PhilHealth’s Financial Position: a Descriptive Study based on Commission on Audit (COA) Annual Audit Reports from 1999 – 2010

Ramon Pedro P. Paterno1,2 and Marlene Mae R. Bermejo2

1Institute of Health Policy and Development Studies, National Institutes of Health,
University of the Philippines Manila
2Universal Health Care Study Group, National Institutes of Health,
University of the Philippines Manila


Background. PhilHealth, a government owned and controlled corporation which runs the country's social health insurance program, has given conflicting impressions of its financial position in various public forums. This study aims to describe the financial position of PhilHealth up to 2010 based on COA audit reports.

Methods. Financial statements from Commision on Audit (COA) Annual Audit Reports on PhilHealth from the years 1999-2010 were reviewed to describe PhilHealth's financial position.

Results. Up to 2010, based on COA audited reports, PhilHealth was financially solvent. Its net financial worth has steadily increased to P106.9B in 2010. PhilHealth's sources of revenues were mainly from premiums (82.7%) and interest income (17.0%). From 2007-2010, 88.5% of PhilHealth's premiums came from paying members. Premiums of the informal sector made up only 4.7% of toal premiums. Expenses were made up of benefit payments and administrative expenditures. PhilHealth exceeded its allowed administrative expenses for the years 2004, 2008 and 2009. PhilHealth's stated reserve fund has steadily increased and had rearched P90.7B in 2010. Several questions, outside of the scope of an analysis of the COA audit reports and involving reimbursements and adminstrative expenses need further investigation.

Conclusions and recommendations. At its level of purchasing up to 2010, PhilHealth was indeed sustainable. But as one of the three pillars of Kalusugan Pangkalahatan (KP), PhilHealth has to dramatically increase its share in the country's Total Health Expenditure. PhilHealth's financial position has to be continuously monitored as KP is being implemented.

Key Words: PhilHealth, Philippine National Health Insurance Program, Social Health Insurance, Commision on Audit