Press Release
August 20, 2019

Drilon says COA OK to special audit of Philhealth funds

The Commission on Audit (COA) has agreed on the need to conduct a special audit of Philippine Health Insurance Corp. (Philhealth) funds and disbursements, but it raised difficulties in getting pertinent information and documents from the agency, according to Senate Minority Leader Franklin Drilon on Tuesday.

"I am glad that COA finds merit in our proposal for a special audit of Philhealth considering the gravity of the situation and the consequences if we fail to address the matter with urgency," he said.

"What we have found out so far could just be the tip of the iceberg. We do not know how deep it is. We do not know how far it is and how prejudiced the actuarial life of Philhealth is," he stressed. Drilon said that he talked to COA Chair Michael Aguinaldo, who registered no opposition to his call for a special audit of Philhealth funds and disbursements and even recommended an accurate review of the actuarial life of Philhealth.

"We urge COA Chairman Aguinaldo to sit down with Philhealth President and chief executive officer Ricardo Morales to discuss the conduct a special audit in order to determine the true state of financial health of the agency tasked to provide health care protection to all Filipinos," Drilon said.

"They should come up with mechanisms on how to facilitate the special audit and eliminate hindrances that prevent internal auditors from performing their tasks," he said.

Without the cooperation of Philhealth, Drilon said that COA internal auditors will face limited access to pertinent documents and information.

"The COA internal auditors faced some difficulties before in accessing documents from Philhealth, so we could not get the whole picture," he said.

Drilon urged Philhealth to cooperate to prevent corruption, irregularities, overpayment, and nonpayment of claims from happening again.

"I urge Philhealth to provide full support to COA special audit. We all agree that a special audit is something that must be done to determine the true state of financial health of the agency and its viability to cover for medical expenses of millions of all Filipinos in the next 10 years or so," Drilon said.

Drilon said warned of serious consequences once Philhealth fails to pay hospitals, particularly public hospitals relying on the agency to reimburse for their services to the poor.

"There will be a chain reaction. The regional hospitals, especially public hospitals, cater to the poor through their maintenance and operating budget. If Philhealth does not reimburse them, the problem will become worse because they will not be able to serve the poor. It is really a very difficult problem," Drilon said.

The senator said that Aguinaldo also agreed that there is a need for an accurate study of the actuarial life of Philhealth, given that the agency has been in an operating loss for the past five years to the tune of P26 billion.

On top of it, the agency has outstanding P48 billion in unpaid claims, Drilon noted.

Drilon said that Aguinaldo also proposed to strengthen the actuarial department in Philhealth, saying the agency is open to tapping professionals to help them review the actuarial life of Philhealth.

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