With P110B in retained earnings, PhilHealth not ready to go bankrupt

Sen. Ralph G. Recto yesterday took to task the management of the Philippine Health Insurance Corp. (PhilHealth) for feeding disinformation that it would go bankrupt if its retained earnings would be allocated to addressing the healthcare infrastructure shortage in the country.

"With retained earnings of P110 billion, there's no way that PhilHealth will fall to the ground as professed by the treasury department of the agency," Recto, Senate ways and means chair, said. "Malaking kalokohan 'yan na malulugi sila," he added.

The senator stressed PhilHealth is even about to commit a great disservice by increasing the premiums paid by members while clutching eagle-like to its "retained earnings."

"They will increase the members' contributions when they have more than enough funds to expand coverage and subsidize low-income poor workers," he added.

Recto said PhilHealth could even keep its closely guarded retained earnings and not allocate it to plug the deficit in healthcare infrastructure as long the funds would be used to increase the benefits of members.

"You can't be instantly charitable (to the poor members) when you don't want to open your retained earnings for a noble purpose - like reducing the shortage in healthcare infrastructure like barangay clinics and hospitals, which would benefit a great deal of people," he said.

PhilHealth Senior Treasury Manager Evangeline Racelis had told a previous Senate hearing that the agency would practically burn to the ground if the proposed measure of Recto is enacted into law.

Recto's bill, Senate Bill 2653, seeks to earmark one-half of PhilHealth's retained earnings or reserve funds to the health department's Health Facilities Enhancement Program (HFEP).

In this year's national budget, the DOH's funding for HFEP is only at P7.143 billion, but it said it needs more or less double or triple the amount to wipe out the backlog.

HFEP primarily aims to enhance the capacity of primary healthcare facilities such as barangay health stations, rural health centers and government hospitals, which is at the frontlines of the public healthcare system.

Recto said it was no less than the top officials of PhilHealth who claimed that the state agency has retained earnings of about P110 billion during previous budget hearings in the Senate.

"It is time to tap these funds and put them to better use. The DOH and PhilHealth should complement each other in improving the delivery of healthcare services to the people," he said. As of June 2010, PhilHealth has a total of 21.65 million registered members, the bulk of which comes from the private sector (7.41 million).

Their contributions range from P50 for those receiving P4,999.99 and below and as much as P375 for those receiving P 30,000 and above. The contributions will be increased to 3.5 percent of the members' salaries from the current 2.5 percent as proposed by the DOH.