Arowana Impact Capital

Healthcare in the Philippines: A Primer


The 1987 Philippine Constitution states that health is a basic human right. The Philippines has certainly been implementing reforms to “ensure equity, quality, and access to healthcare,” as stated in its Department of Health’s (DOH) mission. Health governance has been decentralised, with government health services transferred from a national to a local level. A social health insurance program called PhilHealth was launched in 1995 with the aim of ensuring universal health coverage.

These efforts have had positive results. According to the DOH, universal health care covered 98% of the country’s population in 2019. There have been minor improvements in health outcomes, as evident in the World Bank’s statistics for total life expectancy at birth (71.10% in 2018, 70.95% in 2017) and infant mortality rate (22.50% in 2018, 22.90% in 2017). However, two major problems still need to be addressed.

Photo by Gustavo Fring from Pexels

The first issue is in the distribution and accessibility of hospitals. According to DOH, there were 1,792 hospitals in the Philippines in 2018. Private hospitals account for 60% of the total with public hospitals making up the rest. Yet private hospitals cater to only about 30% of the total population, despite possessing superior financial resources and staff than their public counterparts. Moreover, these hospitals are in large towns and cities, with a particular concentration in Metro Manila.

The other issue lies in the doctor-to-patient ratio. It currently stands at 1:40,000 (according to the latest 2020 data from the Philippine Medical Association), a far cry from the ideal 1:10,000. Not only are there insufficient doctors, but the majority of them are concentrated in highly urbanised areas. Furthermore, roughly 70% of these doctors and other medical professionals work in private hospitals where they receive superior salaries.

Photo by Pixabay from Pexels

This skew of both hospitals and medical staff to private and urban areas has unfortunately resulted in health exclusion. There are insufficient public hospitals and healthcare workers to tend to the majority of the Philippine population. Poorer households have no choice but to resort to private hospitals, thus incurring high out-of-pocket (OOP) expenditure and creating a significant gap between the rich and the poor. Based on the latest data from the Philippine National Health Accounts (PNHA), total OOP expenses account for 58.60% of total health expenditure, amounting to PHP766.86 billion spent by the government, corporations, households, bilateral and multilateral donors and other sources. Given these figures, the Philippines still has a long way to go in terms of ensuring equity, quality, and access to healthcare.

 Over the years, the Philippine government has been initiating efforts to improve its health sector, as evident in its programs and health reform policies. These efforts, however, have not quickly translated to improvements in its system. Health resources remain unevenly distributed between urban and rural areas and the sector needs more despite already receiving the highest budget from the government.  “This either reflects that the investment is too small to make a change or there are efficiency challenges,” according to World Health Organisation.

Challenges like this, which appear intractable, cannot be solved by governments alone. Indeed, all over the world, not just in the Philippines, governments are already stretching to meet changing healthcare needs. The Philippines needs private capital to help solve the problem of healthcare exclusion. The private sector is well-positioned and necessary to ensure equity, quality, and access to healthcare.

Arowana Impact Capital