Universal Healthcare milestones face delays after reduction in budget allocations — BMI

LIMITED GROWTH in public health pending in the 2025 national budget could delay progress towards Universal Health Care (UHC), Fitch Solutions unit BMI said.

The UHC Act or Republic Act 11223 aims to ensure quality and affordable access to healthcare, minimizing financial hardship.

“The reduction in total health expenditure allowance will slow progress for the Universal Health Care (UHC) Act, limiting market opportunities in the public health system,” BMI said in a report on Monday.

In the General Appropriations Act (GAA) 2025, the Department of Health was allocated P247.56 billion, up 2.69% from a year earlier. The broader picture, however, taking into consideration the allocation for the Philippine Health Insurance Corp. (PhilHealth), shows a spending plan for health amounting to P297.6 billion.

“Despite a 10.1% year-on-year growth in the total government budget in 2025, public health expenditure saw a 3.5% decrease from 2024 levels,” it said.

BMI projects health spending to grow by 5.7% between 2023 and 2028.

“Significant cuts to the Health Facilities Enhancement Program (HFEP) and government-owned and -controlled corporation (GOCC) hospitals will reduce investment sustainability in the health system,” it added.

The HFEP budget goes towards the construction, upgrading or expansion of government healthcare facilities and the purchase of medical equipment and medical vehicles.

In 2025, this was trimmed to P22.9 billion from P28.5 billion a year earlier.

This year P14.5 billion was earmarked for infrastructure and P7.6 billion for medical equipment.

“We expect these reductions will limit the DoH’s operational ability to ensure that the 700 rural health units it manages, the 300 local government unit-run and other clinics are constructed and equipped with the necessary medical supplies and facilities,” BMI said.

Some regions are set to receive more funding. South Cotabato, Cotabato, Sultan Kudarat, Sarangani, and General Santos City (Soccsksargen) received a bump in allocation of 245% to P37 million, while Caraga got a 443% increase to P80.7 million.

“While these appear like large rises, given that most regions are not experiencing budget allocation changes in 2025, we believe they are only single investments which will not provide sustained market opportunities,” it said.

Similarly, the GOCC hospitals, which operate both commercial and noncommercial activities, had their funding cut.

BMI, citing the Department of Budget and Management, noted that the Philippine Children’s Medical Center’s budget fell 28.55% in 2025.

The Lung Center of the Philippines followed with a 10.08% decrease to P711.34 million, while the National Kidney & Transplant Institute’s funding fell 8.56% to P1.49 billion. The Philippine Heart Center’s budget fell 8.21% to P2.41 billion.

“We expect this will impact their ability to provide healthcare services in the regions they operate in,” it said. “Combined with the HFEP reductions, we anticipate that medical device sales will be constrained in these markets.”

Additionally, BMI noted that budget increases in other sectors such as defense “highlight a divergence from health system prioritization.”

This could lead to private health expenditure to grow 7.2% with greater resort to the private healthcare system.

PhilHealth, meanwhile, found itself stripped of subsidies. The bicameral conference committee report on the budget bill reviewed by President Ferdinand R. Marcos, Jr. originally contained a P74.4-billion subsidy for PhilHealth, which was stripped from the version ultimately signed by the President.

BMI also noted that the Philippines lacks 190,000 healthcare workers as professionals choose to migrate.

“Without a long-term plan, the public health system will lack the human capital necessary to maintain and expand its services, resulting in a decline in the quality of care,” it said. This could also be exacerbated by lower HFEP and GOCC budgets.

This could lead to a “more fragmented health system,” preventing “future market opportunities as the health system’s growth rate begins to slow.”

“I think all the healthcare cuts are significant since the budget for health should be increasing alongside education budget. It does not help that we prioritize education but consider health as a minor concern,” Leonardo A. Lanzona,an economics professor at the Ateneo De Manila said via Messenger chat.

In compliance to the constitution, education had the highest allocation in the 2025 GAA with P1.056 trillion.

He said that investments in these areas are “complementary” in the as the market returns from education are higher if healthcare is assured.

“Without health, education is not going to yield many market opportunities, making investments in schooling unproductive,” Mr. Lanzona said. added.

“It is crucial that we develop both human capital investments simultaneously.” — Aubrey Rose A. Inosante