PhilHealth not going bankrupt, says Palace

MANILA, Philippines – Malacañang said yesterday the state-owned Philippine Health Insurance Corp. (PhilHealth) is far from facing bankruptcy or any financial trouble in the next few years.

In a press briefing, Budget and Management Secretary Rolando Andaya Jr. and PhilHealth senior vice president Melinda Mercado said there is no truth to reports that PhilHealth could face bankruptcy by 2016 because of the government’s supposed failure to pay the premiums for its employees amounting to P19.2 billion since 2001.

Andaya said there is no such figure and the discrepancies of P9 billion reportedly being claimed by PhilHealth were already being discussed.

Andaya explained that the arrears only came about because of the resolutions unilaterally passed by the PhilHealth board hiking the rates to be paid in the course of the fiscal year.

He stressed that the amounts to be paid to PhilHealth are contained in the General Appropriations Act or the national budget every year, which means that any rate increase implemented by PhilHealth during the year cannot be collected from the national government since there is already an appropriation for it.

“We must remember that the funds for PhilHealth are sourced from the funds approved by Congress. So it is not technically correct to say that this is how much DBM owes and should be paid to PhilHealth. This goes through Congress and must be approved by Congress,” Andaya said.

Mercado, for her part, noted that the representative of PhilHealth during last Wednesday’s Senate hearing presented projections based on various scenarios.

She stressed that PhilHealth has always been able to pay the benefits of its members.

To highlight the financial health of the agency, Andaya noted that PhilHealth recorded a net income of P10 billion for 2008 alone, compared to only P5 billion in 2001.

He added that the firm has a reserve fund of P63 billion to meet PhilHealth requirements.

“If it is true that PHIC is losing money, then why is it that its net income doubled from P5 billion to P10 billion? Does this reflect a company that is losing money? I don’t think so,” Andaya said.

Mercado said the agency has an “investment portfolio” of some P91 billion as of July 31, and “can very well provide for the hospitalization benefits of PhilHealth members from the different categories.”

“PhilHealth remains solid and is poised to remain so in the years to come,” a PhilHealth statement said.

In a Senate hearing, PhilHealth vice president for actuary Nerissa Santiago said the agency might go bankrupt by 2016 if it would not be able to settle its P19.2-billion debt.

Santiago claimed that since the contribution rate of members is not increased and with the projected membership for the decade, the “life of the fund” of PhilHealth might last beyond 2016. – Marvin Sy, Sheila Crisostomo, Philippine Star