During its regular session on September 16, 2024, the Baguio City Council passed a resolution expressing strong opposition to the transfer of the P89.9 billion in surplus funds of Philhealth to the National Treasury. The resolution, moved by Councilor Betty Lourdes Tabanda, was unanimously approved by the council members.
The resolution has been transmitted to the City Mayor’s Office. Once signed by Mayor Benjamin Magalong, it will become the official stance of the City Government of Baguio on this issue.
The resolution states that transferring these funds will compromise the ability of PhilHealth to provide healthcare services especially to poor patients and that these funds could have been used to expand health benefits and improve access to quality healthcare for all Filipinos.
During the regular city council’s September 16 session, the legislators requested Philhealth- Cordillera Administrative Region(CAR) to clarify the matter.
Dr. Dominga Gadgad, Regional Vice-President of PhilHealth-CAR, told the city council that the transfer is legal and supported by the opinions of government agencies like the Commission on Audit (COA), Governance Commission for GOCCs (GCG), and the Office of the Government Corporate Counsel (OGCC).
Gadgad clarified that the transfer was done following a Department of Finance circular that mandates unused funds to be remitted to the Bureau of Treasury and that this procedure follows financial transparency requirements as per the General Appropriations Act (GAA) of 2024.
According to Gadgad, the surplus arose due to unused funds from contributions between 2021 and 2023 amounting to P239.1 billion while only P149.2 billion was spent on benefit terms. She said the COVID-19 pandemic had greatly contributed to this surplus since fewer people availed themselves of hospital services due to fear of COVID-19, thus significantly reducing benefit payouts during this period.
As of September 2024, PhilHealth has remitted P30 billion to the Bureau of Treasury in two tranches (P20 billion in May and P10 billion in August). The remaining balance will be transferred by May 2025 in scheduled payments.
Councilor Betty Lourdes Tabanda raised the concern that under the UHC Law, no portion of the reserve fund or its income should go to the national government’s general fund or any of its agencies. She questioned why PhilHealth is not opposing the circular mandating the transfer of the unused funds to the Bureau of Treasury given the legal provision. Gadgad clarified that the fund in question is an unused and unutilized fund, not a reserve fund.
Vice Mayor Faustino Olowan questioned why such a large sum is being transferred when it could be used for other health-related programs such as those under PhilHealth or even the Department of Health (DOH). He suggested that instead of transferring the funds, they could be allocated to projects that address the healthcare needs of citizens especially in light of the demand for health services.
Olowan expressed concern about the possibility of PhilHealth running out of funds in the event of a large-scale health crisis, such as another pandemic. He stressed the importance of having sufficient funds to cover such emergencies.
Gadgad said PhilHealth has a reserve fund composed of contributions from members as well as income from investments. She assured the city officials that the fund transfer will not impact PhilHealth’s ability to provide healthcare coverage. She explained that the funds being transferred come from excise tax collections on goods like tobacco and not from member contributions and that benefits will continue.
Regarding the petitions filed with the Supreme Court challenging the fund transfer, Gadgad said PhilHealth respects public concerns and will comply with any directives issued by the Supreme Court and the Congress.
She said there were initial discussions about using the funds to pay for the hazard pay of health workers during the COVID-19 pandemic, but the final decision was to remit the funds back to the National Treasury. She clarified that there are no specific details on how the P89.9 billion would be used once it is transferred.
Councilor Arthur Allad-iw underscored that PhilHealth funds should be used for their intended purposes, which is healthcare, and not to be invested or redirected to other projects. He asserted that diverting PhilHealth funds to other purposes constitutes “technical malversation.”
Philhealth’s expanded coverage, new services
Gadgad explained that enhancements are taking place including the increase in dialysis coverage, expanded case rates for illnesses like dengue and cancer, and additional outpatient services.
She also disclosed that PhilHealth plans to raise dialysis benefits to P6,200.00 three times a week and increase other case rates by 30%. Also, new packages for outpatient services, emergency treatments, and enhancements for conditions like heart disease, chemotherapy, and kidney transplants will be implemented before the end of this year, she added.
According to Gadgad, one future PhilHealth benefit is the introduction of PhilHealth Gamot which will cover medications during outpatient consultations. She said this is part of a shift from the Primary Care Provider Network (PCPN) to the Health Care Provider Network (HCPN) in 2025.
With regard to concerns about solo parents, Gadgad said they are not automatically covered under Republic Act No. 11223 (Universal Healthcare Act), but they can avail themselves of Philhealth’s Point of Service (POS) program in government hospitals if they are admitted without coverage. Solo parents who cannot afford premiums can also be enrolled in group enrollment programs supported by the city government, she further said.
With regard to the 45-day single confinement provision, she clarified that this will be removed, allowing for multiple hospital visits within the same year without affecting PhilHealth coverage.
Gadgad also mentioned that there is a pending bill seeking to reduce premium contributions from 5% to as low as 3.25 but it is still under review. **Jordan G. Habbiling
