cenSEI T H E
Report
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Making universal health care for Filipinos a reality
He recommended that the premiums of the nonprofessional segment be subsidized by taxes, a view echoed by Senator Edgardo Angara. According to the MAG study, budget support for public hospitals like the Tondo Medical Center, East Avenue Medical Center, and others, has been decreasing. In effect, out of pocket payments have been increasing. The resources will be needed for truly reaching 100% of the population with adequate financial protection, an expanded list of services, and improved facilities. This discussion naturally leads to a look at the revised Sin Tax Law, mentioned at the start. According to PhilHealth president Dr. Eduardo Banzon, the health budget for 2012 has been increased to almost ₧44 billion, up from 2011’s ₧33 billion. Depending on which government agency is making the estimate (BIR’s ₧33-billion figure versus the Budget Department’s P60billion tab), revenues from the revised sin tax can significantly increase the budget for health care, although if we go by the proposal of Dr. Paterno, we still have a long way to go.
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Challenges facing private insurance Way back in 2006, the Department of Finance ordered a gradual increase in capitalization for non-life insurance companies. DOF Department Order 27-06 stipulated stipulated an increase in paid-up capital of the insurers to ₧50 million by end-2006, ₧75 million by end-2007, ₧100 million by end-2008, ₧125 million by end-₧2009, ₧175 million by end-2010, and P250 million by end-2011. In January, the Philippine Insurers and Reinsurers Association (PIRA) lodged a protest, more than five years after the order was finalized. PIRA is an umbrella organization of more than 80 small and medium insurance companies. They said the increased capitalization requirement was discriminatory against them. However, the Philippines has lower capital requirements than even neighboring countries in Southeast Asia, according to DOF Secretary Cesar Purisima. In Malaysia, the capital requirement is $33 million. Singapore’s is $20 million, while Indonesia’s is $12 million and Thailand’s is $6.44 million. The Philippines’, at ₧175 million, is only $4.6 million. Beyond the comparison, raising the capital requirement is essential to bringing greater stability to that insurance market, and safeguard it against possible shocks, Secretary Purisima said as he defended Order 27-2006. Companies who cannot raise the required capital have been encouraged to merge. More recently in May, the Insurance Commission (IC), which regulates the industry, told local media that the increase in capital requirement from the present ₧175 million to ₧1 billion by 2016 could be deferred. The Philippine Life Insurance Association (PLIA) said that this ruling could close more than half of the 84 nonlife insurance firms. As to how long this ruling will be deferred, the IC has not made a categorical decision.
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