10 facts about PhilHealth funds and service differentiation

Let me start with these quotes from different stakeholders on the subject, in chronological order.

1. Executive Secretary Ralph G. Recto, interview with DZRH, June 19, 2026:

“Naiintindihan ko ang reklamo ng ating mga kababayan sa PhilHealth. Halimbawa, kung ikaw ay empleyado at nagbabayad ng mahigit P30,000 hanggang P60,000 maximum contribution kada taon, P300 billion kada taon ang pondo na ginagastos ng PhilHealth. Kapag nagkasakit ang 10 milyon, samakatuwid ay P30,000 ang support value niyan.

“So kung nagbayad ka (paying member) ng P50,000 to P60,000, ang indigent ay libre. Walang bayad. On the average, P30,000 dapat ang bayad, pero indigent ka, wala kang binayaran. So panalo ka. Kaya alam ko, ’yung mga nagbabayad, dapat taasan natin ang PhilHealth benefits.

(“I understand the complaints of our fellow Filipinos about PhilHealth. For example, if you are an employee paying the maximum annual contribution of more than P30,000 to P60,000, PhilHealth spends about P300 billion a year. If 10 million members get sick, that works out to a support value of about P30,000 per member.

“So if you are a paying member contributing P50,000 to P60,000, while an indigent member pays nothing because coverage is free, the average support should still be about P30,000. If you’re indigent, you didn’t contribute anything, so you come out ahead. That’s why I understand why paying members feel that way. We should increase PhilHealth benefits for those who are paying contributions.”)

2. Action for Economic Reforms (AER) Facebook post, June 30, 2026:

“AER resists Executive Secretary Ralph Recto’s destruction of universal healthcare (UHC)… As Finance secretary, Recto was instrumental in the siphoning of P89.9 billion in PhilHealth funds to finance other government projects that could otherwise be funded by the Department of Health budget… the discrimination in benefits… Recto’s words divide the nation by creating a system that favors those that pay over vulnerable sectors.

“If the executive secretary genuinely wants to raise benefits for direct contributors, the solution is to stop the consistent defunding of PhilHealth and increase PhilHealth benefits for all.”

3. Joey Sarte Salceda, “On UHC: To be fair to Executive Secretary Ralph Recto” Substack post, July 1, 2026:

“Recto’s argument speaks to a real grievance. A worker who pays P50,000 or P60,000 in annual premiums has a legitimate expectation that PhilHealth will give better protection against hospitalization, cancer, dialysis, heart disease and other catastrophic costs. That worker is not being selfish.

“The better answer is not to attack Recto as anti-UHC. The better answer is to require government and PhilHealth to do their respective jobs.”

4. Healthcare Professionals Alliance Against COVID-19, “Open letter of healthcare leaders to Executive Secretary Ralph G. Recto against unequal PhilHealth benefits,” Facebook post, July 2, 2026:

“We understand that many working Filipinos feel they are not receiving enough benefits in return for the premiums they pay. This is not because indigent patients receive too much, or to use your own words, “Panalo sila.” This is because government is failing to shoulder its lawful share in financing the premiums of the poor. As a result, direct contributors end up paying for a larger share of the country’s healthcare than the law intended…

“The solution is clear — government must stop diverting PhilHealth funds, and it must stop underfunding PhilHealth. If government fulfills its obligations under the Universal Health Care Act, PhilHealth can strengthen benefits for every Filipino, rather than just a few.”

5. Men Sta. Ana, “Walang iwanan: A rejoinder to Secretary Salceda on Universal Health Care,” BusinessWorld, July 6, 2026:

“A firestorm of protest has met Executive Secretary Ralph Recto’s declaration to expand Philippine Health Insurance Corp. (PhilHealth) benefits for direct contributors, but exclude the indirect contributors who comprise the majority…

“Thus, in expanding the benefits — and we reiterate, expanded benefits for all — the government must stop defunding PhilHealth and it must depoliticize PhilHealth benefits. As a corollary, the government must increase multifold the PhilHealth budget to ensure that it can deliver the core benefits, and increase benefits, to all members.”

Here are 10 facts and numbers about the issue.

First, health — like education, housing, food, vacation, etc. — is primarily a personal and parental responsibility, secondarily as a government responsibility. The government’s primary function is to protect the people’s right to life, private property and liberty.

Second, public health spending is actually rising and not declining. Public health expenditures go beyond the PhilHealth budget. Many agencies and entities have big health spending led by the Department of Health (DoH), other agencies that have their own hospitals and clinics taken from their respective budgets, like UP’s Philippine General Hospital (PGH), other state universities’ hospitals, LGU hospitals (Manila City alone has six city-owned and -funded hospitals), AFP and PNP hospitals, etc. Plus health spending by government corporations like PAGCOR and PCSO.

Third, out-of-pocket payments (OOP) as a share of household consumption are rising, from 2.7% in 2014 to 3.3% in 2025 but this is low compared with disinformation claims that it has reached 5%, even 10% (see table).

Fourth, the rise in OOP share is due to people spending more on noninfectious or noncommunicable diseases (NCD). The share of spending for NCDs increased from 34% of CHE in 2014 to 50% in 2025. The share of spending for infectious or communicable diseases declined from 24% of CHE in 2014 to only 12% in 2025.

Fifth, a big part of PhilHealth funds does not come from income tax or VAT, but taxes from smokers, vapers, drinkers and gamblers. When people say that the indigents and seniors are “indirect contributors” to PhilHealth, they are implying that the indigents and seniors are drinkers, smokers, vapers of legal tobacco and alcohol and do not patronize illicit and smuggled products that do not pay sin tax.

Sixth, many direct contributors of PhilHealth pay twice to sustain public health. First as taxpayers who help fund DoH, UP-PGH, LGUs, AF- PNP hospitals, etc. Second, as smokers and drinkers of legal products whose sin tax payments help sustain PhilHealth operations. Thus, these twice-taxed people should enjoy more health benefits from the government.

Seventh, people who want a higher PhilHealth budget are implying that the government should tolerate more smoking and drinking of legal products that pay tens of billions of pesos yearly in sin taxes that fund PhilHealth.

Eighth, the P60 billion of PhilHealth excess funds that were remitted back to the National Treasury in 2024 has been returned 100% by the Treasury back to PhilHealth on April 23, 2026. Claims by petitioners before the Office of the Ombudsman that Recto committed plunder are merely emotionalism and disinformation.

Ninth, giving higher benefits to direct PhilHealth contributors compared with noncontributors is not “destruction” of UHC or “exclusion” of noncontributors. It is service differentiation and segmentation among different contributors of public health. The terms “destruction” and “exclusion” are disinformation.

Tenth, Executive Secretary Ralph Recto is correct in his assertion that direct contributors of PhilHealth should receive more benefits than noncontributors. The indigents and seniors who pay zero to PhilHealth can still claim health service from the state via limited coverage from PhilHealth plus services from DoH, UP-PGH, LGU hospitals, etc.

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

minimalgovernment@gmail.com