ECONOMIC

IMPACT

OF
HEALTH
AND

THE

ECONOMICS
OF
HEALTH

CARE

An Individual Term Paper

Presented to the
Ateneo School of Government
In Partial Fulfillment
of the Requirements for the
Master in Public Management (MPM)
By
MAURICE S. NAVARRO M.D.

Applied Economics for the Public Sector

Professor Enrico Mina

TABLE

OF

CONTENTS

Chapter
Page
I. INTRODUCTION
3
II. ECONOMIC IMPACT OF HEALTH
A. PHILIPPINE NATIONAL HEALTH ACCOUNTS
7
B. TOTAL HEALTH EXPENDITURE
7
C. HEALTH EXPENDITURE OF ASEAN COUNTRIES
9
D. PER CAPITA HEALTH EXPENDITURE
11
E. SOURCES OF FUNDS
11
F. GOVERNMENT HEALTH EXPENDITURE
13
III. ECONOMICS OF HEALTH
A. HEALTH ECONOMICS
17
B. PHARMACEUTICAL INDUSTRY
20
C. CHEAPER MEDICINES ACT OF 2008
23

D. HEALTH FACILITIES AND GOVERNMENT HEALTH MANPOWER

24
E. HEALTH INSURANCE
29
IV. CONCLUSION
33
BIBLIOGRAPHY
34

I. INTRODUCTION
Economics is the study of how individuals and societies choose to
use the scarce
resources that nature and previous generations have provided.1 This
definition of Economics is well applicable to health, which is one of the
most
neglected sectors of society, especially here in the Philippines. Health
in this paper may refer to the state of wellness or sickness of a person,
the services provided by doctors, nurses, pharmacists, medical
technologists and allied health professionals and the goods or facilities
in healthcare.

Case, Karl E. Principles of Economics, Ninth Edition. Philippines:

Pearson Education, Inc., 2009.

According to the World Health Organization, Health is a state of

complete physical, mental and social well-being, not merely the
absence of disease or infirmity.2 There are many indicators in
assessing the overall health status or well being of a population. Some
of these are Life Expectancy, Infant Mortality Rate and Maternal
Mortality Rate. These are shown in Figures 1, 2 and 3.
In Figure 1, the target for mean life expectancy was 71.2 years. This
was achieved by the female population but not the males. In Figure 2,
there is a decreasing trend for Infant Mortality Rate and the target of
17/1,000 livebirths was achieved in 2010. Lastly, in the Maternal
Mortality Rate, the rate was gradually decreasing but was not enough
to reach the target of 90/100,000 livebirths.
Figure 1 Mean Life Expectancy, 20063

Gabay, Bon Kristoffer G., et al. Health Economics in the Philippine

Context. Manila: Rex Book Store, Inc., 2008.
3

National Statistics Coordination Board (NSCB), www.nscb.gov.ph,

Makati City, Philippines, 1997-2011

Figure 2 Infant Mortality Rate, 20064

Figure 3 Maternal Mortality Rate5

4
5

National Statistics Coordination Board (NSCB)

National Statistics Coordination Board (NSCB)

5

Table 1 and 2 shows the Top 10 Leading Causes of Morbidity and

Mortality, respectively. The leading causes of morbidity are
Pneumonia, followed by Diarrheas and Bronchitis as the top 3. Most of
the causes on the lists are infectious, which are preventable. For the
Top 10 Causes of Mortality, Heart Diseases is still number 1, followed
by Vascular System Diseases (Stroke) and Malignant Neoplasm
(Cancer).

Table 1 Top 10 Leading Causes of Morbidity, No. & Rate/100,000

Population, 20046
Cause
1. Acute Lower RTI
and Pneumonia
2. Diarrhea
3. Bronchitis/
Bronchiolitis
4. Influenza
5. Hypertension
6. TB Respiratory
7. Heart Diseases
8. Malaria
9. Chickenpox
10. Measles

Number
674,386

Rate
861.2

615,692
604.107

786.2
771.4

431,216
325,390
92,079
30,398
28,549
26,137
25,535

550.6
415.5
117.9
38.8
36.5
33.4
32.6

Table 2 Top 10 Leading Causes of Mortality, 20047

Cause
1. Heart Diseases
2. Vascular System Diseases
3. Malignant Neoplasm
4. Accidents
5. Pneumonia
6. Tuberculosis
7. Symptoms, signs and
abnormal clinical laboratory
findings, NEC
8. Chronic Lower Respiratory
Diseases
9. Diabetes Mellitus
10. Certain conditions
originating in the perinatal
period

Rate
Number
67,696
51,868
39,298
33,966
32,055
26,771

83.5
64
48.5
41.9
39.5
33

21,363

26.3

5.4

18,905
14,196

23.3
17.5

4.8
3.6

14,122

17.4

3.6

Philippine Pharmaceutical Industry Factbook, PHAP 2008

Philippine Pharmaceutical Industry Factbook, PHAP 2008

Percent
17.1
13.1
9.9
8.6
8.1
6.8

II. ECONOMIC IMPACT OF HEALTH

A. PHILIPPINE NATIONAL HEALTH ACCOUNTS
It is important to present some statistics with regards to the
expenditures budgeted and appropriated to health by government and
private sources. It is also noteworthy to compare health expenditure
to the GNP, GDP, per capita expenditure, sources and uses of funds,
and other indicators. The National Statistics Coordination Board
(NSCB) is a rich source of these statistics. These are the so-called
Philippine National Health Accounts. It is a framework for the
compilation of information on the countrys health expenditures. It
tells: (a) how much is being spent on health care; (b) who pays for
health care; (c) what health care services are being provided; and (d)
how much it costs to administer health financing schemes8
B. TOTAL HEALTH EXPENDITURE
Total Health Expenditure refers to the sum of the public health
expenditure and private health expenditure in a given year. 9 In 2006,
Total Health Expenditure was 216.4 billion pesos, an increase of 18.4
billion from the previous year. This increased further to 243.4 billion
pesos in 2007, an increase of 27 billion pesos from 2006. The average

8
9

National Statistics Coordination Board (NSCB)

Gabay, et al.
8

annual growth rate from 2005 to 2007 was 8.7%. Health Expenditure
as percentage of GDP and GNP ranges from 3.6 to 3.5 and 3.4 to 3.2,
respectively. It can be noted that they are fairly the same or slightly
decreasing from 2005 to 2007 (See Table 3). With regards to Health
Expenditure as % of GDP, this is way below the 5 % minimum set by
the World Health Organization of the appropriation of Health Care
compared to the Gross Domestic Product (GDP). On the other hand,
the National Objectives for Health set the ratio for Health Expenditure
as % of GNP between 3 to 4 percent, which is between the criteria but
slightly decreasing during the 3 year period. Figure 4 shows graphical
representation of Health Care Spending Trends from 1998 to 2004,
those not covered by Table 3 which were from 2005 to 2007.

Table 3 Total Health Expenditure as Percent of GDP and GNP, 2005 to

200710

ITEM

Total Health Expenditure

(in billion pesos, at current
prices)

2005

2006

2007

Average Annual
Growth Rate,
2005-2007

198.4

216.4

234.3

8.7

Gross Domestic Product

(GDP, in billion pesos, at
current prices)

5,444.0

6,031.2

6,648.6

10.5

Gross National Product

(GNP, in billion pesos, at
current prices)

5,891.2

6,532.1

7,230.1

10.8

10

National Statistics Coordination Board (NSCB)

Health Expenditure as % of
GDP

3.6

3.6

3.5

(1.7)

Health Expenditure as % of
GNP

3.4

3.3

3.2

(1.9)

Figure 4 Health Spending Trends11

C. HEALTH EXPENDITURE OF ASEAN COUNTRIES

11

Philippine Pharmaceutical Industry Factbook, 7th edition,

Pharmaceutical and Healthcare Association of the Philippines (PHAP),
Nov. 2008

10

The Total Health Expenditure of the Philippines (See Table 4)

compared to Gross Domestic Product (GDP) in 2004 was 3.4%, the
same value the year before. On the other hand, the General
Government Health Expenditure compared to the Total Health
Expenditure was 30.7%, also slightly lower the year before. Compared
to other Asian countries, the Philippines showed lower percentage on
health expenditures to more developed ASEAN countries (Brunei,
Indonesia, Malaysia, Singapore, Thailand). Figure 5 shows the
graphical representation of Health Care Spending by selected ASEAN
countries.

Table 4 Selected National Health Accounts Indicators for the Philippines

and Other ASEAN Countries, 2003 to 200412

12

NSCB.
11

Total
expenditure on
health as % of
GDP

General
government
expenditure on
health as % of
total expenditure
on health

Private
expenditure on
health as % of
total expenditure
on health

2003

2004

2003

2004

2003

2004

2003

2004

3.5

3.2

80.0

79.7

20.0

20.3

n/a

n/a

Cambodia

10.9

6.7

19.3

25.8

80.7

74.2

18.5

28.5

Indonesia

3.1

2.8

35.9

34.2

64.1

65.8

1.4

1.3

Lao
People's
Democratic
Rep.

3.2

3.9

38.5

20.5

61.5

79.5

30.0

10.2

Malaysia

3.8

3.8

58.2

58.8

41.8

41.2

0.1

0.1

Myanmar

2.8

2.2

19.4

12.9

80.6

87.1

2.2

13.1

Philippine
s - WHO

3.2

3.4

43.7

39.8

56.3

60.2

3.8

3.6

Philippine
s

3.4

3.4

31.1

30.7

58.6

58.5

3.3

3.8

Singapore

4.5

3.7

36.1

34.0

63.9

66.0

0.0

0.0

Thailand

3.3

3.5

61.6

64.7

38.4

35.3

0.3

0.3

Viet Nam

5.4

5.5

27.8

27.1

72.2

72.9

2.6

2.0

Member
State

Brunei
Darussalam

External
resources for
health as % of
total expenditure
on health

Figure 5 Comparative Health Spending by ASEAN Countries 13

13

Philippine Pharmaceutical Industry Factbook, PHAP 2008

12

D. PER CAPITA HEALTH EXPENDITURE

The Per Capita Health Expenditure is the amount spent on health
per person or the per capita amount of the sum of public expenditure
on health and private health expenditure.14 The Per Capita Health
Expenditure at current prices (See Table 5) in 2007 (2,642 pesos) was
154 pesos higher than 2006 (2,488 pesos). It can be noted that there
was a 0.7% drop in Per Capita Health Expenditure Growth Rate
between 2007 and 2006.
Table 5 Per Capita Health Expenditure, 2005 to 200715

ITEM

14
15

2005

2006

2007

Average
Annual
Growth
Rate,
2005-2007

Gabay, et al.
NSCB.
13

Per Capita Health Expenditure(in

pesos, at current prices)

2,327

2,488

2,642

556

570

581

85.3

87.0

88.7

2.0

Per Capita Health Expenditure

Growth Rate
(in percent, at current prices)

6.9

6.2

6.5

Per Capita Health Expenditure

Growth Rate
(in percent, at constant 1985
prices)

2.5

2.0

2.2

Per Capita Health Expenditure

(in pesos, at constant 1985
prices)
Population (million)

E. SOURCES OF FUNDS
With regards to the Sources of Funds for Health (See Table 6),
Private Sources are the main source of funds for the typical Filipino
family. Most Filipinos pay out of pocket in an increasing trend from
49.2% up to 54.3%. The Health Sector Reform Agenda (HSRA) program
of the DOH set a target of only 20%, so this is more than twice the
target for out of pocket. It is followed by Health Maintenance
Organizations (HMO) and Employer-Based Plans. Government
(National and Local) is the 2nd major source of funds. The percentages
range from 29.5% to 26.6% which are decreasing. The HSRA target for
the Government as source of fund was 40% which was way below the
target. This means that more and more Filipinos are paying for their
Health Care out of their own pocket rather than the Government easing
their burden. Social Insurance is the 3rd source of funds. Figure 6
14

shows the graphical representation of the share of social insurance and

private resources in 2004 and 2005.
Table 6 Distribution of Health Expenditure by Source of Funds, 2005 to
200716
Percent Share
Source of funds
2005
GOVERNMENT

2007

29.5

26.6

26.2

National Government

15.3

12.5

13.0

Local Government

14.1

14.1

13.3

9.8

8.8

8.5

National Health
Insurance Program

9.7

8.8

8.5

Employees'
Compensation

0.0

0.0

0.1

59.6

62.6

64.8

49.2

52.3

54.3

Private Insurance

2.1

1.8

1.8

Health Maintenance
Organizations

4.5

4.7

5.1

Employer-Based Plans

2.9

2.7

2.5

Private Schools

1.0

1.1

1.1

1.1

2.1

0.4

1.1

2.1

0.4

100.0

100.0

100.0

Social Insurance

Private Sources
Private Out-of-pocket

Rest of the World

Grants
ALL SOURCES

16

2006

NSCB
15

FIGURE 6 NCSB Share of Social Insurance and Private Sources in

Health Expenditure Increases, 2004 to 200517

F. GOVERNMENT HEALTH EXPENDITURE

As was noted in the table above, the Government (National and
Local) accounts for the 2nd major source of funds for Health
Expenditure in the Philippines. Before Republic Act (R.A.) 7160 or the
Local Government Code of the Philippines, the National Government,
particularly the Department of Health, was responsible for providing
health care and services to Filipinos. Health Care was centralized. But
with the passage of the Local Government Code, these functions were
decentralized and devolved to the Local Government Units. According
to Sec. 2 of R.A. 7160, It is hereby declared the policy of the State
that the territorial and political subdivisions of the State shall enjoy
genuine and meaningful local autonomy to enable them to attain their
17

NSCB
16

fullest development as self-reliant communities and make them more

effective partners in the attainment of national goals.18 Figure 7
shows the Total Health Expenditure by Uses of Funds in 2004 and 2005,
with the majority being personal funds (77.7 % and 78.4 %).

FIGURE 7 Total Health Expenditure by Use of Funds, 2004 to 200519

18

Republic Act No. 7160, An Act Providing for a Local Government

Code of 1991, Oct. 10, 1991.
19

NSCB.
17

As shown by Table 7, Public Health Care Expenditure increased from

2004 to 2005, but in spite of this Personal Health Care is still more than
Public Health with regards to Government Health Expenditure.
Table 7 Government Health Expenditure by Use of Funds20

AMOUNT (in billion pesos)

PERCENT SHARE

YEAR
Personal

Public

Others

TOTAL

Personal

Public

Others

2004

22.0

16.7

12.0

50.8

43.4

32.9

23.7

2005

21.4

20.1

10.5

51.9

41.1

38.6

20.2

2004-2005
Growth
Rate

(3.1)

19.9

(12.6)

2.2

Total National Government Expenditure (see Table 8) went up

between 2004 to 2005 mainly due to the increase in expenditure in
Loans and other National agencies. However, there was a decrease in
the Expenditures of the DOH and its attached agencies and Grants.
DOH agencies include the Office of the DOH Secretary, Philippine Heart
Center, Lung Center of the Philippines, National Kidney and Transplant
Institute, Philippine Childrens Medical Center, and the Population
Commission.

20

NSCB.
18

Table 8 National Government Health Expenditure, 2004 to 200521

AMOUNT (in million pesos)

DOH and
its
Attached
Agencies

Other
National
Agencies

2004

15,425.2

2005

YEAR

PERCENT SHARE
DOH and
its
Attached
Agencies

Other
National
Agencies

Loans

Grants

Total

4,256.1

2,183.7

4,154.3

26,019.3

59.3

16.4

8.4

16.0

13,764.5

6,086.4

6,529.8

2,270.8

28,651.4

48.0

21.2

22.8

7.9

(10.8)

43.0

199.0

(45.3)

10.1

20042005
Growth
Rate

Loans

Local Government Health Expenditures (see Table 9) compared to

the National Government Health Expenditure between 2004 to 2005
showed a decrease in all uses of funds such as personal health, public
health and others. It can be noted that the share of Public Health
makes up the majority of the percentage in the Local Government.
Figure 8 shows the graphical representation of Trends in Share of LGU
in National Budget and Health Spending.
Table 9 Local Government Health Expenditure by Use of Funds, 2004 to
200522

21
22

NSCB
NSCB
19

Grants

AMOUNT (in million pesos)

PERCENT SHARE

YEAR
Personal

Public

Others

TOTAL

Personal

Public

Others

2004

6,310.3

11,192.7

7,269.3

24,772.3

25.5

45.2

29.3

2005

6,008.3

10,819.0

6,443.2

23,270.6

25.8

46.5

27.7

(4.8)

(3.3)

(11.4)

(6.1)

20042005
Growt
h Rate

Figure 8 Trends in Share of LGU in National Budget and Health

Spending23

III. ECONOMICS OF HEALTH

A. HEALTH ECONOMICS

23

Philippine Pharmaceutical Industry Factbook, PHAP 2008

20

Economics and Health were defined previously in the first portion of

this paper. It is also important to define Health Economics as this term
encompasses both
Economics and Health, and would give us a better understanding of
the Economics
of Health Care. Health Economics refers to the study of proper
allocation and efficient utilization of health resources for the
improvement of health where resources are limited and wants are
potentially infinite.24 As the definition of Economics previously in the
Introduction also deals with scarce resources, Health Economics can
cover all allocation of health resources, such as drugs, medical
personnel like doctors and nurses, hospitals, medical supplies and
services, and even health insurance coverage to name a few. Infinite
wants on the other hand refers to the infinite demand for health care.
Since resources are limited and demand is infinite, efficient allocation
is the primary thing to do in Health Economics.
In one of the reading materials that we were assigned to read, I
came across an Asian Development Bank study regarding poverty in
the Philippines. Poverty incidence among households increased from
24.4% in 2003 to 26.9% in 2006 and the number of poor families
increased from 4.0 million in 2003 to 4.7 million in 2006.25 Applying
24

Gabay, et al.
Poverty in the Philippines: Causes, Constraints and Opportunities,
Asian Development Bank (ADB), 2009.
25

21

this to the Health Economics, as poverty incidence increases, family

income decreases. And as family income decreases, it affects the
pattern of expenditures by the poor families. In Table 10, as the family
income decreases, expenditures of the family is spent on Food and
Utilities. Meanwhile, Education and most importantly Health are being
neglected to compensate for the expenditures on the basic needs,
which are Food and Utilities.
Table 10 Pattern of Expenditures by Income Decile, 2006 Family Income
and Expenditures Survey, 200626
Income
Decile
1
2
3
4
5
6
7
8
9
10
Total

Food

Utilities

Education

Health

61.7
60.2
58.2
55.8
53.0
50.3
46.9
42.8
38.4
31.1
49.8

7.6
7.2
7.2
7.4
7.6
7.9
8.3
8.0
8.0
7.3
7.7

0.6
1.1
1.4
1.7
2.1
2.3
2.6
3.8
4.8
6.1
2.5

1.4
1.6
1.7
1.8
2.0
2.1
2.3
2.6
2.9
3.5
2.2

In the Philippines, many of our people receive remittances from

their relatives working abroad. It can be noted also that among
Remittance Recipients compared to Nonremittance recipients (See
Figure 9), their household expenditures for health increased from 1.9%

26

Poverty in the Philippines, EDB, 2009.

22

to 3.0% in 2006, and other expenditures as well. Expenditure for Food

was the one that decreased.
Figure 9 Shares of Household Expenditure among Remittance Recipient
and Nonrecipient Households (percent), 2006 27

B. PHARMACEUTICAL INDUSTRY
One of the problems of health care in the Philippines is the high cost
of drugs. According to the World Health Organization (WHO), medicine
in the Philippines costs 3.4 to 184 times higher than the international

27

Ang, Alvin P., et al, Remittances and Household Behavior in the

Philippines, Asian Development Bank, No. 188, Dec. 2009.

23

reference prices.28 Because of the high cost of medicines, many

people cannot afford to buy medicines. The rich and those that can
afford do not have the same problems as those of the poor. Because
the poor cannot afford to buy medicines, they resort to underdosing,
or buying only the minimum quantities that they can buy thereby
resulting to less therapeutic benefit of the drug. Others try
nonconventional therapies such as herbal medicines, albularyo, and
even faith healing, especially in the province. Others, do not buy
medicines at all. This results to reduce access of the poor to affordable
medicines. To understand further the Philippine Pharmaceutical
Industry, a study was done by Allan Sobrepena. He illustrated his
findings in Figure 10.

FIGURE 10 Market Structure of the Drug Industry with Emphasis on

Market Control29
28

Essential Drugs and Medicine Policy, World Health Organization

(WHO), Western Pacific Region, Issue No. VII, 2007.
29

Sobrepena, Allan Grand A, Drug Regulation in the Philippines, UPNCPAG, http://ssrn.com/abstract=1394204

24

According to Figure 10, the major drug distributors in the

Philippines are Zuellig Pharma, and its subsidiary Metro Drug, Inc which
control 80% of distribution. Zuellig Pharma also owns 70% of Interphil
Laboratories, which in turn is the major Drug Wholesaler. In the Retail
Pharmacy, Mercury Drugstore controls 80% of the drugstore chains.
Private retailers and Hospital Pharmacies (Private and Government)
accounts for the minority. These findings points to control of the
Philippine Pharmaceutical Industry to the hands of a few company like,
Zuellig Pharma, Interphil Laboratories and Mercury Drugstore which
controls distribution, wholesale and retail of drugs, respectively. This is

25

like a near monopoly, in which is Monopoly is defined by Case as an

industry composed of only one firm that produces a product for which
there are no close substitutes and in which significant barriers exist to
prevent new firms from entering the industry.30 Another example of
Monopoly especially of drugs here in the Philippines was during Bird Flu
crisis wherein our country has no stock piles of Tamiflu, because the
only manufacturer, Roche, did not produce enough supplies and most
of its stocks goes to more developed countries, the ones that are less
affected by the pandemic.
There are some government interventions done in order to remedy
this. Some of these are Republic Act No. 6675 or the Generics Act of
1988,31 parallel importation of drugs through the Philippine
International Trade Corporation (PITC), Botika ng Bayan and Botika ng
Barangay, and the latest of which is Republic Act No. 9502 or the
Cheaper Medicines Act of 2008.
These interventions were part of our group report, the Chairman
Maos Group (Group No. 1) in the 1st module Understanding The
Bureaucracy here in the Ateneo School of Government. 32 We
30

Case, et al.
Republic Act No. 6675, An Act to Promote, Require and Ensure the
Production of an Adequate Supply, Distribution, Use and Acceptance of
Drugs and Medicines Identified by their Generic Names, Sept. 13,
1988.
31

32

Rationalizing the Governments Cheaper Medicines Retail Distribution

Program by Merging DOHs Botika ng Barangay with DTI-PITCs Botika
ng Bayan Program, Chairman Mao Group (Group No. 1), Ateneo School
of Government, 2010.
26

discussed that the Generics Act was passed in order to reduce the
prices of medicines from 75% to 95%. But after more than 20 years
since it was passed, generic drugs penetration in the market was only
5%. This was probably due to lack of medical and public support for
generic medicines.
The Department of Trade and Industry (DTI) initiated parallel drug
importation of off-patent drugs from India through the Philippine
International Trade Corporation (PITC). The Botika ng Bayan is under
the DTI-PITC which primarily sell branded off-patent drugs mainly
imported from India, while the Botika ng Barangay under the DOH sells
generic over the counter (OTC) drugs. These 2 Botikas seems to be
duplicative in their function, and mostly located in rural areas, so in
order to maximize their benefit and to compete with the giant
drugstores, like Mercury Drug, we recommended the merger of these
two, to be called Botika ng Bansa in our previous group paper.
C. CHEAPER MEDICINES ACT OF 200833

33

Republic Act No. 9502, An Act Providing for Cheaper and Quality
Medicines, Amending for the Purpose Republic Act No. 8293 or the
Intellectual Property Code, Republic Act No. 6675 or the Generics Act of
1988, and Republic Act No. 5921 or the Pharmacy Law, and for Other
purposes, April 29, 2008
27

The most recent law to be passed by Congress to help reduce the

high price of medicines in the Philippines was the Cheaper Medicines
Act of 2008. It has Four (4) Objectives:34
1. Amend R.A. 8293 Intellectual Property Code thereby
strengthening competition
-

Prohibit new patents grants on newly discovered uses of a

known drug
substance
-

Allow local firms to test, produce and register their generic

versions of
patented drugs
-

Allow use of patented drugs by the government when the

public interest
is at stake

2. Allow the President the power to set a Maximum Retail Price

(MRP) on
certain drugs recommended by the DOH Secretary
3. Strengthen the Bureau of Food and Drugs (BFAD) by allowing it to
retain its

34

Universally Accessible Cheaper and Quality Medicines Act of 1998:

Bringing Cheaper Medicines to Filipinos, National Economic
Development Authority (NEDA), Dev Pulse, vol. XII, no. 12, June 30,
2008

28

revenues thereby upgrading their equipments, equipments and

human resources
4. Allow parallel importation of patented drugs that are more
affordable

All of these objectives should contribute in bringing down the prices of

medicines to 50%. But it is still too early if this law can do this since it
is only 3 years since it was passed.
D. HEALTH FACILITIES AND GOVERNMENT HEALTH MANPOWER
According to Dr. Alberto Romualdez, 70% of all healthcare workers
are employed in the Private Sector serving 30% of the population while
only 30% are employed in government services catering to the
majority, of whom many are also engaged in the private sector licitly or
illicitly.
Table 11 shows the number of hospitals, both Government and
Private, from 1999 to 2007. Private hospitals outnumber the
government hospitals. Although not verified by the statistics, an
article in the Philippine Star on Nov. 23,2005 by Sheila Crisostomo
found out that the number of private hospitals went down from
around 1,700 in 2000 to only 700 in 2005 because of lack of doctors,
nurses, and even midwives who could attend to their patients.35 It
35

Crisostomo, Sheila and Mayen Jaymali, 1,000 RP Hospitals Shut

Down in 5 Years, Philippine HJeadline New Online, 23 Nov. 2005,
29

can also be noted in Table 8 that Government Health Manpower are

more or less stationary with no much movement, except to the notable
decrease in the number of government nurses which shows a steady
decline. Figure 11 and Figure 12 further shows that there is a
disproportionate distribution of government and private hospitals in
the Philippines were more than 50 % are situated in Luzon, particularly
the NCR region.

Table 11 Health Facilities and Government Health Manpower, 1999 to

200736

Item
Hospitals

1999

2000

2001

2002

2003

2004

2005

2006

2007

1,794

1,712

1,708

1,739

1,719

1,725

1,838

1,921

1,781

Government

648

623

640

662

662

657

702

719

701

Private

1,146

1,089

1,068

1,077

1,057

1,068

1,136

1,202

1,080

Doctors

2,948

2,943

2,957

3,021

3,064

2,969

2,967

Dentists

2,027

1,943

1,958

1,871

1,946

1,929

1,946

1,930

1,894

Nurses

4,945

4,724

4,819

4,720

4,735

4,435

4,519

4,374

4,577

Midwives

16,173

16,451

16,612

16,534

17,196

16,967

17,300

16,857

16,821

14,416

15,204

15,107

15,283

14,490

15,099

15,436

16,191

16,219

Government
Health
Manpower

Barangay

2,955

http://www.newsflash.org/2004/02/hl/hl103231.htm
36

NSCB.
30

3,047

Health Stations
Rural Health
Units

2,212

2,218

1,773

1,974

2,259

2,258

2,266

...

With the more or less the same number of Government Health

Manpower from 1999 to 2007, this is alarming since there was no
increase in their number, and worse, they are even decreasing, while
the population of the Philippines continue to rise during this same
period. (See Table 9)

Figure 11 Distribution of Government Hospital Beds, By Region, Year

200537

37

Philippine Pharmaceutical Industry Factbook, PHAP 2008

31

...

Figure 12 Distribution of Private Hospitals Bed by Region, Year 2005

32

Table 12 Population Growth of the Philippines, 1999-2010 38

Year
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

Population (in
millions)
74.746
76.947
78.568
80.217
81.878
83.559
85.261
86.973
88.706
90.457
94.227
94.013

Percent Change
2.18
2.94
2.11
2.10
2.07
2.05
2.04
2.01
1.99
1.97
1.96
1.94

%
%
%
%
%
%
%
%
%
%
%
%

Table 13 shows the Standard Ratio of Government Health Manpower

to the Population. For example in 2007, the highest number of
government doctors, the ratio was 1:29,113 (1:20,000) computed by
dividing 3,047 from 88.706M total population. The ratio for the nurses
for the same year was 1:19,381 (1:20,000). The ration of the doctors
to the population is dwindling, probably due to the fact that many
doctors are shifting to Nursing to work abroad. The ratio of the nurses
to population is within the normal ratio probably due to the surplus of

38

IndexMundi, Philippines Population, 2010.

33

nurses, working to get the necessary experience so that they can also
work abroad.

Table 13 Standard Ratio of Manpower to Population 39

MANPOWER
Rural Health Physician
Public Health Nurse
Rural Health Midwife
Rural Health Inspector
Rural Health Dentist

RATIO TO POPULATION
1:20,000
1:20,000
1:5,000
1:20,000
1:50,000

Figure 13 Number of Government Health Workers per 10,000

Population, 200540

39

Republic Act No. 7305, Magna Carta of Public Health Workers,

1999.
40

Philippine Pharmaceutical Industry Factbook, PHAP, 2008

34

Statistics show that every year, between 5,000 and 8,000 nurses
leave for abroad, around 2,000 of them former doctors.41 This is
because of the high paying job of nurses abroad wherein a Filipino
nurse can earn as much as $3,000 to $4,000 a month in the United
States while the salary of nurses here in the Philippines especially in
the province is just $120.
E. HEALTH INSURANCE
One of the neglected expenditure on health is with regards to
health insurance. How many of us have coverage for a health

41

Conde, Carlo H., A Sick Health Care System, Bulatlat Vol. IV, No. 37,
Oct. 17-23,2004, http://www.bulatlat.com/nesws/4-37/4-37-sick.html

35

insurance? It is not a problem if we are rich or in the middle class, but

it is a major problem especially among the poor, since they dont even
have money to buy medicines or let alone be admitted in a hospital.
One of the noteworthy programs of the government regarding social
health insurance is the National Health Insurance. When I worked for
sometime in the U.S., I envy their citizens because of their MEDICARE
program, I told myself, we should have a health insurance program just
like that here in the Philippines. Fortunately, we have the Philippine
Health Insurance Corporation or PhilHealth.
Through the PhilHealth, the local government together with the
national government can subsidize the health insurance coverage of
their people, especially the Indigents. In our city, Santiago City, in
which my mother is the current City Mayor, we have enrolled about
16,666 indigent families (City Population is about 131,420). This
means that if one Indigent Family member, enrolled 5 members of his
family, this is equivalent to 83,330 or 63.4 % of the population. In the
Philippines, the current coverage of PhilHealth is around 30 % only. 42
Table 14 shows the cost to enroll an Indigent Family in PhilHealth while
Table 15 lists the Medical Benefits of a PhilHealth Member.

42

Oplas, Jr. Bienvenido, Politics of Health Cost Containment:

Philippines, Singapore, Jan. 25, 2011, www.minimalgovernment.net

36

Table 14 Cost to Enroll an Indigent Family in PhilHealth Plus43

Class of LGU

LGU Pays

National Govt.
Pays

1st-3rd class
4th-6th class

594.00 (50 %)
118.80 (10%)

594.00 (50 %)
1,069 (90 %)

Total Premium
per Family Per
Year
1,188.00
1,188.00

Table 15 Medical Benefits of a PhilHealth Member44

Hospital Benefits
(for all enrolled families)
Room and Board
Drugs and Medicines
Professional Fees
Operating Room, Surgeons
Fees, and Anesthesia

43
44

Outpatients Benefits
(for all enrolled indigent families only)
Primary Consultation
Laboratory Fees for:
Chest X-ray
Complete Blood Count
Fecalysis
Sputum Microscopy
Preventive/Promotive Health Services
Visual Acetic Acid
Cervical Screening
Regular Blood Pressure Measurement
Annual Digital Rectal Exam
Body Measurement
Periodic Clinical Breast Examination
Counseling for Cessation of Smoking and
Lifestyle Modification

Gabay, et al.
Gabay, et al.
37

Figure 14 PhilHealth Spending Vs. Collections45

IV. CONCLUSION
The problems facing the Philippine Health Care basically boils down
to 2 problems, Affordability and Accessibility of Health Care. The
Government and the Private sector should work together to solve this
problem. We have a long way to go in solving our health problems
because it is affected by problems in our economy. We should have
policies that would cater to both because I believe that if our Economy
is Healthy, our People will also be Healthy.

45

Philippine Pharmaceutical Industry Factbook, PHAP 2008

38

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Crisostomo, Sheila and Mayen Jaymali, 1,000 RP Hospitals Shut Down
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40