Professor Orville Jose Solon, professor emeritus and former dean of the UP School of Economics, underscored that the persistent accumulation of unused funds in the Philippine Health Insurance Corporation (PhilHealth) reflects inefficiencies in the agency’s fund utilization—one that the national government sought to address by redirecting idle resources to public programs that deliver tangible benefits to Filipinos.
Speaking before the Supreme Court as an amicus curiae during oral arguments on February 4, Solon said the excess funds represent a lost opportunity to pay for healthcare services that could have benefited Filipinos sooner.
According to the economist, “excess funds obviously represent not just the power to purchase more… it also represents a missed opportunity to pay for services.”
He explained that under fundamental economic principles, public funds must be used efficiently to serve their intended purpose, rather than left idle.
“From an economic perspective… you use it or you lose it. That’s the spirit, the kind of signal that needs to be sent.”
Solon noted that if the Supreme Court rules that the excess funds should remain with PhilHealth, it should be conditioned on key reforms to ensure that they are spent efficiently. Otherwise, the funds would continue to be underutilized, delaying much-needed improvements in the country’s healthcare system.
He cited longstanding issues that have led to the persistent accumulation of unspent funds within PhilHealth, including the absence of a strong administrative information system, lack of actuarial technical foundation, and the failure to link operating budgets with performance and benefit delivery. Structural challenges such as disparities in healthcare supply across the country and fragmented healthcare management further exacerbate the problem.
Regardless of the Court’s decision, Solon stressed that PhilHealth must undergo significant reforms to ensure that public funds translate into actual healthcare services. These reforms include strengthening its actuarial department, aligning corporate budgets with direct benefit delivery, and adopting global budgeting practices to expand healthcare access in underserved areas.
Solon emphasized, speaking as an economist, that “public funds are very scarce, and it costs a lot of money to tax people, which has welfare effects—so they have to be handled carefully.”
“The presence of excess funds and how it needs to be resolved, whether transferred or kept, is ultimately a reflection of PhilHealth’s performance.”
