PHILIPPINE HEALTH Insurance Corp. (PhilHealth) faces the risk of collapse by 2022 if the pandemic continues and it fails to secure additional subsidies from the government, an official told the Senate on Tuesday.

The Senate began an investigation into alleged corruption at PhilHealth, with a whistleblower accusing former officials of stealing some P15 billion through fraudulent programs.

Nerissa R. Santiago, a PhilHealth senior vice-president, said the agency will no longer have any reserve funds by 2021, as contributions declined and benefit payouts rose amid the pandemic.

“Before the pandemic, the actuarial life was more than 10 years. However, because of the pandemic there’s a double impact on the program because of the decreased collections as well as the expected increase in benefits payout… we are expecting by 2021, we will be on the red already,” she told the panel.

Ms. Santiago noted PhilHealth will incur a net operating loss of P90 billion this year and P147 billion in 2021.

Asked by Senate Minority Leader Franklin M. Drilon if PhilHealth is facing collapse by 2022, Ms. Santiago answered in the affirmative, noting the agency will need government subsidies to keep it afloat.

Senator Ralph G. Recto, however, rejected Ms. Santiago’s claims that PhilHealth funds will be depleted since contributions are mandatory. He noted taxes imposed on various products such as sugar-sweetened beverages and alcohol are earmarked for PhilHealth.

Ang PhilHealth ay National Government and in fact, a monopoly at walang kahirap-hirap na mag-raise ng revenue dahil mandated ng batas (PhilHealth is with the National Government. In fact, it’s a monopoly and it’s effortless for it to raise revenue because it’s in the law),” Mr. Recto said.

Former PhilHealth Anti-Fraud Legal Officer Thorsson Keith also told the Senate that some of the agency’s executive committee members allegedly colluded to defraud PhilHealth of around P15 billion.

Naniniwala ako, base sa aking investigation na ang perang winaldas o ninakaw ay humigit kumulang P15 billion  (I believe, based on my investigation the money spent, rather stolen is more or less P15 billion.),” he said, adding the corruption was “endless.”

PhilHealth President and Chief Operating Officer Ricardo Morales categorically denied the allegations made by Mr. Keith, saying he should substantiate these claims.

Mr. Keith, who resigned from his post last month, said P15 billion was lost through the procurement of overpriced equipment and the Interim Reimbursement Mechanism (IRM), among others. The IRM allowed the agency to grant advance payments to healthcare institutions up to three months during the coronavirus pandemic, even if only P1 billion was liquidated.

“We are in this mess because of PhilHealth’s non-compliance with rules, including a simple CoA (Commission on Audit) rule. That is why we have all these problems because you disregard all the rules designed to protect public funds,” Mr. Drilon told Mr. Morales.

During the hearing, former PhilHealth board member Alejandro L. Cabading said he repeatedly flagged questionable budgetary items for the IT department, including a P2.1-billion budget proposal that did not provide specific details.

In response, Mr. Morales said the P2.1 billion was meant to improve the systematic fraud problem, citing a December 2019 study that showed its fraud index is 7.5%. This means the agency lost P10.2 billion to fraud out of the P136-billion total benefit payment last year.

“If the corporation stands to lose tens of billions a year through fraud which can be avoided by information technology, then the alleged overpriced P2.1 billion it program over three years appears paltry,” Mr. Morales said in the same hearing.

Meanwhile, Palace Spokesperson Harry L. Roque said President Rodrigo R. Duterte ordered the Office of the President Undersecretary Jesus Melchor V. Quitain to probe the allegations of corruption at PhilHealth. — C.A. Tadalan with report from GMC