Setting a high bar for Cabinet resignations

The Philippine Health Insurance Corp. (PhilHealth) belatedly announced over the weekend that they will be collecting the five percent increase in our premium contribution starting first day of 2024. Its top management had the temerity to implement this premium contribution hike after they caused last year the illegal harvesting from the agency’s central server the personal data and information of many of us PhilHealth members.

With this year’s hike, the monthly contributions of members increased to P500 from P450 for those earning P10,000 a month; P5,000 for those with monthly income ceiling of P100,000.

For employed members, the amount of premium is shared equally by the employer and employee. For those without visible means of income, the national government and the local government unit share the payment of premium.

At a press briefing last Friday, PhilHealth president and chief executive officer Emmanuel Ledesma Jr. justified the increase in the premium contribution of all its members as being allowed by Section 10 of Republic Act (RA) 11223, otherwise known as the Universal Health Care (UHC) Act. “This increase of five percent in premium rate for this year will be the last increase,” Ledesma promised. It is not by the wishes of Ledesma but this was mandated by the UHC Law itself.

Under the UHC Law, the mandated increase in premium rate started in 2020 at three percent, with a graduated yearly increase up to five percent by 2024. In 2021, PhilHealth suspended the rate hike of 3 percent to 3.5 percent due to the COVID-19 pandemic.

At the same press briefing, Ledesma was still obviously trying to brown-nose his way out of a potential backlash of the mandatory premium contribution hike. He soft-pedalled his way by saying PhilHealth is ready to comply should Malacanang order another suspension of the increase in contribution. He estimated a P17-billion loss for the state-run health insurance agency if the hike is suspended anew.

“With our current cash position and with the help we’re getting from other agencies, I think that things will still push through as expected and I don’t think it will affect us. We’ll be fine,” Ledesma explained with much braggadocio. 

This is the kind of management that runs the PhilHealth in such a rudderless, directionless manner.

Under Ledesma’s watch, the PhilHealth server got hacked after its top management failed to renew its security firewall contract that expired in April last year. Then on Sept. 22, the “Medusa ransomware” attacked the PhilHealth server, prompting temporary shutdown of all its online systems. The Russia-based hackers demanded $300,000 (or approximately P17 million) in ransom from PhilHealth. Naturally, PhilHealth is bound by the government’s “no ransom policy.” On Oct. 5, the hackers leaked the affected database to a website and on Telegram. 

The hack only became public knowledge a few days later when ScamWatch Pilipinas and Bulletin tech editor Art Samaniego reported about it. In coordination with the CyberCrime Investigating Coordinating Committee (CICC), Samaniego was told they were already into damage control measures.

Curiously, the PhilHealth management did not even bother to alert its affected members/contributors. Yet, all that time, there has been an upsurge in cyberscams and other online crimes happening all over the place.

During the Kapihan sa Manila Bay news forum last Wednesday, Samaniego recalled how the PhilHealth management struggled in its denial state and went into a series of clarification statements one after the other. But as far as the PhilHealth case is concerned, CICC executive director Alexander Ramos cited this case as another reminder for a whole-of-government approach on data privacy protection. 

While the PhilHealth “was not compliant before,” Ramos pointed out, the CICC helped the agency review its systems and processes to prevent fresh attempts to “exfiltrate data” from its back-up files.

“They (PhilHealth) updated the endpoint security and that removed the vulnerability. But we can’t do anything because our data is already out there being used by cyber criminals,” Samaniego bewailed.

After carelessly handling its membership data, none of the top PhilHealth corporate executives was haled to court. Most of them were merely transferred elsewhere at the PhilHealth. Surprisingly, the buck did not stop at Ledesma’s desk.

Invoking “loss of confidence,” then newly appointed Department of Health (DOH) Secretary Ted Herbosa, acting as Board chairman of PhilHealth, approved in October the transfer of these several middle management officials for alleged “incompetence” and “ineffective leadership.” As of this writing, there is no update on the final actions taken on these PhilHealth officials who might still be at their jobs. 

But not for erstwhile Finance Secretary Benjamin Diokno, who resigned from the Cabinet after doing a “splendid job,” according to no less than President Ferdinand “Bongbong” Marcos Jr. (PBBM). Diokno, who is turning 76 years old this March, served four presidents of the Republic (Corazon Aquino, Fidel Ramos, Joseph Estrada and Rodrigo Duterte).

“Now, I’m on the cooling down phase of that long run, which I truly deserve,” Diokno quipped. He went back to his “natural habitat,” PBBM cited, as Monetary Board member with a fixed term until June 30, 2029. He was formerly serving the unexpired term as governor of the Bangko Sentral ng Pilipinas when then President-elect Marcos in June 2022 asked him to lead his Cabinet economic development group as Finance chief.

Former Batangas Rep. Ralph Recto took over as Diokno’s successor. But unlike Diokno, Recto will just be vice chairman of the economic development group under the supervision of his fellow newly installed Secretary Frederick Go as head of the Office Special Assistant to the President for Investment and Economic Affairs (OSAPIEA).

In dignified style, Diokno’s exit out of the Cabinet set a high bar for resignation when he decided to leave “in a better state of affairs” the Philippine economy after his watch.