PhilHealth not bankrupt, government corporate counsel assures
MANILA, Philippines — The Philippine Health Insurance Corp. (PhilHealth) remains financially sound and fully capable of fulfilling its mandate, its counsel told the Supreme Court (SC) during Tuesday's (February 25) oral arguments on the transfer of the state insurer’s idle funds to the national treasury.
Government Corporate Counsel Solomon Hermosura, PhilHealth's counsel, made the statement as he allayed concerns over the agency’s financial reports.
He said that the reported P1.150 trillion in PhilHealth liabilities is not an actual debt but a provision for future obligations based on actuarial estimates.
“Actually, what makes PhilHealth appear to have more liabilities than assets, Your Honors, is — and I quote this from the financial statements — its provision for insurance contract liabilities, which stood at P1.150 trillion as of December 31, 2023. Now, you will note that this is a provision for liabilities, Your Honor. It is not a statement of liabilities. It is just a provision,” Hermosura said.
Hermosura said that since PhilHealth has no current claims under these provisions, these figures do not indicate financial distress.
The lawyer cited the Financial Rehabilitation and Insolvency Act of 2010, which refers to liabilities as monetary claims against the debtor.
“There are no current claims for insurance contract liabilities against PhilHealth. There have been no such claims for insurance contract liabilities,” he told the justices.
According to Hermosura, PhilHealth operates differently from a private insurance company.
“That is because PhilHealth has not issued and has no outstanding insurance contract. PhilHealth is not an ordinary insurance company, Your Honor. It is a state insurance company," he continued.
“It cannot be insolvent because by law — and I refer you, Your Honors, please, to Section 58 of the National Health Insurance Act — the government of the Philippines guarantees the financial viability of the program or the national health program administered by PhilHealth,” he added.
Various health reform groups have criticized the transfer of P89.9 billion of unused PhilHealth funds to the national treasury supposedly to fund government projects.
During the oral arguments, Justice Amy Lazaro-Javier questioned the urgency of transferring the funds for use in programs that are already funded.
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