Supreme Court (SC) Associate Justice Amy Lazaro-Javier revealed that the Philippine Health Insurance Corp. is said to be "bankrupt". (PhilHealth) based on the report of the Commission on Audit (COA). In oral arguments related to PhilHealth's controversial P89.9 billion fund transfer, Lazaro-Javier emphasized the agency's non-compliance with Section 11 of the Universal Health Care (UHC) Act. The law states that the expansion of benefits and reduction of members' contributions must be prioritized before investing with surplus reserve funds. However, PhilHealth reportedly prioritizes investments over improving services.
According to Deputy Treasurer Eduardo Anthony Mariño III, the accumulated income of PhilHealth in 2023 has reached P464.29 billion, which has been invested. But Lazaro-Javier countered this by saying that PhilHealth's reserve fund is lower compared to its actuarial estimates from 2021 to 2023. He also quoted the COA report showing that PhilHealth's ability to continue as a "going concern" is in jeopardy if its unfunded liabilities are not met. Because of this, he criticized the wrong priority of the agency in using the fund.
Although Finance Secretary Ralph Recto denied that PhilHealth is bankrupt, he admitted that Insurance Contract Liabilities (ICL) was the main issue in the COA report. The ICL refers to PhilHealth's obligations for future bills, resulting in a huge capital deficit that reached P1.128 trillion by December 2023. Despite this, the Solicitor General declared it legal to transfer PhilHealth's surplus funds to the National Treasury as a temporary solution to fund important government programs.
Meanwhile, President Marcos Jr. linked the resignation of Emmanuel Ledesma Jr., former head of PhilHealth, due to the difficulty of transitioning from the private sector to public service. He was replaced by Edwin Mercado, an expert in health care and hospital management. The new leadership is expected to focus more on improving services despite the issues facing the agency.
According to PhilHealth data in 2024, pneumonia was the top condition reimbursed by the agency, which reached P11.9 billion from 648,355 claims. This is followed by dengue fever, acute gastroenteritis, and other diseases such as stroke and anemia. Despite these services, it remains a challenge for PhilHealth to restore public trust while dealing with financial and funding system issues.
