Philhealth defies COA, pays P1.45-B bonuses
While its reserve fund falls P3.8 billion short of the minimum required, Philhealth also gives private contractors 'special events gift' and 'project completion benefit'

MANILA, Philippines – While the Philippine Health Insurance Corporation (Philhealth) posted a P3.8-billion shortfall in its reserve fund requirement in 2012, its officials and employees took home various kinds of bonuses and allowances that totalled P1.448 billion.

It also gave its contractors gifts amounting to millions of pesos.

Worse, the management of the state-run health insurance corporation did these despite notices from government auditors these releases “lack of legal basis.”

“Despite issuance of notices of disallowance and denial of the consolidated appeal of (Philhealth) management by the Cluster Director, Corporate Government Sector (CGS-COA), management continuously granted the aforementioned benefits and allowances without obtaining the required approval of the Office of the President,” the Commission on Audit (COA) said.

In a report released on October 10, COA said Philhealth management ignored its repeated warnings to stop paying its personnel unauthorized stipends based on mere resolutions passed by its Board of Directors.

Officials and employees receive the following “disallowed” bonuses and benefits:

  • productivity incentive allowance/bonus – P272.006 million
  • anniversary bonus – P33.4 million
  • rice benefit – P106.27 million
  • educational allowance – P278.89 million
  • Christmas package – P234.05 million
  • nominal gift – P10,000
  • shuttle service assistance – P134.53 million
  • labor management relation gratuity – P156.92 million
  • birthday gift – P39 million
  • medical and mission critical allowance – P23.33 million
  • corporate transition and achievement premium/grocery allowance – P104.4 million
  • representation expenses – P32.5 million
  • rewards and other claims – P24.74 million

Private contractors who dealt with PhilHealth were given the following:

  • “special events gift” – P743,500
  • project completion benefit – P1,705
  • gratuity/Christmas package – P1.46 million
  • sustenance gift/rice allowance – P788,400
  • recognition gift – P1.1 million
  • efficiency/productivity gift – P735,540
  • alleviation gift – P1.9 million
  • transportation assistance – P925,748
  • medical and mission critical allowance – P68,681

The central and regional offices of PhilHealth told auditors that they would only stop releasing questionable allowances if the COA central office denied their appeal.

“Regional management commented that they extended the benefits by order of the Philhealth Head Office…(and) that unless there is an order coming from the Commission Proper Denying their appeal, they would continue to grant the same,” auditors said.

While Philhealth personnel enjoyed huge allowances, the agency posted a P3.68-billion shortfall in “retained earnings (RE)” for 2012. It only had P115.08 billion against the reserve fund requirement of P118.76 billion.

“The viability and sustainability of the National Health Insurance Program is at risk due to the further decline in the RE balance,” COA warned.

Health cost claims in 2012 went up to P12.24 billion, while members’ premium contributions increased by only P10.57 billion.

Personnel services and maintenance and other operating expenses went up by P410 million precisely because of “the continuous granting of personnel benefits and allowances which were disallowed in audit due to lack of legal basis,” COA noted.

Last week, Phihealth president and chief executive officer Alexander Padilla announced that premium rates for members with a monthly income of P25,000 and below will go up from P1,800 to P2,400 beginning January 2014. – 

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