PhilHealth junks claims on bankruptcy

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PhilHealth President and CEO Alexander Padilla assures the capacity of the state-owned insurance company to meet their obligations to its 93-million strong members and stakeholders.

Metro Manila (CNN Philippines) — The Philippine Health Insurance Corporation (PhilHealth) on Thursday (March 10) disputed reports that it may go bankrupt in less than a year.

PhilHealth President and CEO Alexander Padilla, in a statement sent to CNN Philippines, maintained that their finances are "as robust, healthy, and substantial as ever."

Padilla said this is evident to their capacity to pay for the benefit claims of their 93-million strong members, given that the amount has been consistently growing over the last five years.

He claimed the state-owned company paid P34 billion in 2011; P44 billion in 2012; P55 billion in 2013; P77 billion in 2014; and P97 billion in 2015.

"At the same time, our reserve funds have been growing steadily too, from about P112 billion in 2012 to P128 billion in 2015," said Padilla.

"We are mandated to maintain a reserve fund level equivalent to two years so that we can readily address our members' needs should any eventuality happen."

'Nothing to worry about'

In a report published on the Philippines News Agency-Bicol on Wednesday (March 9), PhilHealth board member Eddie Dorotan claimed that the company is likely to "die" after 10 months, as its fund payout has ballooned, and became even larger than its member's monthly contributions and income.

Dorotan said PhilHeath lost "almost P1 billion" in 2015, as their payments of benefits to claimants reached P97 billion, while earnings that came from PhilHealth's share from the sin tax, members' contributions and income from its investments only amounted to P96 billion.

He also pointed out that premium payments to senior citizens and beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps) climbed the 10-billion peso mark.

The state-owned insurance company also spent a large chunk of its finances for the enrollment of five million indigent Filpinos.

However, Padilla allayed fears of its members and stakeholders, ensuring PhilHealth's capacity to meet their obligations.

"While we paid P1 billion more than what we collected in premium contributions in 2015, we gained about P7 billion from investment income, resulting in positive numbers still," said Padilla.

"[And] while other social protection programs maintain probably higher levels of reserve funds, we operate on a pay-as-you-go system where we immediately translate what we collect into benefit payments for our members."