DOH, PhilHealth must prepare to absorb sin tax collections, says budget chief

Budget Secretary Florencio Abad INQUIRER FILE PHOTO

MANILA, Philippines — State health agencies might not be able to immediately absorb the expected incremental revenues from the proposed sin tax reform bill, a Cabinet official said on Thursday.

In a forum on health financing, Budget Secretary Florencio B. Abad said that the Department of Health (DOH) would be among the agencies that should improve their capacity and absorption.

“I’m not so much worried about the difference [in the amount of revenue]. I’m more concerned about the ability of the Department of Health and PhilHealth to actually absorb that huge amount,” Abad said.

The Aquino administration has proposed a version of the bill that would raise P60 billion in tax collections.

The version of the House of Representatives seeks to generate P30 billion while a committee report that Senate ways and means committee chair Ralph Recto presented would raise only P15 billion in additional revenue from sin products.

“DOH has to streamline its operation. PhilHealth for example, the availment rate is still low, so they have to look at the processes and see where the bottlenecks are,” Abad said.

Eduardo Banzon, PhilHealth director, assured that the agency has been implementing measures to help improve the capacity of health providers.

If the sin tax bill was passed, 85 percent of the expected revenue would be used for universal healthcare coverage while the remaining 15 percent would go to programs helping tobacco farmers, Abad said.

By next year, the government should have been able to cover the first quintile of the poor or 5.2 million indigent households, Abad said.

“With this sin tax measure approved, we want to be able to hit the second quintile of the poor, the informal sector, which number about 5.5 million households. So that will instantly double the coverage,” he added.

Banzon, meanwhile, said that if the sin tax measure was approved, PhilHealth would be able to provide an estimated total of P130 to P140 billion in benefits by 2015.