Lower documentary stamp tax to boost indigent care – PCSO

MANILA, Philippines — The Philippine Charity Sweepstakes Office (PCSO) would be able to contribute at least P2 billion more to help indigent Filipinos under the Universal Health Care (UHC) program – that is, if it would be charged lower documentary stamp tax (DST) rate for gross retail receipts.

PCSO chair Junie Cua pointed this out at a recent hearing of the Senate committee on health and demography.

“You will note that the inability of PCSO to contribute more to the UHC program is the fact that we need to pay 20 percent of our receipts by way of documentary stamp tax and this runs into tens of billions,” he said.

“Our advocacy right now is, if we can be allowed by Congress to reduce our DST obligation, it will raise our contribution to UHC,” Cua explained.

“So our projection is if our DST is only 10 percent, our contribution can rise to P3.3 billion, if five percent it can reach P4.4 billion,” Cua told the Senate panel. PCSO’s latest contribution was around P1.25 billion.

The P2 billion in additional contributions can fund 769,230 hemodialysis sessions for indigent diabetic patients. The Philippine Health Insurance Corp. (PhilHealth) coverage for each session is P2,600.

The same amount can also help 125,000 indigent patients with severe dengue, with PhilHealth covering P16,000 per case.

Aside from lobbying Congress for lower DST rate, PCSO is also pushing for a rationalization of its revenue allocations through an amendment to its charter.

“Both initiatives, if approved by Congress, would result in an increase in the agency’s contribution to UHC that would ultimately benefit the public in terms of realizing improved benefit packages being offered by the government through PhilHealth,” Cua said.

PCSO is one of the fund sources for the implementation of the UHC law, with 40 percent of its net charity fund to be allocated to PhilHealth for this year.

In its presentation to the Senate, the PCSO is projecting P53.23 billion in total retail receipts for 2023. With this, the agency has to pay about P10.65 billion (20 percent of retail receipts) in DST.

The allocated charity fund is 30 percent of total receipts, or around P15.65 billion, which is used to pay the DST, mandatory contributions and other charity-related expenses of the PCSO.

Thus, the projected net charity fund is only around P3.133 billion, 40 percent of which, or P1.25 billion, is for allocation to the UHC.

According to the PCSO, if the DST is lowered to 10 percent, the projected net charity fund is projected to increase to P8.45 billion. At this rate, the resulting UHC share will then increase to P3.382 billion – or an increase of 169.9 percent, according to Cua.

Lowering the DST rate further to five percent will increase the net charity fund to P11.1 billion, and raise allocation to the UHC to P4.45-billion, or a 254.86 percent increase from the original computation based on 20 percent DST.

From October 2019 to December 2022, the PCSO released a total of P2.7 billion in contribution to the UHC program.