about P22.4 billion, up by 26 percent.

Regalado said the growth in membership fees was driven by the P7,000 medical allowance for qualified government employees.

The higher membership fees managed to offset the higher benefits and claims released by 28 HMO firms covered in the report, which rose by 17.4 percent to P17.7 billion from P15.05 billion in 2024.

Benefits and claims made up almost 80 percent of the total industry expenses at P22.4 billion.

Further, total assets handled by HMOs went up by 23 percent to P87.48 billion on the back of higher net membership fee receivables, financial assets at amortized cost and cash in banks.

Total invested assets also rose by 11 percent to P18.37 billion on higher cash equivalents and investments in subsidiaries, joint ventures and associates.

Liabilities, however, also increased by 23 percent to P75.52 billion, attributed to the nearly 80-percent hike in membership fee reserves amounting to P17.89 billion, which are essential for an HMO to meet its financial obligations and ensure the long-term sustainability of its operations.

HMO equity grew by 22 percent to P11.96 billion due to the increase in retained earnings by 120 percent.