Duterte economic team looking for universal health care fund sources

The Duterte administration’s economic team is looking for money to implement the universal health care (UHC) program, which key team leaders believed cannot be deferred as the state-run Philippine Health Insurance Corp. (PhilHealth) runs the risk of depleting its funds.

Finance Secretary Carlos G. Dominguez III on Wednesday (June 17) said the team is currently discussing with PhilHealth and the Department of Budget and Management “how to address funding challenges and ensure continued implementation of UHC.”

“The government is committed to UHC, particularly to ensure access of our most vulnerable groups to much-needed health care, especially during this difficult time,” Dominguez added, referring to the COVID-19 pandemic.

The Inquirer asked Dominguez what would be the possible immediate funding sources, but he did not reply as of late afternoon on Wednesday.

Acting Socioeconomic Planning Secretary Karl Kendrick Chua said he agreed with Dominguez’s position to continue UHC implementation while finding funding for it.

Assistant Budget Secretary Rolando Toledo said the department has yet to determine PhilHealth’s 2021 funding and the amount of subsidies it will receive from the national government in 2021.

In a report, the DBM said it released last April P48.2 billion to PhilHealth for payment of COVID-19-related health insurance premiums of senior citizens and indigent patients under the national health insurance program.

At the weekend, National Treasurer Rosalia de Leon said about P27 billion in subsidies were released to PhilHealth last week, making June the first month in 2020 that the agency received subsidy support from the national government.

Last May, Budget Secretary Wendel Avisado told senators that PhilHealth will get P71.3 billion in subsidies this year.

In 2019, PhilHealth received P72.7 billion or 36 percent of total subsidies, the biggest among all government-owned and/or -controlled corporations (GOCCs).

Since 2014, PhilHealth cornered the largest yearly subsidy among state-run corporations.

Toledo noted that the P4.335-trillion 2021 national budget to be submitted to Congress in July will give priority to COVID-19 response and health expenditures.

For 2021, Toledo said, the “expenditure direction” was “health systems improvement to strengthen the country’s capacity to address the COVID-19 pandemic.” This, he said, was in the National Economic and Development Authority’s (Neda) report titled “We Recover as One.”

Toledo said one of the “banner programs to be funded in the 2021 budget” was the purchase of vaccine against SARS Cov2, the coronavirus that causes COVID-19.

The DBM had ordered agencies to align programs and projects in next year’s national budget to the “new normal” brought forth by the pandemic.

While a portion of UHC funds were supposed to be from taxes from so-called “sin” products, like alcoholic drinks and cigarettes, collection from this source of revenue fell sharply as a result of COVID-19 lockdowns and bans which cut off the supply chain of these and other produce.

Last week, Dominguez said the government collected P11.9 billion in excise on tobacco and alcohol products in May, a 43-percent drop from P20.9 billion a year ago.

From January to May, the sin tax take declined 39 percent to P63.1 billion from P102.7 billion during the same five-month period in 2019.

The Department of Finance (DOF) earlier blamed the lower sin tax collection on these effects of enhanced community quarantine (ECQ ) imposed in Luzon and elsewhere to stop coronavirus transmission:

• Ban on sale and purchase of alcoholic drinks
• Reduction in domestic cigarette production
• Weaker demand for nonessential goods during the lockdown

The Cabinet-level Development Budget Coordination Committee (DBCC) had slashed this year’s target incremental revenues from new laws imposing higher excise tax rates on cigarettes, e-cigarettes and alcohol to P13.2 billion from P37.1 billion previously.

The 2021 and 2022 targets were also reduced to P28.1 billion and P31.7 billion from P46.9 billion and P53.3 billion.

It did not help that illicit cigarette trade flourished during the COVID-19 quarantine.

DOF and Bureau of Internal Revenue (BIR) officials had said they expected illicit trade to shoot up alongside higher cigarette taxes.

Edited by TSB