MANILA, Philippines – If the country’s health insurance program relies on “political negotiation,” does that mean that the programs of the Philippine Health Insurance Corporation (PhilHealth) depend on the political will of the country’s leaders?
Supreme Court Associate Justice Amy Lazaro-Javier sought a clarification on a statement made by Government Corporate Counsel Solomon Hermosura last month, on how “it is settled… that a social health insurance is a matter of political negotiation.”
Hermosura gave that statement came during a discussion on how the state insurer sets its reserve funds. A reserve fund is like its emergency fund to cover projected expenses such as benefits for the next two years.
“This is the first time I’ve heard of this,” Javier said on Tuesday, March 4, during the third oral arguments on the PhilHealth fund transfer back to the National Treasury.
“I’ve always believed that health is non-negotiable. Can you please respond if it is settled in jurisprudence or law that health insurance is a matter of political negotiation?”
Hermosura explained that under the Universal Healthcare (UHC) Act, PhilHealth can tap Congress for supplemental funding to meet targets under the law. He also noted that the executive may also allocate resources if needed.
“Your Honors, that is a political process. It’s a decision on resource allocation and prioritization of societal needs, which are the outcomes of negotiations among government, civil society, and other stakeholders,” he told the Court.
While Hermosura said that there is no jurisprudence that formalizes the need for political will, he said “one administration can do better than others.”
He noted that PhilHealth’s corporate operating budget increase by 25% in the last six years and under the Marcos administration, this budget went up by 41% to P284 billion in 2025 from P168 billion in 2022.
A non-negotiable
However, Javier also pointed out that under the UHC law, the funding requirements of PhilHealth would already be specified.
Section 37 of the UHC law discusses the funding sources for PhilHealth’s budgetary requirements. Aside from premium contributions, this includes sin tax collections, 50% of the income of the Philippine Gaming Corporation at the end of every quarter, the charity fund, annual appropriations from the Department of Health, and a subsidy from the national government.
“It should be indicated in the GAA (General Appropriations Act) because by then, the amounts would have been certain already,” Javier said.
On February 4, Javier asked Hermosura what factors the PhilHealth board considers when setting the amount for its reserve funds. Reserve funds are sourced from the state insurer’s accumulated revenues from the year prior.
“If I were in the PhilHealth board, I would not set a high reserve fund if I am confident that I can get political support for a bigger subsidy for PhilHealth,” Hermosura said on the first day of oral arguments.
“Because there is no limit to the subsidy that government can provide to PhilHealth, your honor. And if I may also mention, the liabilities of PhilHealth are guaranteed by the Republic of the Philippines.”
Javier further urged Hermosura to elaborate on his statements on Tuesday: “From your statement last time, that the higher the amount of subsidy you expect from the government through the so-called political negotiation, the lesser the amount of reserve funds you will earmark coming from the accumulated assets of PhilHealth. Is that correct?”
However, the government counsel said he failed to recall the statement despite it being reread during the session. “But I know the practice of PhilHealth, your honor, has been to set the reserve fund equal to or lower than the ceiling.”
Meanwhile, former finance undersecretary Cielo Magno pointed out that relying on sovereign guarantee — or the certainty that government will assume an agency’s liabilities — is a “very irresponsible” way of thinking.
“Dapat ang mga GOCCs (government-owned and controlled corporations) natin ngayon, ini-encourage natin maging financially responsible at hindi nagre-rely sa pag-rescue ng government nila lalo na kung nagkakaroon ng financial mismanagement,” she told reporters before the oral arguments on Tuesday.
(We should encourage today’s GOCCs to be financially responsible and not rely on the government to rescue them especially in cases where there is financial mismanagement.) – Rappler.com