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Philhealth’s capitation fund: yet another source of abuse?


Maggie De Pano Fellow

MANILA, Philippines—Of Philhealth’s total P26.4 billion premium contribution collection of as of November 2010, about 6 percent or P1.7 billion was sourced from sponsored programs by local government units (LGUs).

At present, the monthly premium contribution of fixed income-earning members is 2.5 per cent of their monthly salary base and shall not exceed P625. The contribution is equally divided between employee and employer.

Individually paying members are required to contribute P100 per month. In the case of LGU-paid programs, , the annual contribution is P1,000. Under a ten-year LGU (local government unit) sponsored program however, LGUs are to reduce subsidizing contribution gradually to as much as 50 per cent on the final year.

Under the Philhealth Capitation Fund, LGUs can enroll thousands of indigent residents to one year coverage.

Essentially, the scheme involved the LGU allotting a portion of its annual budget as subsidy to poor constituents for Philhealth coverage.

As incentive, Philhealth pays back the sponsoring LGUs P300 per enrolled family under the Philhealth Capitation Fund (PCF).

The PCF was aimed primarily at “ensuring that the quality of medical care delivered, even at the lowest rung of the health care delivery system, will be at par with the standards being set for other health care providers.”

So far, some 6,045,222 Filipinos were enrolled under this program. As of November 2010, Philhealth already paid a total of P5.34 billion in benefit payment under the sponsored program.

The 2009 financial statement and balance sheet of Philhealth however failed to specify how much PCF was paid to local government units under the program as fund disbursement was lumped into the total benefit payments.

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the scheme could one’s boost political stock, and it was no surprise that a number of LGUs has caught on the plan.

Some members of Congress even allot a certain amount of their Priority Development Assistance Fund to enroll their constituents.

When he was still a member of the House of Representatives, South Cotabato Gov. Arthur Pinggoy enrolled 23,000 of his constituents. His predecessor, former Gov. Daisy Fuentes, reportedly enrolled 16,000 under the sponsored program of Philhealth also last year.

For his part, Sarangani Gov. Miguel Rene Dominguez said the province paid P10 million in 2009 to enroll a total 39,485 residents. Last year, Sarangani paid P12,686,472.45 for the coverage of 30,000 residents.

In return, Philhealth released P3 million in 2009 and P5 million in 2010 as PCF payment to Sarangani province. This is exclusive of enrollees at the town levels. Sarangani has seven towns.

For the entire Central Mindanao (Region 12) a total 339,607 were enrolled under the sponsored program of Philhealth.

At P300 capitation fund per individual member enrolled under the program, Philhealth Region 12 should have released a staggering P101 million to various local government units. Region 12 covers the provinces of South Cotabato, Sarangani, Cotabato and Sultan Kudarat and the cities of General Santos, Koronadal, Cotabato, Tacurong and Kidapawan.

While most local chief executives have welcomed the capitation fund, fears of abuse in the use of the fund are also being raised.

A Philhealth insider said some town mayors have used the fund to hire casual employees outside the LGU health program.

Apparently, local chief executives treat the capitation fund as a discretionary fund.

Under the PCF guidelines, 20 percent of the capitation fund goes to administration cost, for which local executives have the sole discretion for its use and disbursement.

The rest goes to purchase of equipment and medicines.

Philhealth regional vice president Ramon Aristoza said that once the fund is released to the LGUs, they no longer have oversight functions over them.

“The LGUs are just required to furnish as report of the fund utilization,” Aristoza said

Questions as to how the 20 percent administration cost was being used have prompted Philhealth to issue an advisory in 2009 enumerating the use of the fund as stated.

Based on the advisory, 40 per cent shall accrue to physicians, 30 per cent to rural health units (RHUs) and the rest for the utilization of the Municipal Social Welfare and Development Officers (MSWDO).

The guidelines however do not deter perpetrators from tampering with the rules.

In 2007, the Commission on Audit office in General Santos ordered doctors hired by the city government to refund the professional fees which they claimed from Philhealth.

According to the COA report, payment of professional fees directly to the city doctors violated an existing city ordinance.

Apparently, the chief of hospital wrote a letter to Philhealth requesting that checks for the professional fee claims be issued directly to the names of attending physicians instead of issuing them in the name of the city hospital.

It was not clear how much was involved, but in

Region 12, which covered General Santos city, the Philhealth office paid a total of P475.9 million as benefit payments.

In its 2008 report, the Commission on Audit urged Philhealth to closely monitor the disposition of PCF. It also recommended that PCF utilization reports should be certified correct by local COA auditors.


[The article was produced under the Maggie de Pano Fund for Investigative Reporting on Health. The Fund, which is managed by Newsbreak, is funded through a grant from Macare Medicals, Inc.]


CATEGORY: Health, In-Depth, Investigations, Sectors
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  1. Well you know how that goes,once the fund goes to the hand of the local politician, we only hope and pray that the money for Juan goes to Juan but we also know the truth that it’s unlikely to happen, it takes a saint to make that happened, however no saints goes to politics. Think about it why they try to kill each other during election for the said position, nobody wants to kill just to be of service to people. Position in the govt means access to funds that came from ordinary Filipino who pays the taxes, it made them instant millionaires, you bet if you go to the community and check if people have Philhealth, i’m sure most of them have not heard about it nor understand what is Philhealth, so what the govt should do about it when their own people are the one that betrays it’s good intention to give back to what it’s people deserved?

  2. So whats the solution? If anyone is skeptical of everything…

    People say… Stop the corruption! But How? if most of the population believes in fairy tale… if most of the people votes for the actors and the famous because of their family history. If most politicians is scared of having a collision with the church because in the next election, the church might condemn them (as if they were God)

    Looks complicated…

  3. So what’s the solution? If anyone is skeptical of everything…

    People say… Stop the corruption! But How? if most of the population believes in fairy tale… if most of the people votes for the actors and the famous because of their family history. If most politicians is scared of having a collision with the church because in the next election, the church might condemn them (as if they were God)

    Looks complicated…

  4. Ben Serrano says:

    Not only source of abuse but let us check maybe some sort of corruption practices. There is also a need to take a second look of some Doctors making money out of Philhealth funds contributed from blood, sweat and tears of Filipinos

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