By Kyle Aristophere T. Atienza again Kenneth Christiane L. Basilio, Journalists
PHILIPPINE President Ferdinand R. Marcos, Jr. On Monday he approved the initiative of the bicameral conference committee (bicam) to remove the government funding of the public health insurance under the proposed 2025 national budget, citing the organization’s reserves.
This comes as financial experts have warned that the organization’s financial situation is getting worse.
The Philippine Health Insurance Corporation (PhilHealth) “has a P500-billion reserve and the cost of providing their services in 1 year is less than P100 billion,” said Mr. Marcos told the press at the presidential palace.
“The reason why we don’t want to support (PhilHealth) [is] because the funding will just sit in the bank and not be used,” he said in mixed English and Filipino.
“So that’s a simple explanation there.”
Mr. Marcos said PhilHealth has been effective in providing services to its members, citing the increase in its services to cancer patients. “We cater to a lot of people.”
He said the problem of holding the organization’s “processing power” is low, which he said can be solved through “digital” efforts.
“They have enough money to keep going,” said Mr. Marcos, reiterating that the agency has no problem in providing insurance to its members.
The savings PhilHealth has also been identified by bicam members in reimbursing the government insurance money, but financial experts said. BusinessWorld On Sunday that these were subject to the necessary conditions for its projected loans over two years.
According to Section 11 of the Universal Health Care Act of 2019, PhilHealth’s total savings “shall not exceed the estimated cost of the proposed two-year plan.”
If the actual reserves exceed the required limit at the end of the financial year, the excess money “will be used to increase the benefits of the plan and reduce the amount of contributions of the members,” it added.
Responding to the first words of Mr. Marcos after PhilHealth’s bailout, University of the Philippines Finance and Banking Senior Lecturer Enrico P. Villanueva said: “It is sad that our government is not telling us the complete picture about PhilHealth.”
“It has become a cashless balance sheet with assets lower than liabilities,” he said in the X message, adding that PhilHealth members’ equity has already declined and is already negative.
PhilHealth may “continue” for a few years but “it cannot last long if the government refuses to pay the premium of non-paying members and transfer the burden of general health care to paying members,” said Mr. Villanueva.
“What the government is doing to PhilHealth is absurd.”
The Sin Tax Reform Act of 2012 and 2019 authorized the government to allocate 80% of revenue from tobacco products and sugary drinks to PhilHealth to fund the country’s universal health care system.
The reserve fund is not a savings or extra money that can be taken, said Mr. Villanueva.
“In the same way the Government Service and Insurance System (GSIS) and the Social Security System (SSS) should build pension reserves, PhilHealth should build reserves for future insurance liabilities,” he added.
He said PhilHealth, GSIS, and SSS all have poor reserves “due to mismanagement over the years where more benefits were promised without adequate funding and investment.”
“The international accounting standards that our government adopted required maintenance,” he said. “The government has a bad track record of going after the best insurance.”
The health insurer transferred P20 billion and P10 billion of its unused funds to the Bureau of the Treasury on May 10 and August 21, respectively, in accordance with a circular from the Department of Finance.
Another P30 billion was sent to the national treasury on October 16, while the final phase, which was scheduled for November, was put on hold as the transfer was challenged by civil society members and former government officials before the Supreme Court.
Health Secretary Teodoro J. Herbosa, who sits as chairman of the PhilHealth Board of Directors, said that if the President signs the budget approved by Congress, PhilHealth will still have more than P150-billion in its 2024 budget.
That would cover the funding of indirect members, who should be funded at P5,000 each, he said at the flag ceremony at the Department of Health on Monday.
If there are 16 million indirect members, he said PhilHealth has more than enough money in the P150-billion surplus to cover the estimated P80-billion subsidy next year.
Several senators, including Senate President Francis Joseph G. Escudero, criticized the organization for not using its money properly in the past.
Senate Finance Committee Chairwoman Mary Grace Llaanzares-Poe, who is also a bicam member, said in a statement Monday that “working with limited resources to support endless needs is not an easy task.”
“But what we have shows that careful decisions are made within the constraints we are facing,” he added. “We emphasize that the education sector is still a priority, as we have increased the budget for students and teachers.”
PROVISION OF A SANE BUDGET
Among the important issues that have plagued the national budget approved by Congress is the reduction of the budget of the agencies in the education sector, the Constitution of 1987 which said that it should have the largest share in the annual spending plan.
Mr. Marcos said the education sector’s quota is “against all our policy directives” for the development of STEM (science, technology, engineering, and mathematics), citing the P10-billion cut from the proposed computerization program of the Department of Education (science, technology, engineering, and mathematics ). DepEd) in 2025.
“We are on it to make sure that we will bring it back. I don’t want to oppose anything because that disturbs me,” he added. “We’re still talking about it and trying to find a way.”
“And I think we will still be able to do it, so we can do something,” he added, noting that they were working to adjust the DepEd’s budget of P12 billion.
When asked by BusinessWorld how his administration plans to adjust the education budget in the budget approved by Congress, Mr. Marcos said: “Let’s leave it to them. I don’t want to have that conversation here.”
“We will have that discussion with bicam and the leaders of both houses.”
The post-dictatorship constitution of 1987 gives the President the power to veto an item in an appropriations, revenue, or tax bill “but the veto shall not affect an item or items to which he does not object.”
Congress may override a veto by a two-thirds vote of all members of the House.
Experts previously said the line-veto may not end the budget cuts made by bicam members.
DepEd reported an obligation rate of 41.9% as of August, ranking 11th between government agencies regarding the use of the budget.
But DepEd was still higher than that of Congress, which had the lowest responsibility rate at 8.8%.
Education Secretary Juan Edgardo “Sonny” M. Angara has previously cut the budget, saying in an X post on Monday, “It looks like congress wants us to sink even more.”
CONSTITUTIONALLY NOISE
The budget bill approved by Congress is constitutionally sound, lawmakers said Monday amid concerns that the spending plan violates the 1987 Constitution by giving more funding to the Public Works Department than the state’s education sector.
Party-list lawyer Jude A. Acidre said the proposed P6.352-trillion national budget still prioritizes the education sector, in line with the constitutional provision that obligates the government to provide a “maximum budget” for the country’s school system.
“If you include all the statistics… of CHED (Higher Education Commission), SUCs (Public Universities and Colleges), TESDA (Technical Education and Skills Development Authority) and others, and if we include infrastructure projects related to the education sector. , our share of education is still important,” said Mr. Acidre, a member of the House of Representatives in the bicameral congressional committee of the budget bill, press conference.
“There is a law that says the importance of the budget is not equal to the highest budget,” he added.
The Supreme Court in 1991 ruled that lawmakers have the authority to grant higher dividends to other organizations in the “national interest.”
Last week, analysts raised the alarm saying that the proposed national budget for next year might violate the Constitution as it increased the funding of the Department of Public Works by 29.7% to P1.1 trillion from R825 billion, and reduced the total amount allocated to the education sector.
The budget for the education sector reached P912 billion, the Department of Education received R737 billion of the total. About P122 billion was allocated to SUCs, while P33.3 billion was allocated to CHED; while P20 billion was given to TESDA, according to a copy of the budget bill signed by the bicameral congressional committee.
“We can’t just summarize it for each agency. It doesn’t work like that. We must look at all the assignments provided by the education sector,” said Mr. Acidre in Filipino.
Zambales lawyer Jefferson F. Khonghun said that some of the money allocated to the Department of Public Works will be used for the construction of infrastructure needed by some government agencies.
“Many projects are included under the Department of Public Works [and Highways]like hospitals… and money for high school buildings,” he said in Filipino at the same time.
Ms. Poe reiterated that education is still a priority for the Marcos administration as they “increase the budget for students and teachers.”
In a separate statement on Monday, the congressional minority called on the leaders of the Senate and the House to reconvene their bicameral conference committee on the budget bill, citing “non-priorities” regarding the budget changes in the spending plan approved by Congress.
“We are asking the leadership of the House and Senate to address the growing public anger by immediately convening a bicameral congressional committee. The bicameral must restore the reduced budget for social services and remove all pork barrel allocations from infrastructure projects,” said a joint statement from the party’s list of representatives.
Lawmakers should hold the bicameral congressional committee open to the public to ensure full transparency in proceedings, they added.
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