Philhealth Automatic Funding Act

Senate Wifice of the Secretary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) 26 JAN 13 P4:14 First Regular Session SENATE RECEIVED BY: S. No. 1662 Introduced by Senator Loren Legarda AN ACT AMENDING SECTIONS 10 AND 37 OF REPUBLIC ACT NO. 11223, OTHERWISE KNOWN AS "UNIVERSAL HEALTH CARE ACT." EXPLANATORY NOTE Republic Act No. 11223, otherwise known as the Universal Health Care (UHC) Act, declares it the policy of the State to ensure that all Filipinos have equitable access to quality and affordable health care services. Central to the successful implementation of this law is the Philippine Health Insurance Corporation (PhilHealth), which serves as the primary vehicle for financing health services under the UHC framework. However, despite clear statutory mandates, PhilHealth has repeatedly been deprived of funds lawfully due to it under existing laws. Revenues earmarked for PhilHealth under the UHC Act, the sin tax laws, and the charters of the Philippine Amusement and Gaming Corporation (PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO) have not been fully and consistently released. These funding gaps undermine PhilHealth's capacity to deliver benefits, expand coverage, and sustain health services, placing at risk the very promise of universal health care. This persistent failure in fund release was brought into sharp focus by the recent decision of the Supreme Court directing the return of P60 billion previously transferred from PhilHealth to the National Treasury and prohibiting any further similar transfers. The High Court's ruling affirms a fundamental principle: funds intended for PhilHealth must remain with PhilHealth. These resources exist to protect the health of the Filipino people and are not meant to be diverted or withheld through administrative

or budgetary mechanisms. Nevertheless, as it is, allocations for PhilHealth under recent National Expenditure Programs continue to fall short of what is mandated by law, particularly with respect to earmarked revenues from sin taxes and other statutory sources. These recurring deficiencies reveal a structural problem: one that cannot be resolved by temporary budget insertions or ad hoc restorations alone. This measure therefore seeks to address the root cause of the problem by mandating the automatic appropriation and automatic release of all funds lawfully due to PhilHealth. By removing discretionary delays and ensuring that earmarked revenues are released directly and promptly, the bill aims to provide PhilHealth with stable, predictable, and reliable funding consistent with the intent of the UHC Act and related laws. At the same time, the bill recognizes that adequate funding must be matched by transparency and accountability. Ensuring that funds reach PhilHealth without delay strengthens congressional oversight by making it clear where resources are allocated, how they are utilized, and how they translate into tangible health benefits for the people. Universal health care cannot be realized if the institution tasked to deliver it is financially constrained by systemic funding failures. Health care is not a privilege but a right, and every peso intended for the people's health must be safeguarded and used for its intended purpose. In view of the foregoing, the immediate passage of this measure is earnestly sought. LOREN LEGARDA

Senate Office of the Secretary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES 26 JAN 13 P4:14 First Regular Session RECEIVED BY:. SENATE S. No. 1662 Introduced by Senator Loren Legarda AN ACT AMENDING SECTIONS 10 AND 37 OF REPUBLIC ACT NO. 11223, OTHERWISE KNOWN AS "UNIVERSAL HEALTH CARE ACT." Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

Section 1. Short Title. - This Act shall be known as the "PhilHealth Automatic

2 Funding Act"

Sec. 2. Section 10 of Republic Act No. 11223 is hereby amended to read as

4 follows: "Section 10. Premium Contributions. - For direct contributors, premium rates shall be in accordance with the following schedule, and monthly income floor and ceiling: XXXX Provided, That for indirect contributors, premium subsidy shall be gradually adjusted and INCLUDED ANNUALLY IN THE GENERAL APPROPRIATIONS ACT (GAA): PROVIDED, FURTHER, THAT THE FUNDS SHALL BE RELEASED TO PHILHEALTH: SHALL BE CHARGED AGAINST THE AUTOMATIC APPROPRIATIONS UNDER SECTION 37 OF THIS ACT: Provided, FURTHERMORE FURTHER, that the DOH, in

coordination with PhilHealth, may request Congress to appropriate supplemental funding to meet targeted milestones of this Act: Provided, FINALLY FURTHERMORE, That for every increase in the rate of contribution of direct contributors and premium subsidy of indirect contributors, PhilHealth shall provide for a corresponding increase in benefits."

Sec. 3. Section 37 of Republic Act No. 11223 is hereby amended to read as

7 follows: "Section 37. Appropriations. - The amount necessary to implement this Act shall be sourced from the following: xxXX (c) Forty percent (40%) of the Charity Fund, net of Documentary Stamp Tax Payments, and mandatory contributions of the Philippine Charity Sweepstakes Office (PCSO) as provided for in Republic Act No. 1169, as amended: Provided, That the funds raised for this purpose shall be transferred to PhilHealth at the end of each quarter subject to the usual budgeting, accounting, and auditing rules and regulations: Provided, further, That the funds shall be used by PhilHealth to improve its benefit packages. PROVIDED, THAT UPON REMITTANCE OF THE AMOUNT IDENTIFIED UNDER ITEMS (A), (B), AND (C) OF THIS SECTION TO THE BUREAU OF TREASURY, THE SAID AMOUNT SHALL BE DEEMED AUTOMATICALLY APPROPRIATED AND SHALL BE AUTOMATICALLY RELEASED TO THE PHILHEALTH BY THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM). (d) Premium contributions of members; (e) Annual appropriations of the DOH included in the GAA; and (f) National Government subsidy to PhilHealth included in the GAA. IN ADDITION TO THE AUTOMATICALLY APPROPRIATED AMOUNT HEREIN PROVIDED, the THE ADDITIONAL amount necessary to implement the provisions of this Act shall be included in the GAA and shall be appropriated under the DOH and National Government subsidy to PhilHealth. In addition, the DOH, in coordination with PhilHealth, may request Congress to appropriate supplemental funding to meet targeted milestones of this Act.

XXXX THE BUREAU OF INTERNAL REVENUE (BIR), THE PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), AND THE PHILIPPINE CHARITY SWEEPSTAKES OFFICE (PCSO) SHALL SUBMIT QUARTERLY REPORTS ON THE REMITTANCES TO THE BUREAU OF TREASURY, THE SENATE COMMITTEE ON HEALTH AND DEMOGRAPHY, AND THE HOUSE OF REPRESENTATIVES COMMITTEE ON HEALTH. THESE REPORTS SHALL BE MADE PUBLICLY AVAILABLE THROUGH THE OFFICIAL WEBSITES OF THE CONCERNED AGENCIES AND BOTH CHAMBERS OF CONGRESS.

Sec. 4. Separability Clause. If any provision of this Act shall be held

12 unconstitutional or invalid, the other provisions not otherwise affected shall remain 13 in full force and effect.

Sec. 5. Repealing Clause. Any law, presidential decree or issuance, executive

15 order, letter of instruction, administrative order, rule or regulation contrary to or 16 inconsistent with the provisions of this Act is hereby repealed, modified or amended 17 accordingly.

Sec. 6. Effectivity Clause. This Act shall take effect fifteen (15) days after its

19 publication in the Official Gazette or in a newspaper of general circulation. Approved,