The Philippine Health Insurance Corp. (PhilHealth) will operate on a P284 billion budget in 2025, despite receiving no government subsidy. This decision follows Congress’s approval of a zero-subsidy budget for the state insurer.
PhilHealth’s board of directors has increased the corporate operating budget by nearly 10% from the 2024 budget of P259 billion. The Department of Health (DOH) explained that this budget is PhilHealth’s version of the General Appropriations Act (GAA), funded through member premium contributions, interests, and other revenue sources.
The DOH stated that the P284 billion budget already accounts for the lack of government premium subsidy for indirect contributors. This budget also includes the national government’s subsidy for indigents, senior citizens, and persons with disabilities, typically allocated by Congress for PhilHealth’s Point of Service program and the expansion of benefit packages under the Universal Healthcare Law.
The bicameral conference committee decided against granting PhilHealth any government subsidy, citing the insurer’s existing reserves of around P500 billion as sufficient for its operations. President Ferdinand “Bongbong” Marcos Jr. supported this decision, emphasizing the adequacy of PhilHealth’s reserves.
However, some lawmakers and health and finance experts have criticized the zero-subsidy decision. They argue it could lead to increased premium contributions and reduced benefits. Rep. Arlene Brosas of the Gabriela Women’s Party expressed concern that without government support, the burden would fall entirely on direct contributors, leaving millions of indirect contributors vulnerable.
As of October 31, PhilHealth reported 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. Health Secretary Teodoro Herbosa attributed this surplus to underspending on benefits, resulting in high out-of-pocket expenses for Filipino families.
PhilHealth assured the public that all benefits would continue to be paid and even improve. Most of the P284 billion budget for 2025, specifically P271 billion, will cover benefit claims and approved increases in case rates, about 11% higher than the 2024 allocation. The budget will fund various benefit expenses, including Z benefits, PhilHealth Konsulta, hemodialysis sessions, emergency care, outpatient mental health, severe acute malnutrition, and other standalone outpatient packages.
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, the DOH noted that PhilHealth’s board extended the validity of the P989 billion 2024 ICT budget to prioritize digitalization, as only 8% of it was spent this year.
Additionally, the board approved a 50% increase in selected case rates, on top of benefits for emergency care, glasses and optometric services for children, open heart surgery, and pediatric cataract extractions. Health Secretary Herbosa explained that the board recognized the need for PhilHealth to spend more to reduce out-of-pocket expenses for families.
While President Marcos may still veto the 2025 GAA to allocate a government subsidy for PhilHealth, his recent stance suggests this is unlikely.