MANILA, Philippines — After Congress approved a zero government subsidy for the Philippine Health Insurance Corp. (PhilHealth), the state insurer's board of directors raised its corporate operating budget to P284 billion for 2025.
This is nearly 10% more than the 2024 corporate operating budget of P259 billion.
In a statement on Tuesday, December 17, the Department of Health (DOH) explained the corporate operating budget is “PhilHealth’s version of the General Appropriations Act (GAA).”
While the GAA primarily draws revenue from taxpayers, PhilHealth's corporate operating budget is funded through member premium contributions, interests and other revenue sources.
The DOH said the P284-billion corporate operating budget for 2025 “already factors in the zero government premium subsidy for indirect contributors.”
Also part of the corporate operating budget is the national government’s subsidy for PhilHealth, which primarily funds the contributions of indigents, senior citizens, and persons with disabilities.
Congress also typically allocates funds to PhilHealth’s Point of Service program and the state insurer’s expansion of benefit packages as mandated by the Universal Healthcare Law.
Marcos-approved zero budget. However, the bicameral conference committee decided not to grant PhilHealth any government subsidy, arguing that PhilHealth's existing reserves of around P500 billion are sufficient to sustain its operations.
Even President Ferdinand “Bongbong” Marcos Jr. defended the zero national government budget for PhilHealth, citing the same reason.
RELATED: PhilHealth denied subsidy in 2025 budget, to rely on reserves
Criticisms. Some lawmakers, as well as health and finance experts, have criticized the zero-subsidy because it may lead to an increase in premium contributions and reduced benefits.
“Without government support, the burden of sustaining PhilHealth will fall entirely on direct contributors while leaving millions of indirect contributors - our senior citizens, PWDs, and indigent Filipinos - vulnerable and exposed," Rep. Arlene Brosas said (Gabriela Women's Party) in a statement on December 15.
Surplus. The DOH also said that as of October 31, PhilHealth has a surplus of P150 billion.
This surplus was calculated by subtracting the reserve fund ceiling of P281 billion — equivalent to two years' worth of benefits and operating expenses under the UHC — from the accumulated net income of P431 billion.
“PhilHealth has a lot of money, well over the reserve fund ceiling allowed by law. This surplus is a result of underspending for benefits through the years, which is why Filipino families pay high out of pocket,” Health Secretary Teodoro Herbosa said.
PhilHealth also issued a statement on Monday, December 16, assuring the public that “all PhilHealth benefits will continue to be paid and will even improve.”
How the P284 billion will be used
Most of the P284 billion corporate operating budget for 2025, specifically P271 billion, will be allocated to cover benefit claims and approved increases in case rates. This amount is about 11% higher than the allocation for 2024.
The budget will be used for the following benefit expenses:
- Z benefits
- PhilHealth Konsulta - P1,700 to P2,100 capitation per person
- 156 hemodialysis sessions - P6,350 per person
- Emergency care funds
- Outpatient mental health funds
- Severe acute malnutrition funds
- Other standalone outpatient packages.
Meanwhile, the budget for capital expenditures, including infrastructure, furniture, office and IT equipment, was reduced by 91%, from P2.878 billion to P259 million. No funds were allocated for ICT in 2025.
However, DOH said that PhilHealth’s board of directors extended the validity of the P989 billion 2024 budget for ICT “to prioritize digitalization,” since the state insurer had only spent 8% of it this year.
Another increase in case rates. Herbosa said in a statement that the board of directors has approved increasing selected case rates by 50%.
This is on top of the emergency care benefit, glasses and optometric services for children, open heart surgery benefits, and pediatric cataract extractions, DOH said.
“The Board approved higher benefits and a budget for 2025 that recognizes the need for PhilHealth to spend more so that families will spend less,” the health chief explained.
Marcos may still veto the 2025 GAA, approved by the bicam on December 11, to allocate a government subsidy for PhilHealth. However, based on his stance on Monday, this seems unlikely.