Forward0
By: Joy Aceron and Victoria Maglanque*
It is accurate to say now that the country is facing a crisis amidst the COVID19 outbreak. From having only 3 cases last week to now 33 - and counting. From the claim made by the health secretary himself of Philippines being a model country on COVID-19 response[1] to a country that has just declared a state of health emergency.[2]
As it seems, the Philippine health sector is ill-prepared for the COVID19 outbreak. This is not surprising after budget cuts, corruption allegations, politicization of health governance and political leadership’s focus on security and order going after opposition, activists and poor drug offenders.
Health services deteriorating even before COVID-19
Late last year, it was reported that the health budget was cut by 10 billion in the 2020 general appropriations.[3] This is despite of emerging threats of measles, polio and dengue outbreaks, which could be serious health emergencies. Last year too, there have been reports that health services in the Philippines have become more unaffordable and inaccessible.[4]
It is therefore not a surprise that the first Global Health Security index by Economist’s Intelligence Unit, the Johns Hopkins Center for Health Security and the Nuclear Threat Initiative showed that the Philippines scored zero in a total of five health security indicators, namely: (1) Linking public health and security authorities, (2) Communication with healthcare workers during public health emergency, (3) Dual-use research and culture of responsible science, (4) Biosafety, (5) Joint External Evaluations and Performance of Veterinary Services.[5]
Yesterday, Duque admits the inadequacy of supplies and test kits negatively affects the country’s ability to effectively respond to COVID19.[6] Lack of proper and up-to-date health facilities and equipments, as well as serious understaffing, are putting a strain on the health care system. The estimated ratio of health care workers in the Philippines is 1 doctor per 33,000 patients and 1 hospital bed for every 1,121 patients. This is way lower than the recommended 1 doctor per 1,000 and 5 beds per 1,000 people ratio by the World Health Organization.[7],[8] “The already low health budget was further cut resulting in less medical supplies, poorly maintained medical equipment and understaffing. Even before COVID-19, the public health systems was already deteriorating,"[9] As it seems so far, how the government has responded to the COVID-19 outbreak is real-time evidence of why the Philippines scored 0 in the said Global Security Index.
While we are not surprised of the news about the deteriorating quality of health services in the country, we are nonetheless puzzled. This is because the health budget was supposedly benefiting immensely from a so-claimed successful fiscal reform called the Sin Tax that has added a whopping 348.2 Billion PhP to the health budget since[Joy1] 2014.
Sin tax significant addition to the health budget
Passed in 2012, the Sin Tax Law (or RA 10351) was passed (1) to generate additional revenue for health and (2) curb smoking and alcohol consumption by simplifying and increasing excise tax system on tobacco and alcohol.
Generally, all assessments show that the law has achieved its intended objectives. Positive gains have been reported by government and civil society so far on the impact of Sin Tax.
There has been an increase in health budget due to sin tax. DoH reports that 43% of the DOH Budget in 2018 is contributed by the Sin Tax. Increased revenues from the Sin Tax Law in 2013 have facilitated an unprecedented 57.3% increase in the 2014 national health budget, from PHP53.23-B in 2013 to PHP83.72-B in 2014. The bulk of the additional budget (PHP22.7-B) was allocated for the PhilHealth insurance coverage of the poorest families, benefitting around 24 million Filipinos.” (DOH data from AER, 2014) As a result, according to reports, there are more Filipinos, especially the indigents, covered by PhilHealth.[10]
Sin tax have been hailed as an effective tool to support health or a successful fiscal policy to achieve improved health outcomes.[11] The Campaign for Tobacco-Free Kids concludes in its 2017 study that “The Sin Tax Law has successfully reached its purpose of significantly simplifying the tax system, quickly reducing tobacco use, and raise high incremental revenue needed to fund universal health coverage—especially among the poor—as well as additional revenue for health and economic development programs.”
Data from the 2019 Sin Tax Law Annual Report shows that 55% of the budget of the Department of Health (DOH) has come just from sin tax revenues alone. This seems to mean that the decline in the health budget from the national government (on top of sin tax) has been dramatically decreasing, kept afloat only by sin tax.
Funds from sin tax should have helped Philippines prepared for COVID19
Revenues from sin tax are earmarked for specific programs 15% to LGUs, 85% to DOH and PhilHealth. From that 85%, 80% goes to universal health care expenditures (i.e. PhilHealth coverage; Strengthening of preventive health programs towards attainment of MDGs/SDGs; Health Awareness Programs; and Implementation Research to Support UHC). 20% for Medical Assistance; Health Facilities Enhancement Program (HFEP); and Service Delivery Networks.
Some of the programs where the sin tax revenues are supposed to go to are (1) the Health Emergency Preparedness and Response, (2) Epidemiology and Surveillance (3) Prevention and Control of Other Infectious Disease, and (4) Health Facilities Enhancement Program (HFEP) that primarily aims to upgrade health facilities and equipment. These are the very programs needed by the Philippine health sector in preparing well for health emergencies, like COVID-19.
The deteriorating state of public health sector, despite increase in its budget from a fiscal reform measure (sin tax), invites important empirical questions: what happened? where did the health budget from sin tax go?
An emerging lesson is that success of fiscal reform measures (such as sin tax) are only certain to be true once tested. Its development impact must be seen and proven at the service delivery or citizen-beneficiary level. Fiscal reforms outcome can only come into fruition, such as sin tax impact on health services, if budget increases are ensured to have resulted in better quality received by citizens. This needs a monitoring and assessment system from the national level (budget allocation) down to the beneficiary level. Without a working multi-level accountability system on public health service delivery, any additional budget (note: DoH/DoF is asking loan to effectively respond to COVID-19)[12][Joy2] could just go down the drain without making lives better for Filipinos. In the case of the ongoing COVID-19 outbreak, one indicative evidence of success of sin tax should have been a health system responding well to the emergency, providing quality health services to its citizens when they need it most.
References:
ABS-CBN News. (Feb. 27, 2020) PH is ‘model country in fighting COVID-19 epidemic: Duque. Retrieved from: https://news.abs-cbn.com/spotlight/02/27/20/ph-is-model-country-in-fighting-covid-19-epidemic-duque
Campaign for Tobacco-Free Kids. (2017). Tax Reform Case Study: Philippines. Retrieved from: https://www.tobaccofreekids.org/assets/global/pdfs/en/Philippines_Tax_Reform_Case_Study.pdf
Chanco, B. (July 5, 2019). Philippines healthcare unaffordable. Philippine Star. Retrieved from: https://www.philstar.com/business/2019/07/05/1932014/philippines-healthcare-unaffordable
De Vera, B. (March 5, 2020). PH eyes loan to stem COVID-19 impact. Inquirer.Net. Retrieved from: https://business.inquirer.net/291861/ph-eyes-loan-to-stem-covid-19-impact
Department of Health. (n.d.) Increasing Sin Taxes will save lives. Retrieved from: https://www.doh.gov.ph/node/16806
Esguerra, D.J. (March 9, 2020) DOH: Lack of test kits behind ‘underreporting’ of COVID-19 cases. Inquirer.Net. Retrieved from: https://newsinfo.inquirer.net/1239007/doh-admits-lack-of-test-kits-behind-unintentional-underreporting-of-coronavirus-cases
Gascon, M. (September 23, 2019). Funds for health cut by 10 billion. Inquirer.Net. Retrieved from: https://newsinfo.inquirer.net/1168031/funds-for-health-cut-by-p10-billion
Lopert, R. (August 20, 2019). The New Syntax of “Sin” Taxes: Framing Health Taxes toe Strengthen Public Finances and Advance Population Health. Center for Global Development. Retrieved from: https://www.cgdev.org/blog/new-syntax-sin0-taxes-framing-health-taxes-strengthen-public-finances-and-advance-population
Lopez, T. (June 29, 2018). High cost of medicines in Philippines. Manila Standard. Retrieved from: http://manilastandard.net/mobile/article/269233.
Luna, F. (November 4, 2019). Philippines Scored ‘0’ in 5 indicators on Global Health Security Index. Here’s why. Philippine Star. Retrieved form: https://www.philstar.com/headlines/2019/11/04/1965924/philippines-scored-0-5-indicators-global-health-security-index-heres-why/amp/
Merez, A. (March 9, 2020). Philippine declares state of public health emergency due to coronavirus. ABS-CBN News. Retrieved from: https://news.abs-cbn.com/news/03/09/20/duterte-declares-state-of-public-health-emergency-philippines-due-to-coronavirus
Santos, A.P. (February 18, 2020) Philippines ‘ill-prepared’ as it grapples with coronavirus threat. Al Jazeera. Retrieved from: https://www.aljazeera.com/news/2020/02/philippines-ill-prepared-grapples-coronavirus-threat-200218004321154.html
World Health Organization. (May 2015). “Sin Tax” expands health coverage in the Philippines. Retrieved from: https://www.who.int/features/2015/ncd-philippines/en/
Footnotes:
[1] ABS-CBN News. (Feb. 27, 2020) PH is ‘model country in fighting COVID-19 epidemic: Duque. Retrieved from: https://news.abs-cbn.com/spotlight/02/27/20/ph-is-model-country-in-fighting-covid-19-epidemic-duque
[2] Merez, A. (March 9, 2020). Philippine declares state of public health emergency due to coronavirus. ABS-CBN News. Retrieved from: https://news.abs-cbn.com/news/03/09/20/duterte-declares-state-of-public-health-emergency-philippines-due-to-coronavirus
[3] Gascon, M. (September 23, 2019). Funds for health cut by 10 billion. Inquirer.Net. Retrieved from: https://newsinfo.inquirer.net/1168031/funds-for-health-cut-by-p10-billion
[4] See Chanco, B. (July 5, 2019). Philippines healthcare unaffordable. Philippine Star. Retrieved from: https://www.philstar.com/business/2019/07/05/1932014/philippines-healthcare-unaffordable ; and Lopez, T. (June 29, 2018). High cost of medicines in Philippines. Manila Standard. Retrieved from: http://manilastandard.net/mobile/article/269233.
[5] Luna, F. (November 4, 2019). Philippines Scored ‘0’ in 5 indicators on Global Health Security Index. Here’s why. Philippine Star. Retrieved form: https://www.philstar.com/headlines/2019/11/04/1965924/philippines-scored-0-5-indicators-global-health-security-index-heres-why/amp/
[6] Esguerra, D.J. (March 9, 2020) DOH: Lack of test kits behind ‘underreporting’ of COVID-19 cases. Inquirer.Net. Retrieved from: https://newsinfo.inquirer.net/1239007/doh-admits-lack-of-test-kits-behind-unintentional-underreporting-of-coronavirus-cases
[7] Santos, A.P. (February 18, 2020) Philippines ‘ill-prepared’ as it grapples with coronavirus threat. Al Jazeera. Retrieved from: https://www.aljazeera.com/news/2020/02/philippines-ill-prepared-grapples-coronavirus-threat-200218004321154.html
[8] Luna, F. (November 4, 2019). Philippines Scored ‘0’ in 5 indicators on Global Health Security Index. Here’s why. Philstar. Retrieved form: https://www.philstar.com/headlines/2019/11/04/1965924/philippines-scored-0-5-indicators-global-health-security-index-heres-why/amp/
[9] Santos, A.P. (February 18, 2020) Philippines ‘ill-prepared’ as it grapples with coronavirus threat. Al Jazeera. Retrieved from: https://www.aljazeera.com/news/2020/02/philippines-ill-prepared-grapples-coronavirus-threat-200218004321154.html
[10] World Health Organization. (May 2015). “Sin Tax” expands health coverage in the Philippines. Retrieved from: https://www.who.int/features/2015/ncd-philippines/en/
[11] See Department of Health. (n.d.) Increasing Sin Taxes will save lives. Retrieved from: https://www.doh.gov.ph/node/16806; and Lopert (August 20, 2019) The New Syntax of “Sin” Taxes: Framing Health Taxes toe Strengthen Public Finances and Advance Population Health. Center for Global Development. Retrieved from: https://www.cgdev.org/blog/new-syntax-sin0-taxes-framing-health-taxes-strengthen-public-finances-and-advance-population; Campaign for Tobacco-Free Kids (CTFK) 2017.
[12] De Vera, B. (March 5, 2020). PH eyes loan to stem COVID-19 impact. Inquirer.Net. Retrieved from: https://business.inquirer.net/291861/ph-eyes-loan-to-stem-covid-19-impact
* Joy Aceron and Victoria Maglanque are from Government Watch or G-Watch (www.g-watch.org) that is currently developing for testing a multi-level monitoring tool that checks whether sin tax financing of health has improved health services at the barangay and citizen-beneficiary level.