Philippine health spending still lags in ASEAN – PIDS

MANILA, Philippines — The Philippine government should set aside more resources for health as the country’s current spending is still low compared to regional peers and in order to improve labor productivity, according to a study of the Philippine Institute for Development Studies (PIDS).

In the state think tank’s discussion paper titled Public Health and Labor Policy, PIDS said while the country’s public health spending per capita improved to $60 in 2019 from $32 in 2010, it remains low compared to other countries in the Southeast Asian region.

PIDS said Thailand and Malaysia spent four times more than the Philippines in 2019.

The report also said the country’s public health spending, which accounts for about 1.5 percent of gross domestic product (GDP), is significantly lower than that of Thailand, Vietnam, Singapore and Malaysia.

Despite the share of public spending on health increasing to 46 percent in 2020 from 36.4 percent in 2014, the PIDS said private out-of-pocket (OOP) spending is still almost half of the total health spending in the country.

“In health systems that have achieved UHC (universal health care), public spending is the major source of health financing with minimal OOP spending,” it said.

The PIDS said the widespread use of OOP is being discouraged by the World Health Organization as it limits access to health services and increases risk of incurring high health expenditure that could push more people into poverty.

“To improve efficiency and equity, public spending should be the major source of financing,” the PIDS said.

Findings of the study further revealed that public health expenditures were significant for GDP per capita across Southeast Asian countries and regional GDP per worker in the Philippines, suggesting that higher public investments on health is associated with better labor productivity.

“The results reinforce the need for the government to allocate resources in key areas (i.e., the health sector) that can stimulate economic growth while also improving population well-being,” the PIDS said.

With the economy expected to potentially benefit from spending on health care, the authors said the government should facilitate the implementation of the UHC Act, which aims to increase public spending on health to provide health care access to all Filipinos.

“Given the findings of this study, the implementation of the UHC Act should not be considered a health sectoral agenda alone, but also part and parcel of the country’s policy to improve economic productivity,” the PIDS said.