PhilHealth is sounding the alarm on the long-term sustainability of its benefit expansion program, with its president and chief executive officer warning that the current pace of growth in benefit costs cannot be maintained beyond 2026 without a fundamental shift in how the country’s health financing system is structured.
Dr. Edwin Mercado raised the concern in an interview on DZRH News program Special on Saturday on June 13, saying the baseline for benefit payments has shifted dramatically—from ₱70 to ₱90 billion in previous years to nearly ₱200 billion and rising—and that policy makers, budget officials, and legislators must now respond accordingly.
“Sa mga subsequent years, iyon ang idinudulog namin sa budget, sa ating mga budget officers, officials, at sa ating mga legislators: hindi natin masusustena itong rate ng paglawig ng ating benepisyo kung hindi babaguhin ang perspective ng ating policy makers. Naiba na ang baseline,” Mercado said.
He said PhilHealth currently has sufficient funds for 2026, drawing on retained earnings accumulated during years when the agency’s management took a conservative stance and underspent on benefits relative to its collections.
Mercado said the agency’s board has since shifted direction, now targeting 85 to 90% of total annual collections to be used for benefit payments—a standard he said is more appropriate for a social health insurer—but that this rate of disbursement makes long-term sustainability increasingly dependent on policy support.
“Noong mga nakaraang taon, medyo conservative ang stance ng ating management at board. Pero ngayong nakaraang mga tatlong taon, medyo mas nakita ng ating board na dapat gamitin ang pondo instead na nakabinbin,” he added. “Dapat 85 to 90% ng total collection every year ay ginagamit for benefit payments.”
PhilHealth data shows that 35% of hospital admissions could have been prevented with timely primary care intervention, underscoring that a stronger preventive care system is not only a health imperative but also a financial one for the fund’s long-term viability.
Mercado also disclosed that PhilHealth granted an amnesty for claims denied during the COVID-19 period, allowing hospitals to refile those claims, which the agency is now paying out as part of efforts to clear longstanding liabilities and rebuild trust with providers.
He said all Filipinos remain covered under the Universal Health Care law regardless of premium contributions, with informal sector workers enrolled by the government under Republic Act 11223—a policy that has significantly expanded the pool of beneficiaries drawing on the fund.
A study by the Philippine Institute for Development Studies on centralizing health financing—which could strengthen PhilHealth’s strategic purchasing power—is expected to be released soon, Mercado said, and its recommendations may inform the policy changes the agency is calling for.
