PhilHealth aims to break even after 2025 net loss
THE PHILIPPINE Health Insurance Corp. (PhilHealth) targets to break even this year as it received a subsidy under the 2026 budget that includes the P60 billion returned from the National Treasury as a result of a Supreme Court ruling that voided the fund transfer.
“So, as you know, we already were granted a substantial GAA (General Appropriations Act) subsidy to the tune of about P130 billion, which also includes the P60 billion that was ordered returned by the Supreme Court,” PhilHealth President and Chief Executive Officer Edwin M. Mercado told reporters last week.
“Moving forward, our objective is to break even or at least have some buffer,” he said.
The state health insurer received an allocation of P113.262 billion under the 2026 GAA, including a P53.262-billion subsidy sourced mainly from sin tax collections and the returned P60 billion in excess funds it earlier remitted to the Bureau of the Treasury.
The Supreme Court ruled in December last year that the 2024 GAA special provision and Department of Finance circular that enabled this transfer were void as both were carried out “with grave abuse of discretion amounting to lack or excess of jurisdiction.”
Under the special provision, government-owned or -controlled corporations were authorized to return their excess reserve funds to the Treasury to finance unprogrammed appropriations in the 2024 budget.
With the 2026 subsidy and the fund restoration, Mr. Mercado said he expects the state insurer to have a 5%-7% buffer between its projected benefit payments and collections from direct members by the end of this year.
“From P300-billion payments last year, our projection is about P378 billion this year. So, it’s another 25% growth.”
He said PhilHealth’s retained earnings declined in 2025 due to the lack of subsidies in last year’s budget even as it continued to expand benefits for its members.
“In terms of our net income, because we didn’t get any subsidy at that point, we already used up our retained earnings, which is the mandate given to PhilHealth.”
PhilHealth’s financial statement showed its retained earnings fell by 60.51% year on year to P59.06 billion in 2025 from P149.58 billion in 2024.
Meanwhile, benefit claims and expenses surged by 74.47% to P323.56 billion from P185.45 billion.
The state health insurer recorded a net loss of P103.06 billion last year, a reversal of its P64.3-billion profit in 2024.
The 2025 budget removed the entire P74.431-billion subsidy to PhilHealth that was proposed in the National Expenditure Program. Of this, P53.134 billion was supposed to fund insurance premiums for indirect contributors, P21.17 billion for benefit upgrades under the Universal Health Care law, and P121.17 million for community beneficiaries. PhilHealth kept these programs running by drawing from its reserves.
“I think that is the reason why the lawmakers moving forward were very supportive — because we showed that we have the absorptive capacity to roll out benefits and pay out faster,” Mr. Mercado said. — Aaron Michael C. Sy
