Under the knife: the 2024 health budget

September 8, 2023

by Maricar Piedad

In the 2023 State of the Nation Address (SONA), Pres. Ferdinand Marcos Jr vowed that the health system would go through structural changes. But the proposed 2024 budget for the sector is slashed by Php2 billion, while the new appropriations for the Department of Health (DOH) Office of the Secretary (OSEC), which facilitates most of the health programs, is decreased by 4.8% from Php209.13 billion in 2023 to Php199.12 billion in 2024. The DOH-OSEC itemized budget further shows grave prognosis for public health.

Only 5.6% or about Php325.4 billion of the Php5.78 trillion proposed 2024 national budget will go to the health sector, and even a smaller percentage to direct health services and expansion of health system capacities. Meanwhile, the social health insurance program through PhilHealth gets a 1.7% increase, to Php101.5 billion proposed budget for 2024, 21% of which is meant for the expansion of PhilHealth’s benefit packages. The government is clearly going for a health system that is insurance-driven instead of direct service provisioning.

Direct services neglected

The Health Facility Operations Program (HFOP) gets the largest share (Php70.3 billion) of the DOH budget. The HFOP contains government funding for the DOH-retained hospitals, publicly owned blood centers, national reference laboratories, and the dangerous drug abuse treatment and rehabilitation centers. But it only has a miniscule increase of 2.4% in the proposed budget. Also, budgets for the operations of blood centers and national laboratories decrease by 10.9% and 19.2%, respectively.

Meanwhile, the increases in the operations budgets for the Metro Manila and regional DOH-retained hospitals and other facilities are barely enough to keep up with their growing needs. Also upon closer look, about 21 hospitals across the country will have budget cuts, including major hospitals such as the Jose Fabella Memorial Hospital, National Children’s Hospital, Mariano Marcos Memorial Hospital and Medical Center, Eastern Visayas Regional Medical Center, and Southern Philippines Medical Center.

The national government’s funding support to the four largest specialty hospitals have also drastically declined. The Lung Center of the Philippines (LCP), National Kidney and Transplant Institute (NKTI), Philippine Children’s Medical Center (PCMC), and Philippine Heart Center (PHC) have lower allocations for 2024 by 32.8%, 26.3%, 34.5%, and 14.8% respectively.

These decreases will further result in the inaccessibility of health services to the poor, since the government is putting pressure on these facilities to generate their own income to augment the insufficient budget they receive from the national treasury. Hospitals will be more inclined to accept paying patients than indigent patients as such preference will contribute more to their operations funding.

Additionally, devolution of health services has only worsened the insufficiency of resources for health facilities operations. Because local government units (LGUs) are to provide the operations budget of their respective hospitals, many hospitals in the poorer regions are receiving lower budgets resulting in increasing inaccessibility of health services to their constituents. The latest DOH LGU health scorecard report shows the disparity of regional expenditure for health. In regional per capita report, the National Capital Region (NCR) has the highest health expenditure with Php2,655 per capita, and the Cordillera Administrative Region (CAR) has the second highest at Php1,849. Meanwhile, the Davao region has the lowest expenditure at Php904.

Disease prevention undermined

It is worrisome that the proposed 2024 budget for prevention of both non-communicable and communicable diseases has been slashed by 41.1% and 17.8%, respectively.

This is alarming considering that many non-communicable (NCDs) and communicable diseases (CDs) are among the top causes of deaths and morbidity. NCDs such as cancers, cardiovascular diseases and diabetes are all preventable diseases and can be managed if detected or prevented early. Under the NCD prevention program is the implementation of the Philippine Package of Essential NCD Interventions (PhilPEN), which is the government’s comprehensive program in early detection, screening and treatment of NCDs. The government has a target of using PhilPEN to at least 70% of the eligible population, but until now only 10.6% are risk assessed using the PhilPEN program. The huge budget cut for the NCD prevention program will have heavy blows on the implementation of the program.

Meanwhile, CDs are constant health threats. Malaria and dengue outbreaks are common both in urban and rural areas, Human Immunodeficiency Virus (HIV) cases are rising, and tuberculosis cases remain high. Yet, the government is cutting the budget for the CD prevention program.

NCDs and CDs prevention programs are important because these diseases are fatal and expensive if detected late. They also require great medical attention in the late stages. But government is cutting the budget for prevention at any rate.

Scrimping on health facilities

President Marcos Jr said in his State of the Nation Address (SONA) that the government is increasing public health facilities both in number and capability. But again, this pronouncement is not reflected in the proposed 2024 health budget. The Health Facilities Enhancement Program (HFEP), which serves as the centralized fund for health infrastructure and equipment, has been slashed by 14.4% from the current year’s funding.

Under the HFEP, the construction of new Barangay Health Stations (BHSs), the country’s basic health unit, has suffered the most – it has no allocation for 2024. This is despite the government’s dismal backlog in setting up BHSs in the country. In the 2022 Field Health Services Information System (FHSIS) report, there is a total of only 23,614 BHSs across the 42,034 barangays, only half of what should be.

Meanwhile, the budget for Rural Health Units (RHUs) has also decreased by 36 percent. The funding for the construction of new Super Health Centers (SHCs) and RHUs decreased by 64.3%, while funding for the upgrading and repair of RHUs decreased by 9.2 percent. The only budget item that is increased under this program is the completion/equipping of SHCs, by 165.9 percent. However, the available health centers or HCs (such as SHCs and RHUs) in the country serve large catchment populations. In 2022, the population-to-HC ratio was 1 HC per 41,477 population.

The infrastructure and equipment support for local government unit (LGU) hospitals through HFEP is also slashed by 38.8% despite many LGU hospitals needing more infrastructure support. The national government will still pass on to the LGUs the burden to generate their own funding needs for hospital infrastructure and equipment while the poor state of public health hospitals across the regions cry for national government intervention in strengthening and capacitating facilities.

The HFEP has been inefficient in delivering the infrastructure and equipment needs of public health facilities. In recent years, the Commission on Audit (COA) flagged the DOH for low disbursement rate even if there was a huge need for building and equipping health facilities. The HFEP was also reported to have many delayed and undelivered projects. There were also reports of poor procurement of equipment.

The lack of health infrastructure apparently goes beyond the issue of lack of available funding. There are also implementation and management issues that hinder the strengthening of public health facilities.


The PhilHealth budget has been consistently growing since 2018. Yet, despite this misprioritization, PhilHealth is yet to deliver promises of accessible health services for all. For 2024, the corporation has been given an additional allotment for the improvement of benefit packages in addition to the subsidy for health insurance of Filipino indigents.

The government has put much premium on the universal health care (UHC) framework, which is simply a prioritization of health insurance rather than direct health services. PhilHealth has always been hyped as a purchaser of health services for the Filipinos, and is promoted as a solution to the issues of inaccessibility and unaffordability of healthcare. But the 2022 Philippine National Health Accounts (PNHA) shows that despite its expanded resources, PhilHealth has barely increased its share in the total health expenditure (THE). In 2022, it only accounted for 13.6% share in THE, much lower than the 19.4% share in 2015. This is questionable since the program has been allocated higher budgets and has been collecting larger premium contributions annually, especially since 2018. In 2022, the agency was able to collect a total of Php136.7 billion from direct contributors and an additional Php80.1 billion in subsidies for indirect contributors. These were much larger than its 2021 collections.

It is the private sector that mostly benefits from the social health insurance scheme. Despite having more accredited government facilities than private ones, most of the benefit claims payments go to the private facilities. In the 2023 midyear statistics, 58.5% of the 10,870 accredited health providers are government-owned while the remaining 41.5% are under private ownership. But 55.4% of the Php59.16 billion claims payments for the first half of 2023 were paid to private facilities, while 44.5% went to government facilities.

Meanwhile, the DOH social protection program, which goes to indigent patients confined in publicly owned hospitals and facilities, has been defunded by 32%, from Php32.6 billion approved in 2023 to Php22.3 billion proposed for 2024.

Defaulting on health

The 2024 proposed health budget reflects the Marcos Jr administration’s utter neglect of public health – by giving a low budget to direct service provision, increasing the financialization of healthcare by relying on insurance, and defaulting on its national responsibility by commercializing health services down to the local government level.

The government continues to turn over public health to private sector hands to provide for the health needs of the people. The UHC framework only serves as the mechanism to realize health privatization and commercialization and government’s main health governing policy. This has only weakened and debilitated the system.

The Marcos Jr government may be reasoning that the emergency of the COVID-19 pandemic is gone, the reason for the government giving less importance to the sector now. But even before the pandemic, because of the UHC framework, government neglect and reliance on the principles of privatization and commercialization have been the major plague that has afflicted the sector. The Marcos Jr administration does not have plans to reverse this.