Press Release
August 27, 2016

Using P40 B gaming income is good Rx to boost anemic gov't
budget for meds

Earmarking all state gambling income for the purchase of medicines "is the shot in the arm" that will boost anemic government purchases of essential drugs, Senate Minority Leader Ralph Recto said.

Recto said about P40 billion in Philippine Charity Sweepstakes Office (PCSO) and Philippine Amusement and Gaming Corporation (PAGCOR) income next year could be added to the Department of Health's (DOH) allocation for medicines of P16.4 billion, raising its 2017 budget for drugs purchases to almost P57 billion.

"If this happens, then it is as if the DOH has won the lottery. Using gaming income for medicines, however you look at it, is a winning combination," Recto said.

The net effect is that DOH will be getting an additional P110 million a day to buy drugs, the senator said. "This is a good prescription from Digong."

Recto said PAGCOR's forecast income for 2016 is P45.4 billion, less P14.7 billion in operating expenses, or a net income before tax of about P30 billion.

"If this is the formula used in computing what will be remitted to the DOH, then it is a sizeable amount," Recto said.

To be added to this is the PCSO Charity Fund, representing 30 percent of its gross revenue. This reached P9.6 billion, on total sales of P37.4 billion last year.

"So combined, that's easily P40 billion in additional money for health," Recto said. "This will bump up the gross DOH budget to P181.6 billion next year."

Under the 2017 national budget, the DOH is proposed to receive P90.9 billion plus P50.2 billion for the payment of PhilHealth premiums to cover poor families and senior citizens, and P500 million for calamity aid.

If part of the "gambling dividends" will be distributed to local government-run hospitals, "then it doesn't matter, because we are merely diversifying the conduits; the beneficiaries--the people--remain the same," Recto said.

Local government-run hospitals number 777 nationwide, ten times more than the 71 DOH-run facilities.

If, as President Duterte had proposed, the PCSO and PAGCOR income will be used to stock up Botika ng Barangay outlets, whose network will have to be expanded after many have been shuttered during the Aquino administration, "then the people win also," Recto said.

The senator recommended that these botikas and the 3,074 town and city health centers officially known as Rural Health Units (RHUs), be tapped as frontline dispensaries of needed medicines.

"Clearly, there are multiple delivery platforms that can be used," Recto said.

Whatever the means, the important thing is the fast procurement and distribution of medicines, the lawmaker stressed.

In 2014, the DOH budget for drugs and medical supplies was P10.2 billion, but a Commission on Audit report revealed that total DOH direct spending for said items only reached P4.3 billion that year.

Recto said tapping PCSO and PAGCOR funds for medicines will narrow the "huge government deficit in cancer drug spending."

"One in every 10 deaths in the country is due to cancer. Chemotherapy per session is in the six figures, more than the annual income of a poor household. 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.

Recto said PAGCOR's charter, Presidential Decree 1869 as amended by Republic Act 9847, will have to be revised if its revenues with be rechanneled to health.

"The amendments must be done with utmost consideration of other national programs PAGCOR is funding such as sports, culture and arts, and early childhood care," Recto said.

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