Press Release
July 23, 2016

Use PCSO income to boost anemic gov't drug spending
of 70 centavos per Pinoy daily

Latest government figures show that government drug purchases translate to P73 per capita annually, underscoring the need for the state lottery income to augment the state's measly medicine budget.

"It comes up to 20 centavos per Filipino a day," Senator Ralph Recto said in portraying "the huge drugs and medicine deficit" in public hospitals and clinics and how the earmarking of all of Philippine Charity and Sweepstakes Office (PCSO) income can ease the chronic shortages in government pharmacies.

Recto said that based on data culled from Commission on Audit (COA) reports, total "drugs and medicines expenses" of the government reached P7.44 billion in 2014.

Of this amount, P2.40 billion was spent by the national government, while local governments accounted for P5.04 billion.

But the amount credited to the national government included P189 million for medicines in police hospitals and in jails run by the Bureau of Jail Management and Penology (BJMP), P761,000 by inmates in Department of Justice (DOJ)-run prisons, and P481 million for military hospitals.

"Kaya kung tutuusin, mas maliit pa ang ginasta ng national government," Recto said.

Recto cited the level of government's "low pharmaceutical spending" to again argue for "remedial legislation" which would dedicate PCSO income for health.

This becomes more urgent, he said, in the wake of the Supreme Court's dismissal of the charges against former President Arroyo for illegally diverting PCSO funds.

"The lesson here is that we should rationalize and depoliticize the use of PCSO income by assigning it to the Department of Health (DOH) for the purchase of medicine, improvement of hospitals and attainment of universal health care," Recto said.

Recto has filed four bills seeking to earmark the PCSO's Charity Fund into a health fund to be managed by the DOH.

"The idea is to transform the Charity Fund from a discretionary fund into a fund with a fixed beneficiary. If it is permanently consigned for a set of activities, then the temptation to tap it for other purposes, no matter how worthy, will be gone," Recto said.

Under the law governing the PCSO, 55 percent of its gross income is set aside for prizes, 15 percent for operations, and 30 percent for the Charity Fund.

In 2015, the latter reached P9.6 billion.

Presently, any disbursements from the Charity Fund must not only be authorized by the PCSO Board of Directors but must also be approved by the Office of the President, Recto explained.

While the Charity Fund "has indeed helped millions of Filipinos," accessing it, Recto said, "requires the sick to queue for assistance in many PCSO offices."

"PCSO becomes some sort of a medical panel, performing a kind of 'triage' which assigns how much help will be given to an applicant," said Recto.

This work, he said, "is best left to hospitals which can equitably allocate the resources based on merit and sans palakasan."

Recto said the PCSO charter and other laws give Malacañang "wide latitude" in funding other activities. "The task before us is to depopulate PCSO of its many mandates and go back to the basics - which is to help the sick, the needy and the poor."

Recto said the "PCSO empire" grosses P100 million a day. The agency reported gross receipts of P37.4 billion last year.

Of this, almost P30 billion came from lotto; Small Town Lottery contributed P4.3 billion; "Keno" added P3.4 billion. Traditional sweepstakes chipped in a measly P57 million.

Thirty percent of PCSO's gross receipts constituted its 2015 Charity Fund of P9.6 billion. "However, total payout from this fund reached P15.3 billion last year as there were other recipient agencies," Recto explained.

In Recto's proposal, "mandatory contributions authorized by law" will be retained, "so agencies that rely on PCSO assistance can continue with the good work they are doing."

"But there is also the possibility that, during the legislative debates, the number of agencies with entitlement will be pruned, given President Duterte's earlier announcement that he wants all PCSO fund spent for health," Recto said.

If such would be the consensus, Recto said he will bat for a large chunk of PCSO funds to be used to help cancer victims.

"One in every ten registered deaths in the country is attributable to cancer. Sixteen percent of the total of 50,000 reported cases of breast cancer in 2010 resulted in death. Twelve Filipino women die of cervical cancer each day with 6,000 new cases being diagnosed each year," Recto said.

"Chemotherapy per session is in the six figures. Equivalent to the annual income of the poor. Yet PhilHealth can only extend help to a few," Recto said.

In Senate Bill 60, Recto wants the PCSO Charity Fund earmarked for universal healthcare and improvement of PhilHealth's benefit packages while the other bills propose that these be used to upgrade public hospitals.

In a separate measure, Recto defined the new regime in utilizing PCSO's Charity Fund while respecting the existing revenue share of LGUs and other government agencies.

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