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MORE MONEY FOR HEALTH, BUT SERVICES FALL SHORT n
A comprehensive study may account for why Filipino families’ out-of-pocket spending for health remains high, despite UHC
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By John Eiron R. Francisco
OCAL governments are allocating more funds for health under the Universal Health Care (UHC) law, but a new study warns that bureaucratic bottlenecks, weak fiscal autonomy and misaligned priorities are preventing these budgets from translating into better services for communities. ment delays, poor absorptive capacity, and mismatched schedules. In smaller towns, per capita health spending was just P228 to P745 per person, nearly nine times lower than the national average for primary health care. Meanwhile, bigger LGUs with hospitals spend more due to PhilHealth inflows, but still face constraints in payments and utilization. “The biggest bottleneck is the process itself—timing, transparency and execution. Fixing these will make a bigger difference than just adding more funds,” Yap said.
Short of WHO benchmark
DESPITE per capita health spending rising to P8,658 in 2022 from P2,542 in 1991, the country still falls short of the World Health Organization’s benchmark of 5 percent of GDP. Out-of-pocket costs continue to climb, reaching P615.16 billion in 2024, up 11.8 percent from the previous year, while PhilHealth’s share of spending peaked at just 17 percent in 2019, well below its 30 percent target. “Kalahating trilyong piso mula mismo sa bulsa ng pamilyang Filipino [Half a trillion pesos from the pockets of Filipino families [is spent on health care], yet local government health spending continues to lag behind. Unless these gaps are addressed, universal health care will remain a promise: magandang pakinggan pero hindi dama ng karamihan [nice to hear but not felt by most],” Atty. Jose Maria A. Ochave, executive director of Unilab Foundation, noted. Yap said reforms like the Special Health Fund can improve the system, but only if fully utilized. “There are opportunities that could be lost if we don’t use the mechanisms that would improve the system,” she noted, speaking partly in Filipino. She stressed that “the future of UHC is local,” but warned that multiple funding streams—local revenues, NTA, DOH grants, PhilHealth reimbursements, and the Special Health Fund—have made financial management increasingly complex. To succeed, Yap said LGUs must strengthen public financial management across treasurers, budget teams, health officers, and local councils. Without this, inefficiencies will persist and the Philippines risks missing its health targets. “The constant refrain is always, ‘wala kaming pera [We don’t have money].’ I’m not saying that’s entirely untrue—there are indeed deficiencies. But I also think there is money that is either not being used or not properly planned and disbursed,” Yap
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Dr. Maria Eufemia C. Yap, Senior Research Fellow at the Ateneo Policy Center, pointed out that the 5-percent increase in local governments’ National Tax Allotment (NTA) for health is not being maximized as intended. “Ideally, the process should be: this is our target, this is our plan based on our needs, this is how much will be allocated, and this is how it will be spent. That’s where it falls short,” Yap told the BusinessMirror in an interview at the sidelines of the 2nd Universal Center for Health Policy (UCHP) Executive Symposium on Universal Health Care in Makati City. Yap explained that health is just one of many competing priorities for LGUs, and when plans within the sector are not aligned, execution becomes fragmented, creating “budget leakages” that blunt the impact of spending. The Ateneo study, Maximizing Local Government Fiscal Performance of the Health Budget, reviewed the entire budgeting cycle from 2022 to mid-2025, tracing how funds move from planning to actual payment. The research distinguished between money obligated and appropriated versus what was ultimately spent or reimbursed—revealing the gaps between paper allocations and actual services delivered. To illustrate this, the research team studied five “archetypes,” or typical LGU settings: • Odiongan, Romblon—a small, rural health unit-led system with tight referral pathways. • Quezon City—a cross-LGU hub serving both residents and non-residents, stressing the need for shared cost mechanisms. • Antique province—showing how provincial pooling of funds contrasts with municipal service delivery. • Belison, Antique—a town with working primary care but weak financial management, revealing gaps in procurement and accountability. • Isabela City, Basilan—outside BARMM but interacting with it, serving as a laboratory for intergovernmental coordination. The study found that heavy NTA dependence leaves municipalities vulnerable to cash flow delays, while misaligned planning schedules often turn health plans into “wish lists” rather than actionable budgets. PhilHealth reimbursements and DOH grants provide support, especially for provinces and cities with hospitals, but these are not always reflected in LGU planning. More critically, Yap emphasized that the main issue is not the amount of money, but the slow movement of funds due to procure-
said. “What matters now is turning allocations into real, tangible outcomes for communities.”
DBM reports on health spending
MEANWHILE, the Department of Budget and Management (DBM) reported that the proposed 2025 national budget has been set at P6.326 trillion, equivalent to 22 percent of the country’s gross domestic product (GDP) and 9.7 percent higher than this year’s appropriation. DBM Undersecretary Margaux Marie V. Salcedo, speaking on behalf of Secretary Amenah F. Pangandaman, said the Department of Health (DOH) and its attached agencies—including the National Nutrition Council and the Philippine National AIDS Council—will receive P253.36 billion under the proposed spending plan. “The budget of the DOH has consistently increased annually since 2022. This upward trend reflects lessons from the pandemic and the government’s resolve to meet the growing needs of our healthcare system,” Salcedo said. She added that allocations are aligned with the Philippine Development Plan 2023–2028, aiming to secure sustainable and equitably
distributed health infrastructure and human resources. Significant portions of the DOH budget are designated for hospital operations, with Metro Manila hospitals receiving P23.06 billion and regional hospitals and facilities, P78.9 billion. The funding also supports Bagong Urgent Care and Ambulatory Service (BUCAS) centers, free essential medicines, and basic health services to help reduce out-of-pocket expenses. The Health Facilities Enhancement Program receives P35.37 billion for the construction, rehabilitation, and upgrading of government healthcare facilities, including equipment and medical transport services. An additional P500 million is earmarked for the Quick Response Fund, ensuring immediate post-disaster rehabilitation of facilities and equipment. Local health systems are prioritized through the Local Health System Support Program, allocated P74.4 billion. The Human Resources for Health and Institutional Capacity Management (HRHICM) Program has seen a 74.6-percent increase to P463 million, providing training and scholarships for healthcare professionals in LGUs.
The National Health Workforce Support System is allocated P17.97 billion to retain healthcare workers in the country. Salcedo highlighted that PhilHealth continues to provide benefits to all members despite not receiving government subsidies this year. Coverage for the top 10 most burdensome diseases has expanded, and case rates for 9,000 packages increased by 50 percent. She added that the Zero-Balance Billing Policy ensures free hospitalization for basic accommodation in select DOH-run hospitals, supported by P41.6 billion under the Medical Assistance to Indigent and Financially Incapacitated Patients Program. The proposed 2026 national budget, currently under deliberation, totals P6.793 trillion, with the DOH allocation increasing to P260.57 billion. “This has yet to be approved by Congress, but we hope Congress will support our goal of strengthening the healthcare sector so that every Filipino can access hospitals, doctors, consultants, and free medicines,” Salcedo said. “The national government is doing its best to make quality healthcare inclusive, equitable, and
affordable for all Filipinos,” she added. However, she stressed that LGUs must also play an active role in advancing this mission through strategic planning, fund mobilization, and collaborative partnerships. Salcedo outlined key steps for LGUs to optimize their contribution to national health spending: 1. Align local plans with the National Health Expenditure Program to access complementary funds and maximize resources. 2. Leverage the Special Health Fund by pooling DOH transfers, PhilHealth payments, and local appropriations to create a more resilient and responsive local health financing system. 3. Forge strategic partnerships with the DOH through memoranda of agreement to implement programs such as the Health Facilities Enhancement Program, Human Resources for Health deployment, and Patient Assistance Programs. She added that while these measures lay the foundation for a stronger health system, turning plans into lasting change requires evidence-based reforms and collaborative efforts. Continued on A2
PESO EXCHANGE RATES n US 57.2110 n JAPAN 0.3855 n UK 76.8630 n HK 7.3336 n CHINA 8.0126 n SINGAPORE 44.3634 n AUSTRALIA 37.2730 n EU 66.6508 n KOREA 0.0411 n SAUDI ARABIA 15.2494 Source: BSP (September 5, 2025)