The Philippines’ Public Health Insurance Agency Is Under Investigation for Corruption in the Middle of a Pandemic

Philippines President Rodrigo Duterte claims his administration is tough on corrupt officials but millions of dollars meant for universal healthcare were allegedly stolen under his watch.
Therese Reyes
Manila, Philippines
August 5, 2020, 11:05am
A train passenger has her body temperature taken before boarding a bus at a train station in Manila on July 7, 2020.

As hospitals in the Philippines continue to buckle under the pressure of rising coronavirus cases, its healthcare system now faces another blow following allegations that officials from the country’s public insurance agency have pocketed over $300 million in the past year.

This has sowed even more distrust among Filipinos, as the country is fast becoming the new epicenter of the coronavirus in Southeast Asia.

Corruption allegations have plagued the government-owned Philippine Health Insurance Corp (PhilHealth) in the past, but the latest investigation started in late July when an anti-fraud official resigned due to what he called “widespread corruption.”

Among other allegations, Thorrson Montes Keith wrote in his letter of resignation that there had been a delay in his salary and hazard pay since he started investigating PhilHealth officers in his role as an anti-fraud legal officer.

During a Philippines Senate hearing on Tuesday, August 4, Keith alleged that several high-ranking PhilHealth executives he called a “mafia” had stolen up to PHP15 billion ($305.3 million) meant for universal healthcare in 2019. Keith called his discovery the “crime of the year” and likened the alleged systematic corruption to a pandemic in itself.

He said the agency charges overseas Filipino workers who are supposedly exempt from making contributions, and overpriced items procured by the IT department. Investigations found that PhilHealth’s proposed 2020 information and communications technology budget had been padded by at least PHP734 million ($14.9 million). This included an undisclosed number of laptops supposedly worth over PHP119 million ($2.4 million) and three unspecified projects with a budget of PHP98 million ($2 million).

Even more troubling are allegations that funding meant to help hospitals treat coronavirus patients were misappropriated. During yesterday’s hearing, senators questioned PhilHealth's release of COVID-19 cash aid, even to healthcare institutions that were not treating coronavirus patients.

PhilHealth President and CEO Ricardo Morales, however, said that they did prioritize hospitals with COVID-19 patients, but also released the aid to other institutions in areas with a high number of cases and places with lower infection rates, to help them prepare for an outbreak. In June, PhilHealth was also criticized for its overpriced COVID-19 testing kits, which it later cut the prices of by over half.

As of press time, there were 115,980 COVID-19 cases and 2,123 deaths in the Philippines. On Tuesday, the government reported 6,352 new coronavirus infections, the highest daily jump in Southeast Asia.

PhilHealth covers testing and medical expenses for COVID-19 cases in public hospitals.

The agency now claims that a combination of decreased collections and an increase in payouts due to the pandemic will push it into bankruptcy by next year. However, Senator Ralph Recto questioned this and said that the agency should have reserved funds of up to PHP110 billion ($2.2 billion).

Philippine President Rodrigo Duterte publicly champions his administration’s campaign against corruption, even once threatening to kill corrupt police officers, but corrupt systems within agencies continue.

Before this year’s investigations, several PhilHealth executives were also accused of taking part in a “ghost dialysis” scam that allowed a dialysis center to claim funds for dead patients. Four of these executives were promoted in May, despite graft complaints filed against them.

Photo: Miggy Hilario / AFP