HSRA Monograph No.

9 1
2 BRIDGING TO FUTURE REFORMS
 HSRA Monograph No. 9 3

HSRA Monograph No. 9

BRIDGING TO
FUTURE REFORMS

DEPARTMENT OF HEALTH
Republic of the Philippines
4 BRIDGING TO FUTURE REFORMS

Bridging to Future Reforms

Health Sector Reform Agenda Monograph No. 9
ISBN No. 978-971-92539-3-8

Published by the Department of Health-Health Policy Development and Planning Bureau (HPDPB)
San Lazaro Compound, Rizal Avenue, Sta. Cruz, Manila, 1003 Philippines.
TELEPHONE +632-781-4362 EMAIL healthmonographs@gmail.com. June 2010

The mention (if any) of specific companies or of certain manufacturer’s products does not imply that they are
endorsed or recommended by the DOH in preference over others of a similar nature. Articles may be reproduced
in full or in part for non-profit purposes without prior permission, provided credit is given to the DOH and/or
the individual authors for original pieces. A copy of the reprinted or adapted version will be appreciated.

Health Sector Reform Agenda Mario C. Villaverde, MD, MPH, MPM

Monograph Series Editorial Board Ma. Virginia G. Ala, MD, MPH
Lilibeth C. David, MD, MPH, MPM
Kenneth G. Ronquillo, MD, MPH
Orville C. Solon, PhD

Reviewer Alberto G. Romualdez, MD

Technical Editor Carlo Irwin A. Panelo, MD, MA

Technical Writers Frances Rose T. Elgo, MPH

Glenda R. Gonzales, MPH
Laurita R. Mendoza, SE, MPH

Contributors Leizel P. Lagrada, MD, MPH, PhD

Elizabeth R. Matibag, MD, MPH
Romulo F. Munsayac Jr., MM
Josephine A. Salangsang, MM
Marifel M. Santiago
Alma Lou A. dela Cruz, MM
DOH Media Relations Unit

Health Sector Reform Agenda Clarisse B. Reyes

Monograph Series Regina Sobrepeña, MD
Publications Management Team Dorie Lynn Balanoba, MD
Albert Francis E. Domingo, MD
Vida Zorah S. Gabe, MA

Copyediting Arvin Mangohig

Cover Design and Layout Ariel G. Manuel

Suggested Citation:
Bridging to Future Reforms. Health Sector Reform Agenda – Monographs. Manila, Republic of the Philippines -
Department of Health, 2010. (DOH HSRA Monograph No. 9).

Editorial assistance provided by Anna Cassandra S. Melendez, MA. Cover photograph by Paquito P. Repl ente.

The UPecon-Health Policy Development Program, a U.S. Agency for International Development Cooperating Agency (USAID CA),
provided technical assistance in the development of this document under the terms of Cooperative Agreement No. 492-A-00-06-
00031. The opinions expressed herein are those of the author(s) and do not necessarily reflect the views of the UPecon-Health Policy
Development Program or the U.S. Agency for International Development.
 HSRA Monograph No. 9 5

CONTENTS

Executive Summary 6

Overview of the Philippine Health System 8

Health Status of the Filipinos 8

Responsiveness of the
Philippine Health System 11
Equitable Health Financing 13

Top 10 News Events (2005 - 2010) 15

Implementation Framework for

Health Reforms: FOURmula One for Health 18

Health Financing 19
Health Regulation 22
Service Delivery 25
Good Governance 38

Appendix
Department of Health
Resolution No. 2009-03-01 44

References 47
6 BRIDGING TO FUTURE REFORMS

EXECUTIVE SUMMARY

Bridging to Future Reforms is a concise document that evaluates health sector

performance since the Fourmula One for Health program was launched as the
framework for implementing health reforms in the country in 2005. It also provides
a brief analysis of the remaining gaps and challenges and specifies
recommendations on how the Department of Health should lead the sector
towards a strategic direction. The next DOH administration can use this document
as a tool in firming up strategies for the next medium term to further the gains of
the health sector.
The health sector has, to a large extent, made significant progress in
implementing these reforms. However, present efforts are not enough considering
the challenges that still remain.
The increases in the DOH budget for the last three years and in the Official
Development Assistance (ODA) to support the implementation of reforms are
unprecedented. PhilHealth’s coverage stands at 82 percent of the entire Philippine
population; its benefit packages and accredited health facilities and service
providers continue to expand. However, the 2008 National Demographic and
Health Survey reported a much lower PhilHealth coverage of only 38 percent of
the population. The still increasing out-of-pocket expenditure calls for a thorough
study of the underlying causes for such increases despite ongoing reforms to
lower it.
The monumental enactment into law of two major pieces of legislation (RA
9502 “Universally Accessible Cheaper and Quality Medicines Act of 2008” and RA
9711 “Food and Drug Administration (FDA) Act of 2009”) strengthened DOH
regulatory and oversight functions. The implementation of Voluntary Drug Price
Reduction and Maximum Drug Retail Price and the expansion of Botika ng Barangay
outlets are important steps that will increase access of Filipinos to low-cost quality
essential medicine. Yet, the availability and acceptability of generic products and
low-priced medicines, the increasing pharmaceutical distribution networks in
hard-to-reach and conflict-afflicted areas, and the need to address irrational drug
use and to regulate non-essential health products and technologies are some of
the remaining regulatory issues that must be addressed.
 HSRA Monograph No. 9 7

The Basic/Comprehensive Emergency Obstetric and Newborn Care (B/

CEmONC) approach was adopted to reduce maternal and newborn deaths. The
rationalization of health facilities is being undertaken to ensure availability and
access to health facilities, with the right professionals based on the health needs
of the population which is complemented with investments to upgrade health
facilities. Still, the country has to put in a lot more effort to improve performance
on the Millennium Development Goals (MDGs) with just a few years remaining
before the deadline of 2015. Aggregate improvements in health outcomes hide
broad disparities across residence, education, wealth, and gender, which suggest
a lack of fairness in the performance of the health system. The inequitable
distribution of available health resources is the persistent barrier to equitable
access to health services. The health system’s biggest priority should therefore be
the elimination of variations in performance.
Improvements were made in the DOH systems and bureaucracy to strengthen
core public health functions through financing, auditing, and procurement reforms
that are more transparent and credible, and by monitoring performance and
evaluating outcome indicators. The local government units (LGU) were engaged
through the development of investment plans for health; their performance being
monitored through the LGU scorecard. However, the current systems in place are
not enough to fully improve the health system’s performance at the national and
local levels. A thorough study of the socioeconomic determinants of health is
needed to get a clearer picture of the underlying causes of health inequities,
varying performance, and health outcomes across the different levels of the
Philippine health delivery system.
The above issues, gaps, and recommendations were laid down to guide health
leaders and stakeholders on the path that the health sector needs to take in the
next medium-term. It is hoped that through the collaborative efforts of all
stakeholders, the strategies and interventions specified in this monograph can
serve its goal of achieving a better health system for all Filipinos.
8 BRIDGING TO FUTURE REFORMS

OVERVIEW OF FIGURE 1
Projected Life Expectancy at Birth by Sex,
THE PHILIPPINE Philippines, 1995-2005 (Medium Assumption)

HEALTH SYSTEM 74.0

74.0

.1
73
.8
72
.5
72.0

.2

72

.1
72
.9

73
.8
71
.6

72
.5
72.0

71
.3

.2

72
71
.0

72
.9
.7

71
HEALTH STATUS OF THE FILIPINOS

71
.6
70
.4
70.0

.3

71
.1

70

71
.0
70

71
.7
70
.4
70.0

70
.1
70
68.0
LIFE EXPECTANCY AT BIRTH. Filipinos are living

.8
67
.5
68.0

67
.2
.9

67

.8
66
.6

67
.5
longer, with a projected life expectancy at birth of 66.0

66
.3

67
.2
66
.0

.9

67
66
.7

66
.6
.4

65
66.0

.3

66
65
.1

66
.0
73.08 years for females and 67.83 years for males

.8

65

66
.7
64

65
.4
64.0

65
.1
65
.8
64
64.0
(NSO, 2008a). This is an improvement from the 62.0
projected life expectancy of 70.1 for females and 62.0
60.0
64.1 for males in 2000 to 2005. The life expectancy 60.01995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
of females has been consistently higher than males CalendarYears Male Female

Source: NSO, 2008a CalendarYears

(Figure 1). Source: NSO, 2008a

These average gains in life expectancy, however,

mask significant variations across regions. For
instance, for the 2005-2010 period, females in the
Ilocos Region could expect to live 14 years longer
than females in the Autonomous Region of Muslim
Mindanao (ARMM).
INFANT, UNDER-FIVE, AND MATERNAL
MORTALITY. Both the Infant Mortality Rate (IMR)
and Under-five Mortality Rate (U5MR) have
declined consistently over the past 15 years. The
IMR decreased from 34 infant deaths per 1,000 live
births in 1993, to 25 per 1,000 live births in 2008
(NSO, 1993a and NSO, 2008a). The three most
common causes of infant deaths are pneumonia,
bacterial sepsis, and disorders related to short
gestation and low birth weight. Meanwhile, the
U5MR declined from 54 deaths per 1,000 live births
in 1993 to 34 per 1,000 live births in 2008. The most
common causes of under-five mortality are
pneumonia, accidents, and diarrhea.
“Among under-five children, 75 percent of
deaths occur at infancy. More than 50 percent of
infant deaths occur during the neonatal period
(Figure 2). Almost 50 percent of neonatal deaths
occur during the first two days of life which reflects
a lack of fairness for neonates in the health system,”
state David and Geronimo (2008). The most
common causes of neonatal deaths are bacterial
sepsis of the newborn, respiratory distress of the
newborn, and disorders related to gestation and
low birth weight (Figure 2).

FIGURE 2
Infant Mortality Rate
by Age and Causes

Source: Department of Health, 2005

 HSRA Monograph No. 9 9

Maternal deaths account for 14 percent of all and Davao registered TFR, NMR, IMR, and U5MR
deaths in women aged 15-49 years. The country’s rates that were higher than the national average
Maternal Mortality Ratio (MMR) decreased from 209 (Table 1). In contrast, NCR, CALABARZON, and
per 100,000 live births between 1987 and 1993 Central Luzon registered rates which were equal to
(NSO, 1993b) to 162 per 100,000 live births in 2006 or lower than the national average. Regional
(NSO, 2006). As shown in figure 3, most maternal variations were also reported for MMR.
deaths occur within 0-1 day after delivery. Maternal
deaths are mainly due to complications occurring
TABLE 1. Total Fertility Rates for 3 Years
in the course of labor, delivery, puerperium,
Preceding the Survey, Early Childhood
hypertension, and postpartum hemorrhage. Mortality Rates for the 10-Year Period
Preceding the Survey, Philippines, 2006
FIGURE 3
Maternal Death After Delivery TFR NMR IMR UFMR
Philippine Average 3.2 13 23 31
2010 Target (NOH) 10 17 32
NCR 2.6 12 19 24
CAR 3.2 16 26 31
Reg. 1 3.0 15 26 30
Reg. 2 2.8 14 25 30
Reg. 3 2.7 13 19 22
Reg. 4A 2.9 13 19 24
Reg. 4B 4.1 19 34 45
Reg. 5 4.1 14 25 38
Reg. 6 3.3 11 18 25
0-1 2-7 8-14 15-21 22-30 31-42 Reg. 7 3.3 11 20 30
day days days days days days
Reg. 8 3.9 14 31 43
Source: X. F. Li et al., International Journal of Gynecology & Obstetrics Reg. 9 3.7 13 32 44
54 (1996): 1-10
Reg. 10 3.4 10 22 29

Aggregate improvements hide broad disparities Reg. 11 3.4 16 26 33

in health outcomes across residence (urban or Reg. 12 3.4 12 21 33
rural), educational attainment, wealth, and gender, Reg. 13 3.7 10 25 35
which suggest a lack of fairness in the performance ARMM 3.1 10 33 45
of the health system.
For instance, in 2003, the Total Fertility Rate LEGEND:
(TFR), IMR, U5MR, and Neonatal Mortality Rate
Attained 2010 Target
(NMR) were significantly higher in rural areas,
among women who had no education, and among Reached National Average or better
the poorest income quintile. Gender differences
were also evident in the IMR, U5MR, and NMR, with Attained lower than National Average
girls tending to fare better than boys.
Progress across regions has likewise been very Source: National Statistics Office, 2008
uneven. In 2006, MIMAROPA, Bicol, Eastern Visayas,
10
LEADING CAUSES OF MORBIDITY AND
MORTALITY. As in previous years, most of
the ten leading causes of morbidity in 2008
were communicable diseases. These
included acute lower respiratory tract
infection and pneumonia, acute watery
diarrhea, bronchitis/bronchiolitis,
influenza, pulmonary tuberculosis (TB), and
chicken pox. The morbidity rates for these
diseases have declined over the last couple
of years.
In contrast to the ten leading causes of
morbidity, the leading causes of mortality
in the country have mainly been non-
communicable diseases. Diseases of the
heart, diseases of the vascular system, and
malignant neoplasm were the three most
common causes of deaths. These made up
40.7 percent of total deaths in the country
in 2005. Meanwhile, deaths due to accidents
doubled from 21.5 per 100,000 population
in 1994 to 39.1 per 100,000 population in
2005. Men are four times more likely to die
from accidents than women, and accidents
are one of the two most common causes of
deaths among children 1-14 years (the other
one being pneumonia).
Pneumonia deaths have fallen by an
impressive 43.6 percent in a span of a
decade, from 86.4 per 100,000 population in
1984 to 42.8 per 100,000 population in 2005
(DOH, 2005). Deaths from all forms of TB have
also decreased by 40 percent in the last two
decades. These have resulted from more
aggressive infectious disease prevention
and control  and  improvements in  curative
care.
Although health outcomes in terms of
morbidities from TB, measles, and malaria
were good at the national level, many
regions continued to fare worse than the
national average (Table 2). For instance, in
2008, morbidity rates were higher than the
national average in three regions for TB,
nine regions for measles, and four regions
for malaria.
BRIDGING TO FUTURE REFORMS
Box 1. PERFORMANCE IN
HEALTH-RELATED MDGs
The country’s current health outcomes are best summarized
in the Philippines Midterm Progress Report on the Millennium
Development Goals (NEDA, 2007): “Halfway through the 2015
target year to achieve the Millennium Development Goals
(MDGs). The Philippines has made considerable progress
particularly in poverty reduction, nutrition, gender equality,
reducing child mortality, combating HIV and AIDS, malaria
and other diseases, access to safe drinking water and sanitary
toilet facility and access to drugs. However, the country needs
to work harder on MDG targets concerning universal access
to education, maternal mortality and access to reproductive
health services.”
The National Statistical Coordination Board (NSCB) reports
that the following indicators have a high probability of
achieving their target levels by 2015: prevalence of
underweight children under five years of age; U5MR and IMR;
prevalence/death rate associated with malaria; proportion
of TB cases treated/cured under the directly observed treatment
short course; proportion of population with sustainable
access to improved water source; and proportion of urban
population with access to improved sanitation.
Indicators with a low probability of reaching their targets
include the proportion of one-year-old children immunized
against measles; MMR; contraceptive prevalence rate; and
death rate associated with TB. Those with a medium
probability of achieving their targets are the percent of
households with per capita dietary energy less than 100
percent adequacy; proportion of births attended by skilled
health personnel; and prevalence of TB.
At the regional level, all seventeen regions are on track to
meet the target for U5MR. Majority of the regions are likely to
meet the targets for nutrition, IMR, access to safe drinking
water and access to improved sanitation. Only a few regions
are on track with regard to improving dietary energy intake
and reducing the MMR, while only one region has a middling
shot at meeting the target for contraceptive prevalence rate.
Although the overall health status of Filipinos has
improved, the Philippines continues to lag behind other nine
(9) countries in Southeast Asia in some major health
indicators. A look at health outcomes in ASEAN countries
reveals that the Philippines has the third highest total fertility
rate (TFR); the fourth highest infant mortality rate (IMR) and
under-5 mortality rate (U5MR); and the fifth highest neonatal
mortality rate (NMR), maternal mortality ratio (MMR), and
percentage of underweight under-five children.
 HSRA Monograph No. 9 11

TABLE 2. Morbidity Rates of Tuberculosis, RESPONSIVENESS OF THE

Measles and Malaria per 100,000 Population, PHILIPPINE HEALTH SYSTEM
by Region, 2008
UTILIZATION OF HEALTH SERVICES. Results from
TB Measles Malaria the National Nutrition Survey reveal that
household participation in most of DOH’s programs
Philippines 273.1 5.7 13.3
has been low (FNRI, 2008). Among the DOH
2010 Target (NOH) 137.3 0.1 15 programs included in the survey, participation rates
NCR 826.5 3.0 0.0 were highest in breastfeeding promotion, the
CAR 78.5 18.9 9.7 Expanded Program on Immunization (EPI), and
Operation Timbang. Among pregnant and lactating
Reg. 1 49.8 9.4 0.1
women, less than 50 percent participated in the
Reg. 2 85.4 5.6 51.2 tetanus toxoid immunization and nutrition
Reg. 3 176.9 8.4 8.5 counseling, although 100 percent of lactating
Reg. 4A 108.4 1.6 2.5 women participated in breastfeeding promotion.
More than 80 percent of children participated in
Reg. 4B 146.7 10.2 226.5
BCG, DPT, OPV, and Hepa B immunization, but only
Reg. 5 38.7 3.9 0.0 13.8 percent of newborns availed of the newborn
Reg. 6 222.3 3.4 0.1 screening service. A relatively high percentage
Reg. 7 607.3 8.6 0.0 (72.1 percent) of children 0-5 years old participated
in the Operation Timbang Program, but only about
Reg. 8 128.1 10.3 0.0
40 percent participated in the Growth Monitoring
Reg. 9 248.7 18.4 2.8
Program. The Deworming Program among children
Reg. 10 134.8 8.2 4.1 1-12 years old had a moderately low participation
Reg. 11 126 1.2 30.7 rate. Botika ng Bayan/ Barangay had a 33.9 percent
Reg. 12 575.1 0 22.8 participation rate.
Reg. 13 161.4 2.6 11 Of the Filipinos who sought medical advice or
treatment, 50 percent went to public health
ARMM 92.4 No data No data
facilities, 42 percent went to private health
facilities, and almost 7 percent sought alternative
LEGEND: or non-medical care. The most visited health facility
is the RHU/ Barangay Health Center (33 percent)
Attained 2010 Target
except in the NCR and CAR, where the majority
Reached National Average or better went to private hospital/clinic for medical advice
or treatment. The common reasons for seeking
Attained lower than National Average health care are illness or injury (68 percent),
medical checkup (28 percent), dental care (2
Source: DOH Field Health Service Information System, 2008 percent), and medical requirement (1 percent)
(NSO, 2008).
Most of the regions enjoyed a marked increase
in births attended by health professionals between
2003 and 2008, with the Visayas Region showing
the biggest improvement (figure 4). As expected,
considerable variations exist across regions: in
NCR, Central Luzon, and Ilocos, more than 80
percent of births were attended by skilled health
professionals; in ARMM, SOCCSKSARGEN,
12 BRIDGING TO FUTURE REFORMS

FIGURE 4 NCR

Births with Medical CAR

Attendance Ilocos

Cagayan Valley
2003
Central Luzon
2008
CA LABA RZON

M IM A ROPA

Bicol

West ern V isayas

Central V isayas

Eastern V isaya

Zamboanga Peninsula

Nort hern M indanao

Davao Region

SOCCSKSA RGEN

Caraga

A RM M
Source: NSO, 2008
0 10 20 30 40 50 60 70 80 90 100
P e rce nt

Zamboanga Peninsula, and MIMAROPA, on the
other hand, less than half of births had medical
attendance.
RESPONSIVENESS OF HEALTH SYSTEM.
Responsiveness is somewhat difficult to measure,
since there is very limited data on Respect for
Persons and Client Satisfaction on the health
system. The DOH is currently commissioning a
survey similar to the 2003 World Health Survey to
measure those indicators.
The current available data is on the average
travel time to health facility, which is 39 minutes.
Travel time is longest in ARMM (83 minutes) and
shortest in NCR and Northern Mindanao (both 28
minutes); longer in rural areas (45 minutes) than in
urban areas (32 minutes); and longest for persons
in lowest wealth quintile (47 minutes) and shortest
for those in the highest wealth quintile (35
minutes). Older persons seeking care (60+ years
old) have longer average travel times than younger
persons (NSO, 2008).
SATISFACTION WITH HEALTH FACILITIES. The
Social Weather Station reported that a majority of
Filipinos prefers to seek treatment in a government
hospital if a family member needs confinement.
This is particularly true in the case of low income
households. Affordability is the main reason for
going to a government medical facility, while
excellent service is the main reason for going to a
private medical facility (SWS, 2006).
The net satisfaction with services given by
government hospitals has slightly improved from
+30 in 2005 to +37 in 2006. Excellent service and
affordability are the main reasons for being satisfied
whereas poor service is the main reason for being
dissatisfied with the services given by government
hospitals (SWS 2006).
SATISFACTION WITH DOH AND PHILHEALTH.
Surveys by the Social Weather Stations (SWS) from
2005-2009, have revealed that net satisfaction
ratings for both DOH and PhilHealth have been
improving. There was a slight dip in net satisfaction
in 2006, following a change in DOH and PhilHealth
administrations, but ratings have improved steadily
in subsequent years.
In a 2006 survey by the SWS, 49 percent of the
respondents rated the government as successful
in providing health care for the sick. This is higher
than the average rating of 36 percent in other
countries.
 HSRA Monograph No. 9 13

EQUITABLE HEALTH FINANCING FIGURE 5

DOH Budget 2005-2010
Fairness in health care financing is reflected in
the level of out-of-pocket expenditures as a
percentage of total health expenditure, as well as
in the availability of prepayment schemes (whether
tax-based or as insurance). Lower out-of-pocket
expenditures and greater availability of
prepayment schemes imply fairer health care
financing. The ways in which risks are pooled, health
services are purchased, and government revenues
are collected all contribute to the level of out-of-
pocket expenditures and prepayment schemes.
Source: General Appropriations Act 2005-2010
The 2005 Philippine National Health Accounts
(PNHA) revealed that spending for health was
mostly from private sources (59.1 percent), of which FIGURE 6
48.4 percent were out-of-pocket expenditures Budget Allocation, DOH-Proper, 2005-2010
(NSCB, 2005). Prepayment schemes accounted for
only 51.67 percent of total health expenditure. More
recent data indicate that there has been very
minimal progress over the last few years. In 2008,
PhilHealth’s support value was only 36.29 percent
based on its claims. This suggests that health care
financing in the Philippines is highly regressive; this
is likely to reduce the poor’s access to health care,
particularly for illnesses with high costs of
treatment.
REVENUE COLLECTION. The objective of
revenue collection is to raise sufficient and Source: General Appropriations Act 2005-2010
sustainable revenues in an efficient and equitable
manner. This is to provide individuals with both a
basic package of essential services and financial FIGURE 7
protection against unpredictable catastrophic PhilHealth Premium Collections, 2005-2009
financial losses caused by illness and injury.
Health spending is financed from several
sources: tax revenues from national and local
governments, social health insurance, individuals
who spend for health through out-of-pocket
payments, and investor-based health maintenance
organizations that cover the employed sector.
However, health spending from tax revenues and
social health insurance should be maximized to
achieve fairer health financing.
In 2005, only 3.3 percent of the gross domestic Source: PhilHealth Annual Reports, 2005- 2009
product (GDP) was allocated for health, below the
WHO recommended amount of 5 percent of the
14
GDP. The national health budget comprised only
28.7 percent of total health expenditure in 2005.
On the other hand, the health budget more than
doubled from P9.73 billion in 2005 to P24.65 billion
in 2010 (Figure 5). Perhaps even more impressively,
the health budget increased by more than 100
percent between 1999 and 2010. This significant
increase in the health budget consequently
increased resource allocation for public health
services (Figure 6).
Social health insurance is another prepayment
scheme that protects people against catastrophic
health expenditures. Social health insurance
provided by PhilHealth financed only 11 percent of
the total health expenditure in 2005. However,
PhilHealth’s membership increased to 81 million,
covering 82 percent of the 2010 projected
population. Premium collections have also shown
a steady increase from P18.7 billion in 2005 to P25.98
billion in 2009 (Figure 7).
Additional budgetary resources for DOH and
PhilHealth are earmarked by RA 9334 or the Sin Tax
Law. The law provides that 2.5 percent of the
incremental revenues from excise taxes on alcohol
and tobacco products be allocated each to DOH and
PhilHealth starting January 2005 for five years. In
2009, at least P50 million was given to each agency
that covers the period of 2005 to 2008. The
PhilHealth share from the sin taxes revenues is for
meeting and sustaining the universal coverage of
the National Health Insurance Program. For DOH,
the revenues go to its disease prevention programs.
RISK POOLING. Risk pooling is essential for
providing risk protection; it aims to manage
revenues collected from taxes, health insurance,
and other sources in order to pay for the care of
those who become ill. Social health insurance is
one method of risk pooling.
Although increased enrolment in PhilHealth has
improved risk pooling, premium payments remain
highly regressive. Contributions of government and
private employees are set at 2.5 percent of the
employee’s monthly salary. This premium payment
is progressive until it reaches a salary cap of P50,000.
This means that employed sector members earning
higher than the salary cap will still pay a fixed
BRIDGING TO FUTURE REFORMS
amount of P15,000 per year, which is a small amount
compared to their capacity to pay. This is also true
for the Overseas Filipino Workers program, which
requires members to pay a flat rate of P900 per year,
regardless of actual income. The Individually Paying
Program and Sponsored Program members pay a
flat rate of P1,200 per year. However, the Sponsored
Program can only promote fairness in revenue
collection if the members are correctly and
adequately selected.
Another method of risk pooling would be
through the general budget funnelled to the DOH
and the Local Government Units (LGUs). Direct taxes
are the most progressive way to finance health
spending since they are linked to income levels,
but inefficiency in tax collection still poses a major
problem.
RESOURCE ALLOCATION AND PURCHASING.
Data from the 2005 PNHA revealed that 78.4 percent
of total health expenditure was used for personal
health care, which were largely curative and
hospital based. Public health care, generally for
preventive and promotive health services,
accounted for 11.5 percent of total health
expenditure, while administration and
management support for health services accounted
for 10 percent. To improve the allocative efficiency
of the DOH budget, the National Objectives for
Health (NOH 2000-2005) targets 20 percent public
health care expenditure for the year 2010.
PhilHealth’s most recent support value of 36.29
percent (based on 2008 claims) falls considerably
short of the NOH’s target of 80 percent. The delivery
of cost-effective and equitable PhilHealth benefit
packages is hampered by the lack of accreditation
in many rural health units (RHUs) which are more
accessible to the communities. In 2009, only 1,301
RHUs out of 2,226 (55 percent) were accredited,
while only 1,654 were accredited out of the 1,784
licensed hospitals (90 percent). Although the
number of PhilHealth accredited health facilities is
increasing, this is still below the NOH (2000-2005)
targets of 80 percent for rural health units and 100
percent for hospitals.

TOP 10 NEWS EVENTS
(2005-2010)*
Contributed by DOH Media Relations Unit
1. Influenza A (H1N1) - The virus was first detected
in Mexico and quickly spread to the United
States, Europe, and Asia. The virus was initially
called “swine flu” but after much research was
renamed Influenza A (H1N1) infection. The
Philippines had its first case on May 21, 2009
after WHO raised the alarm to Pandemic Level
6, which means the disease cannot be
prevented from crossing borders. Daily updates
were provided to media on the spread of the
virus. The promotion of simple hand washing
and the practice of cough/colds etiquette as
effective means of preventing the disease were
also intensified.
2. Typhoons Ondoy and Pepeng – The twin tropical
cyclones Ondoy and Pepeng (international
names Ketsana and Parma respectively) hit the
country in late September and early October
2009. Considered as the worst natural disasters
in the region since the East Asian tsunami of
2005, the two typhoons left a path of destruction
and misery after causing massive floods in many
parts of Metro Manila, Central Luzon, and the
CALABARZON regions as well as landslides in
the Cordillera, Ilocos, and Bicol Regions.
Thousands of families were affected and many
infants and children became vulnerable to
infectious diseases, malnutrition, and
premature deaths. Because of the lack of
adequate safe water and sanitation facilities in
destroyed communities and in evacuation
centers, the DOH advised all affected to practice
personal hygiene such as hand washing using
soap and water before eating and after toilet
use; wearing protective clothing to prevent
mosquito-borne diseases; and boiling of water
or using chlorine tablets. Mothers were also
advised to breastfeed.
* Hot issues captured by national media. Selection was based on public impact and length of media co verage. List updated by HPDPB.
HSRA Monograph No. 9 15
The number of leptospirosis cases and
deaths also increased after the typhoons
prompting the DOH to sign a MOA with private
hospitals which acted as referral centers for
leptospirosis patients who could no longer be
accommodated by the government hospitals.
3. Maximum Drug Retail Price/ Cheaper Medicines
– The bill to lower prices of lifesaving drugs and
medicines was finally approved by both the
Senate and Congress and was enacted into law
despite the lobbying of big pharmaceutical
companies to block its passage. Prices of
selected drugs were reduced by as much as 50
percent. A massive information dissemination
campaign was launched to inform every one of
the law and its benefits. Surprise inspection
trips of drug stores, including serving of cease
and desist orders to erring drug stores, were
conducted to show the government’s serious
intent.
4. Melamine-laced Milk and Milk Products – When
the government of China conducted quality
checks on its milk and milk products for possible
melamine contamination, local health
authorities quickly conducted their own
investigation like the surprise checks of several
supermarkets in Metro Manila. All milk and milk
products exported from China were tested for
melamine and the results announced to media.
Also, other local products from China were
tested to assure the public that all stocks in the
market were melamine-free.
5. Ebola Reston – In January 2009, a local pig farm
worker tested positive for an Ebola virus strain
that is not deadly to humans. The farm worker’s
blood carried antibodies of the Ebola virus which
was first detected in laboratory monkeys in
1989 and had recently spread to pigs. WHO
expert Julie Hall said the antibodies indicated
that the worker was infected between 6 to 18
months before the virus was detected. Joint
press conferences were held by the DOH and
the Department of Agriculture to allay the
16
public’s fear for the safety of farm workers.
Similarly, farm visits by both Departments were
conducted to provide information to farm
workers. A depopulation of affected pigs was
done to assure that no further virus transfer
could occur.
6. Milk Code/ Breastfeeding – In November 2006,
mothers and breast milk advocates were
outraged by the letter of Thomas Donahue,
President and Chief Executive Officer of the USA
Chamber of Commerce, warning President
Arroyo on government’s position against infant
formulas. “It has been brought to my attention
that a recent regulatory decision by an agency
of your government would have unintended
negative consequences for investors’
confidence in the predictability of business law
in the Philippines,” Donahue wrote in a note
dated August 11, 2006.
Donahue was referring to the revised
implementing rules and regulations (IRR) of
Executive Order No. 51, or the Milk Code, which
limits the marketing of infant formulas and
requires companies to put labels on their
products warning the public of possible health
hazards. Health Secretary Francisco T. Duque III
described Donahue’s letter as a form of
“pressure” and “subtle blackmail.”
Malacañang stood its ground, not giving in
to international pressure. Words of
encouragement from all over the world poured
as the Philippines, represented by its health
secretary, put up a brave front against bullying
multinational pharmaceutical companies. Sec.
Duque stressed that the country, as a matter of
national policy, supports and promotes
breastfeeding and adheres to reasonably strict
standards for the entry of infant milk formula
products in the Philippines. The controversial
IRR underwent review by the Supreme Court
until the majority of the provisions of the IRR
was approved providing “broader” powers to
DOH, which include (1) a wider scope of coverage
of regulated products to include those for older
children; (2) the right to specify warnings such
as “There is no substitute for breast milk” and
BRIDGING TO FUTURE REFORMS
“Milk formula may contain pathogenic
microorganisms”; (3) a ban on company
involvement in scientific research and policy
making; (4) a ban on distributing company
information through health facilities; and (5) the
right to delete, reject, and prohibit false health
and nutrition claims.
7. Hospital Holiday/ Illegal Detention of Patients
– In May 2007, the Pharmaceutical and
Healthcare Association of the Philippines
(PHAP) objected to a new law that penalizes
hospital officials who refuse to release patients
due to unpaid bills. PHAP spokesman Dr. Rustico
Jimenez threatened that the group will push
through with hospital holidays, i.e., two to three
hospital holidays per month until December of
that year, if talks with DOH officials prove to be
unproductive. Further, PHAP members
nationwide said that they will only attend to
emergency cases to protest the implementation
of the new law.
The decision to defer the planned action of
the PHAP came following a dialogue with Health
Undersecretary Alexander Padilla, who also
invited the group to assist the DOH in drawing
up the rules and regulations governing the
implementation of Republic Act 9439.
8. Graphic Health Information on Tobacco
Packaging – In May 2010, the DOH issued an
Administrative Order (AO) requiring the use of
graphic health warnings on tobacco product
packages despite strong lobbying from the
tobacco industry to derail or stop its issuance.
The AO mandates all packages of tobacco
products to bear large, clear, visible and legible
full-color graphic health information on the
dangers of cigarette smoking on their front and
bank panels. Medical and health groups, legal
experts, women’s groups, and other various
civic organizations lauded the department’s
issuance of the AO citing that this would slow
down the increasing numbers of cigarette
smokers.
9. Advocacy for Condom Use – The distribution of
condoms is part of the DOH program to counter
the spread of STDs and the dreaded HIV/AIDS
 HSRA Monograph No. 9 17

virus. On Valentine’s Day, DOH distributed free

condoms to passersby. This triggered a series of
debates from two opposing civil society groups
on condom effectiveness and the moral issues
attached to it. Various church and other pro-life
groups condemned the act stating that
promotion of condom use promotes
promiscuity and is immoral and oppressive to
religious beliefs. On the other hand, the
Philippine Commission on Women hailed the
activity as a pro-active way of dealing with the
crisis and thus must be fully supported. Still,
Secretary Esperanza Cabral and the DOH are firm
on their advocacy and believe that condom use
will intensify the fight against HIV/AIDS in the
country.
10. Food/ Dietary Supplement Advertising – DOH
issued in March 2010 an AO mandating all
promotion of food and dietary supplements to
replace its current message or phrase “No
Approved Therapeutic Claim” to “Mahalagang
Paalala: Ang (Name of Product) ay hindi GAMOT
at hindi dapat gamiting panggamot sa anumang
uri ng sakit.” On May 28, the Manila Regional
Trial court issued a preliminary injunction order
temporarily stopping its implementation. This
was after the Chamber of Industries of the
Philippines, Inc. (CHIPI) complained about the
lack of consultation and due process in the
issuance of the AO. Further, CHIPI said that the
expanded message is inaccurate and that it
falsely presupposes that food/dietary
supplements do not have any therapeutic
health benefits. However, Secretary Cabral
reiterated that there is no need for consultation
since they are only translating the English
message into Filipino. As of this writing,
Secretary Cabral has said that the DOH will file
its opposition to the preliminary injunction
order.
18
IMPLEMENTATION
FRAMEWORK FOR
HEALTH REFORMS:
FOURmula One
for Health
The DOH took a bold leap
when Secretary Francisco
T. Duque III, upon his
assumption as Secretary of
Health in June 2005,
embarked on furthering
health sector reform through
the issuance of Administrative Order 2005-0023, or
FOURmula ONE for Health (F1). F1 is designed to
implement critical health interventions as a single
package, backed by an effective management
structure and financing arrangements. It engages
the entire health sector in the implementation of
health reforms to achieve better health outcomes,
create a responsive health system, and provide
equitable health financing.
F1 is built upon the experiences and lessons of
major health reform initiatives undertaken in the
last 30 years—from the Primary Health Care
approach in the late 1970s, to the Generics Act in
the late 1980s, the devolution of public health
system in the early 1990s, the National Health
Insurance Act of 1995, and the Health Sector Reform
Agenda (HSRA) conceptualized in the late 1990s. It
aims to achieve critical reforms with speed,
precision, and effective coordination to improve the
quality, effectiveness, equity, and efficiency of the
Philippine health system in a manner that is felt
and appreciated by all Filipinos.
F1 implementation is guided by seven rules of
engagement:
1. FOURmula ONE for Health (F1) organizes the
critical reform initiatives into four
implementation components, namely: Health
Financing, Health Service Delivery, Health
Regulation, and Good Governance. Flagship
programs, projects, and activities (PPAs) have
been defined for implementation at the
BRIDGING TO FUTURE REFORMS
national and local levels to better operationalize
each reform component.
2. The implementation of FOURmula ONE for
Health (F1) focuses on a few manageable and
critical interventions given available resources.
With sufficient groundwork and buy-in, these
interventions will trigger a reform chain
reaction, producing tangible results and
generating public support.
3. The reforms are implemented under a sector-
wide approach, encompassing a management
perspective that covers the entire health sector
and an investment portfolio that encompasses
all sources.
4. The National Health Insurance Program (NHIP)
serves as the main lever to effect desired
changes and outcomes in each of the four
implementation components. The main
functions of the NHIP—including enrollment,
accreditation, benefit delivery, provider
payment, and investment—are used to
leverage the attainment of the targets for each
component.
5. The functional and financial management
arrangements are defined in terms of specific
offices having clear mandates, performance
targets, and support systems within well-
defined time frames in the implementation of
reforms within each component.
6. The functional clustering of teams and
assignment of specific Team Leaders are meant
to facilitate implementation, monitoring, and
supervision in a coordinative manner. These do
not, in any way, prejudice the corporate nature
of the DOH-attached agencies or the autonomy
of LGUs.
7. The selection of FOUR-in-ONE Convergence
Sites is governed by the willingness of LGUs to
participate in F1 implementation, the presence
of highly feasible and sustainable local
initiatives or start-up activities relevant to F1
strategies, and the availability of funds from the
national government and external sources for
capital investment requirements.

HEALTH FINANCING
The goal of health financing reform in the
Philippines is to secure higher, better, and sustained
investments in health, to provide equitable access
to health care and ultimately improve health
outcomes, especially for the poor. The key
strategies are as follows:
MOBILIZING RESOURCES FROM EXTRA-
BUDGETARY SOURCES. Additional health resources
were mobilized by increasing revenue generation
capacities of health agencies and facilities.
Different regulatory agencies are allowed to retain
their income from regulatory fees and utilize these
for their operations. DOH hospitals retain 100
percent of their income from PhilHealth
reimbursements and private pay-patients. Data
from selected DOH hospitals showed more than a
100 percent increase in their income from 2003 to
2008.
Official development assistance from more than
ten development partners has reached US $747.8
million since 2005. These include projects in support
of the 2005-2010 Medium-term Philippines
Investment Program and the Millennium
Development Goals such as the Health Sector
Development Project (ADB-supported); National
Sector Support for Health Reform Project (WB-
supported); and the Health Sector Policy Support
Program (EC-supported).
HARMONIZING NATIONAL AND LOCAL HEALTH
SPENDING. The budget increase since 2008 was due
to the development of the Health Sector
Expenditure Framework (HSEF) in 2005. HSEF
defined the amount of resources available from the
national to the regional level and the corresponding
allocation to health programs and institutions. It
served as an input for the Department of Budget
and Management’s preparation of the Paper on
Budget Strategy for health beginning CY 2008 to
2010. Currently, HSEF for 2011-2013 is being
developed. At the local level, the Province-wide
Investment Plan for Health (PIPH) was developed
to provide a road map for the health investments
of provinces and its municipalities. DOH helps the
provinces to mobilize resources for this.
HSRA Monograph No. 9 19
DOH started adopting the Sector-wide
Development Approach for Health (SDAH) in 2005
where all health resources are pooled and allocated
rationally across all levels based on identified
priority areas. While the National Economic and
Development Authority recognized the health
sector’s achievements in coordinating donor funds,
not all donors have been integrated into the SDAH
framework. In the recently developed Process
Excellence for the Performance Governance
System, it is envisioned that 100 percent of key
stakeholders will adopt the SDAH.
A Health Care Financing Strategy Paper is also
being finalized to strengthen health system
reform, focusing on bottlenecks in health care
financing. It outlines the roles of each financing
agent within the strategy to achieve social
protection. It specifically recommends that the
national government through PhilHealth should
subsidize the poor while the local governments
should subsidize informal workers.
FOCUSING DIRECT SUBSIDIES TO PRIORITY
PROGRAMS THROUGH PERFORMANCE BASED-
BUDGETING. To direct subsidies to priority
programs, a performance-based budget for public
health was adopted in 2006. Performance-based
budgeting for public health prioritizes public health
programs that contribute directly or indirectly to
the attainment of desired health outcomes. Priority
health programs are identified based on burden of
disease, equity, economic efficiency, and cost
effectiveness, and are reviewed every two years.
A performance-based budget for hospitals was also
adopted in 2006 to improve the quality of hospital
services and promote optimum and efficient use
of limited hospital resources. In the budget, the
Maintenance, Operations, and Overhead
Expenditure (MOOE) is split into several releases
or tranches. The allocation scheme provides
performance incentives to motivate better
performance from hospital staff and encourage
proactive effective business and financial
management.
20
EXPANDING THE NATIONAL HEALTH INSURANCE
PROGRAM. PhilHealth’s coverage has increased
steadily. The Employed Sector Program had the
biggest slice of membership at 44 percent, with 8.91
million active members. The Individually Paying
Program (IPP), which includes self-earning
professionals and daily wage earners, had about
3.33 million members. The Overseas Workers
Program (OWP) had 2.10 million members while
the Non-Paying Program (Lifetime Members) had
0.46 million registered members. For the
Sponsored Program, 5.38 million members are
currently enrolled (PhilHealth Stats and Charts
2009).
PhilHealth benefit packages continue to expand
to cover more services and increase benefits to
members. An example of these are the expanded
coverage of normal spontaneous delivery of
maternity care packages, the outpatient malaria
package, and voluntary surgical contraception
procedures.
PhilHealth accreditation of health facilities also
continues to increase. As of 2009, 55 percent of RHUs
and 90 percent of DOH licensed hospitals were
accredited. PhilHealth likewise expanded the
accreditation of facilities from hospitals and RHUs
to other health facilities such as Maternity Care
Clinics, Ambulatory Surgical Clinics, and TB DOTS
Centers. Recently, midwives and dentists are also
being accredited by PhilHealth.
Challenges in Health Financing
1. Coverage of Vulnerable Population. Latest data
on PhilHealth’s coverage is reported at 82
percent. However, the 2008 National
Demographic and Health Survey reported only
38 percent of PhilHealth coverage. The
discrepancy in the data suggests that a thorough
reassessment of the social health insurance
coverage is needed.
Considering the large number of informal
workers in the country, membership to the
Individually Paying Program (IPP) is only at 3.33
million members in 2009. Voluntary enrolment
contributes to the low enrolment rate and the
BRIDGING TO FUTURE REFORMS
flat-rate premium contribution of its members
results in regressive risk pooling. Identifying,
categorizing for appropriate premium payment
scale, and enrolling them should be a challenge
to PhilHealth.
For the sponsored program, there are 5.38
million members in 2009. Budgetary constraints
and the evolving priorities of the local
government affect enrolment of indigents to
PhilHealth. As such, there is a need to intensify
PhilHealth’s campaign to encourage LGUs to
earmark funds for premium payments for
indigents. There is also a need to explore other
alternative sources of sustainable financing for
PhilHealth to expand the Program’s coverage,
including the enrolment of indigents as well as
the poorest members of the informal sector.
2. Inadequate total health expenditure. The
Philippines only spends 3.3 percent of its GDP
on health in 2005. A provisional estimate from
WHO showed that in 2008 this slightly increased
to 3.8 percent (WHO, 2010). Although there are
no guidelines on how much a country should
spend on health, WHO recommends a 5 percent
spending on health as most countries that have
achieved universal coverage spend at least this
much.
DOH can advocate for more resources through
the HSEF and the PIPH by using its subsidies to
LGUs as leverage to encourage more local health
investments. PhilHealth, on the other hand, can
increase the salary cap for employed sector
members and implement a tiered premium
contribution from the IPP and OWP members.
3. Limited financial risk protection. Financial
protection is established when individuals or
households are prevented from becoming
impoverished by the costs of utilizing health
care (WHO, 2000). In 2005, the prepayment
scheme from taxation and social health
insurance was only 39 percent of total health
spending while out-of-pocket expenditure
(OOP) was at almost 50 percent. Although there
is no recent available data, several papers
estimate that OOP is still in this range or higher.

Prepayment schemes are the most
efficient source of financing as it
provides financial risk protection
and safety nets to the population.
For PhilHealth, its financial
protection is closely related to two
things: its benefit package and its
purchaser-provider payment
scheme. Balanced with the range
of services offered by a tax-based
prepayment scheme, the basic
benefit package should include
services necessary to sustain and
promote good health, while
ensuring cost-effectiveness at the
same time. With the rise in
PhilHealth membership, additional
benefit packages should be
developed simultaneously for
promotive, preventive, as well as
rehabilitative care.
4. Purchaser-provider payment
scheme. In the purchaser-provider
payment system, the purchaser
compensates providers for the cost
of providing medical care to
PhilHealth members. Fee-for-
service (FFS) is the main method
of paying health care providers. In
some cases, FFS payment can
induce health care providers to
increase the price, volume, and
intensity of care. This results in
inefficient financial protection as
patients end up paying for medical
expenses above the benefit
ceiling. PhilHealth’s inability to
regulate physician’s fees also
allows health providers to charge
PhilHealth members with higher
prices.
5. Allocation of financial resources to
primary health care. The country’s
limited health resources should be
optimized by ensuring allocative
HSRA Monograph No. 9 21
BOX 2. WHERE HAVE ALL OUR MONIES GONE?
The Mystery of High Out-of-Pocket (OOP) Expenditure
Levels of out-of-pocket (OOP) health spending continuously
increased from 2000 to 2005 and are the largest source of health
care financing in the country. Recent data indicates that this hasn’t
improved despite the increased government and PhilHealth spending
and ODA assistance. Higher government spending, coupled with
PhilHealth’s increased coverage and benefit packages, generally
provides adequate public infrastructure and health service delivery
at subsidized cost. With these, OOP payments at the point of service
should be lessened. This is not the case in the Philippines. High OOP
has consequences for the utilization of health services and
subsequently health. This also undermines income generation and
may cause impoverishment especially for the poor.
High OOP in the country could be caused by one or all of the
following reasons:
1. Consumption of non-essential health products and services. There
is an increasing influx of non-essential health products and
services in recent years and their promotion is misleading
consumers. Purchase and use of these products which have no
therapeutic value increases OOP and should be regulated
(including their entry to the country, promotion, and
advertisement).
2. Expenditure on medicines and medical products. These constitute
the largest share of OOP in the Asia Pacific Region and in the
Philippines. Unavailability of subsidized and/or low-cost
medicines leads consumers to purchase these out of their pockets
from private for profit retailers. Evidence also suggests that more
than half of medical products are irrationally used. Sound health
regulation together with medicines policies could reduce this
significantly.
3. Unregulated purchaser-provider payment scheme. With the
current provider payment scheme (i.e., fee-for-service), health
care providers can increase the price, volume, and intensity of
profitable services and products such as diagnostics and
pharmaceuticals even if they are not needed. PhilHealth’s inability
to regulate hospital and physician’s fees allows them to charge
members with higher prices and thus increase OOP. This results
in patients, under stress and anxiety from diseases, being forced
to pay for medical expenses above the benefit ceiling which is
sometimes above their capacity to pay, especially for the poor.
The above reasons may cause high OOP spending for health.
However, studies to show these and their impact on coverage and
access especially among the low-income and vulnerable groups must
be conducted before government formulates health financing
strategies to address high out-of-pocket expenditures.
22
and technical efficiency as this has implications
on the access, cost, quality, and consumer
satisfaction. Essential health care and desirable
health interventions can be delivered at the
primary level. Moving towards this path has the
potential for large savings and cost
effectiveness. This will also strengthen the
gatekeeping role of the primary health facilities
which could improve referral system.
6. Regressive Risk Pooling. PhilHealth’s premium
payment system is still regressive as members do
not pay premiums according to their capacity to
pay (see discussion on risk pooling on page 14).
Recommendations
1. Achieving universal health insurance coverage.
Universal coverage goes beyond numbers.
Extending social health protection to the
uninsured, increasing the range of services
under coverage, and reducing payment at the
point of service delivery are the three technical
challenges of moving towards universal
coverage. Addressing these three dimensions
will ensure health for all and health equity.
2. Increasing investment and public health
spending. Allocation of 5 percent of GDP to
health will enable expansion of prepayment
schemes (to the insured and uninsured) and
increase safety nets for the poor and vulnerable.
However, improving allocative efficiency
through a functioning performance-based
budgeting and investing in primary health care
should also be done at the same time. Also,
external aid from development partners that
increases resources for health should be
sourced through alignment and harmonization
of overseas development assistance with
national priorities. 100 percent of key
stakeholders should therefore adopt SDAH.
3. Ensuring financial risk protection and improving
provider payment mechanisms. The current
fee-for-service (FFS) for hospitals limits
financial protection of members due to caps
that lead them to pay for “excess” fees which
sometimes lead to catastrophic health
BRIDGING TO FUTURE REFORMS
expenditure especially for the poor. Shifting FFS
to case payment and diagnostic related group
scheme, coupled with contracting with
providers to limit balance billing and increase
support value of PhilHealth benefits, will
ensure financial risk protection.
4. A package of essential health services. An
essential health care package at each level of
care must be clearly defined, cost estimated,
and designed, including the source of financing
and the provider payment mechanism. This
must also identify the complementary health
care package that may be offered by PhilHealth.
However, without sufficient and well-
distributed number of accredited health
facilities and health professionals to provide
these, it will be useless. Therefore, increasing
and distributing equitably the number of
accredited health service providers are also
essential.
5. Improving risk pooling from regressive to
progressive. Paying premiums based on
capacity to pay spreads the risks over all
members, consequently improving equity,
access, and financial protection. Premium
contribution of PhilHealth’s employed sector
members is only progressive until it reaches
the salary cap of P50,000. For IPP and OWP
members, premium payment is regressive as
they continue to pay a flat amount of P1,200
and P900 respectively per year regardless of
their capacity to pay.
HEALTH REGULATION
Health regulation reforms aim to ensure access
to quality and affordable health products, devices,
facilities, and services, especially those commonly
used by the poor.
HARMONIZATION AND STREAMLINING OF
REGULATORY PROCESSES. Strengthening
enforcement mechanisms and regulatory oversight
functions of the DOH were realized through the
passage of RA 9711 or the Food and Drug

Administration (FDA) Act of 2009 and the creation
of the National Center for Pharmaceutical Access
and Management (NCPAM). FDA Act of 2009 creates
four centers for: drug regulation and research; food
regulation and research; cosmetic regulation and
research; and the device regulation, radiation
health, and research (formerly the Bureau of Health
Devices and Technology). The NCPAM on the other
hand was created to further support the
implementation of the Universally Accessible
Cheaper and Quality Medicines Act.
The Harmonization and Streamlining of the
Licensure System for Hospitals in 2007 paved the
way for the simplification of the licensing system
for hospitals. Two policy directives were
formulated to realize this: (1) establishment of a
one-stop-shop for the licensure of health facilities
(its main feature is to issue a single license to
operate to hospitals, including ancillary services and
other facilities in a shorter period of time, i.e., 30
days for new applications and 5 days for renewal);
and (2) decentralization of appropriate regulatory
functions to regional offices and LGUs.
As part of the Department’s effort in
strengthening its enforcement mechanisms and
regulatory oversight functions, it recently issued
Administrative Order (AO) 2010-0013 requiring
graphic health information on tobacco packaging.
This is part of the government’s efforts to curb
tobacco use and reduce its large socioeconomic
costs from health care expenditures and
productivity losses which are estimated at P200
billion. The size of the graphic health information
would occupy no less than 30 percent the upper
portions of each tobacco product packet of the front
panel and 60 percent of the back panel.
AO 2010-0008 was also issued changing the use
of the phrase “no approved therapeutic claim” in
all advertisement, promotional, and/or
sponsorship activities or materials concerning food/
dietary supplements. All advertisements of food/
dietary supplements will now carry the message in
Filipino stating: “Mahalagang Paalala: Ang (name
of product) ay hindi gamot at hindi dapat gamiting
panggamot sa anumang uri ng sakit.”
HSRA Monograph No. 9 23
SEAL OF APPROVAL SYSTEM. To increase demand
for health care and influence consumer behavior,
the DOH has developed and implemented a unified
“seal of approval” system for health products,
devices, facilities, and services. Technical assistance
for the development of an overall framework for
the seal of approval for the three regulatory
bureaus of DOH (FDA, Bureau of Health Facilities
and Services or BHFS, and Bureau of Health Devices
and Technology or BHDT) was approved by the WHO
in the first quarter of 2008.
FDA developed a Seal of Approval System that
combines the requirement for a license to operate
and certificate of current Good Manufacturing
Practice (cGMP) for the production of
pharmaceutical products consistent with guidelines
in the ASEAN region. In September 2008, twenty-
eight (28) cGMP compliant companies were
awarded quality seals or certificates proving that
they are of international standards.
PhilHealth has also developed three new
accreditation standards for health care
organizations which serve as the basis for hospital
accreditation starting 2010. These standards are the:
Center of Safety, Center of Quality, and Center of
Excellence.
INSTITUTIONALIZATION OF COST RECOVERY
AND REVENUE ENHANCEMENT MECHANISMS. The
Bureau of Quarantine is allowed to retain and
utilize at least 50 percent of its income, by virtue of
RA 9271 of 2004. In 2006, the BHFS began
implementing a rationalized schedule of fees for
the regulation of health facilities. BHFS also
continues to implement the provision of the
Hospital Licensure Act that allows it to retain funds
collected from permits to construct, register, and
license to operate fees for hospitals and other
health facilities covered by the Act. The FDA and
BHDT will also restructure their regulatory fees
based on actual administration costs. RA 9711 or
the FDA Act of 2009 seeks to make the FDA a
financially autonomous institution, by giving it
authority to retain all its derived income, in
addition to its annual budget.
24
IMPROVING THE AVAILABILITY OF AND ACCESS
TO LOW-COST AND QUALITY ESSENTIAL MEDICINES
AND OTHER HEALTH COMMODITIES. The signing
into law of Republic Act (RA) 9502 or The Universally
Accessible Cheaper and Quality Medicines Act of
2008 marked a milestone in efforts to reduce the
prices of medicines. Pursuant to this RA, an
Executive Order was signed in July 2009 that
imposes maximum retail drug prices for selected
drugs and medicines in all public and private retail
outlets. Also, a resolution that implements
voluntary price reduction for at least 16 molecules
or 41 drug preparations resulted in a 50 percent price
cut for medicines treating hypertension, diabetes,
influenza, hypercholesterolemia, cancer, arthritis,
goiter, allergies, and infections.
The DOH has stepped up efforts to promote high
quality generic pharmaceutical products among
producers, distributors, retailers, medical and
dental practitioners and consumers. DOH has
expanded the P100 Project, which are drug
packages prescribed, dispensed, and sold at 100
pesos or less to the public. The Botika ng Barangay
(BnB) and Botika ng Bayan (BNB) were established
to provide the market with low-cost essential drugs
and medicines. On average, these outlets sell
medicines that are 62 percent cheaper than the
leading drugstore chain’s lowest selling price (based
on 2001 prices). Currently, there are more than
15,000 BnBs and more than 1,900 BNBs nationwide.
DOH also continued to identify alternative
sources of low-priced and quality essential drugs
and medicines. The Philippine International
Trading Corporation sustained its Parallel Drug
Importation of cheaper drugs and medicines in a
bid to make local manufacturers reduce the market
prices of their drugs and medicines. The Philippine
Institute of Traditional and Alternative Health Care
is also increasing the production and development
of new herbal medicines which are distributed to
DOH-retained hospitals, BnBs, and the Department
of Education.
BRIDGING TO FUTURE REFORMS
Challenges in Health Regulation
1. Availability and acceptability of generic
products and low-priced medicines. Recent
price reductions are a big step towards
improving access to affordable medicines for
diseases that account for the leading causes of
morbidity and mortality. However, there are
other factors which affect access to affordable
medicines: availability of affordable medicines,
and consumer awareness and usage of generics.
In some pharmacies, particularly government
hospitals, generic products and low-priced
medicines are not available. If they are, some
consumers still prefer high-cost, branded
medicines.
2. Pharmaceutical distribution network problems.
At present, there is 1 BnB for every 2.8
barangays, close to the DOH target of 1:3.
However, hard-to-reach areas like those in the
Autonomous Region of Muslim Mindanao have
the least number of BnB outlets. For the P100
project, only 70 DOH hospitals and 16 LGU
hospitals are currently selling P100 treatment
packages.
3. Irrational drug use. At present, there is no
concrete framework that addresses irrational
drug use. Initiatives such as the P100 Project and
regulations which disallow doctors to dispense
medicine are but a few strategies to rationalize
drug use. Interventions that seek to address
client behavior regarding drug use, particularly
self-medication and overuse of over-the-
counter drugs, are still inadequate.
4. Non-essential health products, Non-essential
health products such as nutriceuticals that
promise improvement in organ or body
functions have grown rapidly in recent years and
have become easily available in the market.
Consumption of such products increases out-
of-pocket expenditures of households on non-
therapeutic products. Although these products
are registered with the FDA as food
supplements, they are mistakenly advertised
as being sufficient to prevent organ or body
malfunction.

5. Enforcing the new provisions of the health
regulatory agencies. Regulation of health
facilities is currently limited to the licensing of
individual facilities. As such, government is
unable to control the cost of health services
provided by the private sector. This may lead to
spiraling health care costs, which would further
compromise social protection.
Limited funding and human resources have also
made it difficult for the regulatory agencies to
fulfill their functions. Quasi-judicial powers or
“police” powers to enforce laws are also lacking.
This encourages hospitals or other health
facilities to operate without a license.
Recommendations
1. Increase acceptability and availability of quality
and cheaper medicines. BnBs, BNBs, and the
P100 Project should be strategically expanded
and their promotion to both doctors and
consumers strengthened.
2. Curb irrational use of drug. A framework to curb
irrational drug use needs to be institutionalized
and operationalized. Over-the-counter drugs in
sari-sari stores or small outlets and the sale of
non-essential drugs should be regulated.
Monitoring of doctors buying from medical
representatives and doctors dispensing drugs
should be conducted.
3. Regulate non-essential health products.
Policies on the regulation of non-essential
health products such as nutriceuticals are still
wanting. Control of regulated product
advertisements to reduce the risk of misleading
and biased promotional information reaching
consumers and professionals should be
tightened. An AO was recently issued to
regulate these products’ advertisements and
this should be strictly implemented and
monitored.
4. Enforce regulatory function guidelines of DOH
agencies. Enforcing the implementation
guidelines of the DOH regulatory agencies is
critical and crucial in strengthening its functions.
Current initiatives such as the implementation
HSRA Monograph No. 9 25
of the one-stop-shop from the national to the
regional level should be regularly monitored for
its efficiency, user-friendliness, and the
turnaround time for new applications and
renewals. Also, monitoring of the
implementation of the cheaper medicines act,
the graphic health information on tobacco
packaging, and the change in food/dietary
supplements promotion should be regularly
conducted and reported.
The regulation of hospital and professional fees,
health professionals, and regulation of the
industry as a whole instead of regulating
individual health facilities should be
strengthened.
SERVICE DELIVERY
The persistence of wide disparities in health
outcomes across gender, age, regions, and income
groups underscores the remaining gaps in the
availability and accessibility of health care services
in the Philippines. For this reason, Health Service
Delivery was highlighted as one of the key reform
areas in F1. F1 seeks to improve the accessibility
and availability of basic and essential health care,
particularly to the poor.
Substantial investments were provided for the
Service Delivery component of F1 to ensure the
attainment of its objective. The budget allocation
for service delivery more than doubled between
2005 and 2009.
ENSURE THE AVAILABILITY OF BASIC AND
ESSENTIAL HEALTH SERVICES. Service packages for
priority health programs such as Malaria Control;
Maternal, Newborn, and Child Health; and the
National Tuberculosis Program were developed.
Health services network were also established to
facilitate access to health facilities at different
levels of care. Some examples would be the
Maternal, Newborn, and Child Health and Nutrition
(MNCHN) health facility network which includes the
Basic Emergency Obstetric and Newborn Care
(BEmONC) and Comprehensive Emergency
Obstetric and Newborn Care (CEmONC), and the
26
laboratory network for infectious diseases such as
TB and malaria.
The rationalization of service delivery aims to
provide access to the right facilities in the right
places with the right professionals, based on the
health needs of the population. To rationalize
health systems, provinces analyzed their health
needs and resources and are expected to deliver
ouputs that are benchmarked against DOH
standards. All these must be reflected in each
province’s health facility rationalization plan.
At present, sixteen F1 priority provinces, one
roll-out province (Albay) and one volunteer
province (Occidental Mindoro) have completed
their rationalization plans. The rationalization plans
are linked to the Province-Wide Investment Plans
for Health (PIPH) and the Annual Operations Plan
(AOP) and serve as a basis for the rational fund
allocation of the Health Facilities Enhancement
Program.
There is a 38% increase in the number of
PhilHealth accredited health facilities from 2005 to
the 1st quarter of 2009 while accredited health
professionals increased by 7%.
Encouraging successes were observed at the first
16 F1 provinces with high levels of PHIC
accreditation which suggest adequacy in
infrastructure and competency of health human
resources. Many health centers and RHUs are OPB
and TB-DOTS accredited. Many are also preparing
to have MCP and newborn package accreditation.
(EC Technical Assistance, 2009)
ASSURE THE QUALITY OF BOTH BASIC AND
SPECIALIZED HEALTH SERVICES. Patient Safety was
institutionalized as a fundamental principle of the
health care delivery system. Guidelines or
standards have been developed or updated to
ensure the quality of diagnosis, case management,
and treatment. The Continuing Quality
Improvement (CQI) Program Committee was
established in DOH hospitals to sustain
improvements in the quality of health care services.
To date, all DOH-retained hospitals have a
functional CQI Program and Committee.
BRIDGING TO FUTURE REFORMS
Meanwhile, trainings on service delivery (both for
routine health care and emergency) have been
conducted to improve the capacity of health
workers. The National Voluntary Blood Services
Program (which regulates blood banks and ensures
an adequate supply of safe blood) closed all
commercial blood banks in the country, and
rationalized more than 200 blood service facilities.
It also centralized the testing in selected blood
centers.
Guided by the principles of F1, the Government
Hospital Upgrading Project under the DOH’s Health
Facilities Enhancement Program (HFEP) is being
pursued to rationalize and upgrade health facilities
nationwide. Its objectives are to: (1) upgrade
government hospitals from primary to secondary
level, thereby decongesting tertiary hospitals,
improving the gatekeeping function of primary care
facilities, and making them base hospitals for
nursing students and nursing affiliation; (2) upgrade
secondary level hospitals to tertiary level, to make
them referral hospitals in their catchment area; (3)
provide BEmONC or CEmONC services, to further
reduce maternal and neonatal mortality rates; (4)
help government hospitals comply with DOH
licensing and PhilHealth accreditation standards,
to ensure that they provide quality and appropriate
services that are responsive to the health needs of
the catchment population; and (5) further upgrade
selected DOH Medical Centers and Regional
Hospitals for specialty/subspecialty services to
become end referral regional specialty centers.
Between 2007 and 2009, about Php4.5 Billion
was invested in upgrading national and local
government hospitals, Barangay Health Stations
(BHS), and RHUs nationwide.
The establishment of ILHZs is important for the
district health system to work in a devolved setup.
These ILHZs serve as the focal point in converging
catchment areas, allowing them to participate in
providing quality, equitable, and accessible health
care though inter-LGU partnership and cooperation.

INTENSIFY EFFORTS TO REDUCE PUBLIC HEALTH
THREATS, PREVENT AND CONTROL COMMUNICABLE
AND NON-COMMUNICABLE DISEASES AND
MINIMIZE HEALTH RISK-TAKING BEHAVIORS. The
DOH implemented disease-free zone initiatives,
intensified disease prevention and control
strategies, strengthened maternal and child health
programs, and enhanced health promotion and
disease surveillance activities.
a. Improving Reproductive Health Outcomes
The Save the Children Report 2007 rated the
Philippines as having the best child health care
program out of 55 developing countries. Senate
Resolution No. 77 dated 28 May 2008
commended the Department of Health for its
exemplary efforts in providing our country with
the best child health care.
A recent UNICEF report states that the
Philippines is among the 10 priority countries
making good progress towards the reduction of
child and maternal mortality (UNICEF, 2008).
Infant and under five mortality rates are
decreasing and have a high probability of
attaining the MDG targets by 2015. However, the
reduction is decelerated by the very slow
decline of the neonatal mortality rate.
There has been a consistent decline in
fertility in the past 36 years. The total fertility
rate (TFR) declined from 6 children per woman
in 1970 to 3.3 children per woman in 2006.
However, this is still relatively high compared
to other countries in Southeast Asia (NSO, 2008).
The Philippines is the twelfth most-populous
country in the world (PRB, 2008).
Knowledge of family planning is universal
since almost all women know at least one
method of family planning. However, it is not
translated into high contraceptive use. The CPR
has changed slightly over the last decade. The
use of both modern and traditional methods has
increased, although there has been no
improvement in modern contraceptive use in
the last five years (NSO, 2008). Improving the
availability and affordability of family planning
HSRA Monograph No. 9 27
methods, including NFP methods, remains a
major challenge in health service delivery.
The government has been advocating the
enabling of couples and individuals to decide
freely and responsibly for the number and
spacing of their children (Responsible
Parenthood) and to have the information and
means to carry out their decision (Informed
Choice). However, the equivocal support of the
government for the population program and the
non-appropriation of the national government
for family planning commodities are proofs that
the issues of the role of population in
development remain unresolved (Orbeta,
2006). The government has focused on the
promotion of natural family planning methods
through the Responsible Parenthood-Natural
Family Planning program (RP-NFP) of the
Commission on Population. The provision of
family planning commodities is left to the Local
Government Units through the Contraceptive
Self-Reliance Strategy (AO No. 158 s. 2004).
MMR has slightly improved, but is still far
from the 2015 target of 52 per 100,000 live births.
The low CPR and high MMR indicate that there
must be some ambiguities and deficiencies in
the reproductive health policy that must be
addressed.
b. Disease-Free Zone Initiatives
The number of malaria-free provinces has
increased from 14 provinces in 2004 to 22
provinces out of 58 endemic provinces in 2008.
This surpasses the target of 18 provinces for
2010. The newly declared malaria-free provinces
are Albay, Marinduque, Sorsogon, Western
Samar, Eastern Samar, and Surigao del Norte.
The other malaria-free provinces are Benguet,
Cavite, Masbate, Catanduanes, Iloilo, Guimaras,
Biliran, Capiz, Aklan, Cebu, Bohol, Siquijor,
Northern Samar, Northern Leyte, Southern
Leyte, and Camiguin.
Although the country has generally attained
leprosy elimination targets at the national and
regional levels, pockets of cases remain. Of the
28
remaining endemic cities/municipalities, two
highly prevalent cities (Osamis City and
Oroquieta City) have achieved elimination
level.
In 2008, five out of 28 schistosomiasis-
endemic provinces achieved elimination level,
with prevalence below 1 percent for the past
five years. These are Bohol, Zamboanga del
Norte, Davao del Sur, Surigao del Sur, and Sultan
Kudarat.
Of the 42 provinces where filariasis is
endemic, Southern Leyte and Sorsogon were
declared filariasis-free.
Siquijor is the first province to be declared
rabies-free.
c. Intensified Disease Prevention and
Control Program
The Philippines performed well in terms
of TB case finding and case holding, compared
to the average global performance in 2007.
Deaths from all forms of TB have also decreased
by 40 percent in the last two decades. Over the
last six years, the TB case detection and cure
rates have increased. Based on the 2007 National
TB Prevalence Survey, “the burden of the TB
disease has declined over the past ten years
since the launching of the DOTS program.”
However, the 2010 targets for TB prevalence and
mortality rate have yet to be achieved. The
increasing MDR-TB and XDR-TB cases were a
major challenge of the National TB Program.
The Philippines is one of the few remaining
countries in Asia with low HIV prevalence. At
present, HIV prevalence is already described as
“expanding and growing” from the previous
“low and slow” and “hidden and growing”
phases. According to a recent study, an HIV
epidemic is likely to emerge in the Philippines
(Farr and Wilson, 2010). One hundred twenty
(120) confirmed new cases were recorded in
March 2010 alone which is roughly equivalent
to three to four cases per day. The prevalence
of higher-risk sexual intercourse is high among
young, sexually active women age 15-24; is more
BRIDGING TO FUTURE REFORMS
prevalent among women in urban areas and in
the National Capital Region; and increases
directly with level of education and wealth
status (NDHS, 2008). The prohibition of national
procurement of condoms, relatively high cost
of condoms, and other sociocultural factors
contribute in the only slight increase in the
condom use, which is one of the effective
interventions against HIV.
Dengue has become a year-round threat,
and cases continued to increase due to climate
change, poor water disposal, and urbanization.
The dengue mortality rate, however, has
remained low, since hospitals have the
capability to provide supportive treatment.
The Philippines has remained bird-flu free,
while Influenza A(H1N1) cases have been
effectively controlled and managed. In a June
2009 SWS Survey, the DOH garnered a high
satisfaction rating (78 percent) for its effective
response against Influenza A(H1N1). It also
received a commendation from the WHO for its
“swift and tireless” efforts in responding to the
emerging threat.
d. Healthy Lifestyle and Management of
Health Risks
The Philippines is one of 23 countries that
account for around 80 percent of the total
mortality burden attributable to chronic
diseases in developing countries and 50 percent
of the total disease burden caused by non-
communicable diseases worldwide (Abegunde
et al., 2007). Morbidity and mortality rates from
almost all non-communicable diseases have
increased.
Access to safe water supply and sanitary
toilet facility has not improved; in 2008, there
was a decline in the proprotion of households
with access to safe water and sanitation.
e. Enhancing Health Promotion and Surveillance
The Philippine Integrated Disease
Surveillance and Response (PIDSR) was
introduced as a strategy to harmonize all existing
 HSRA Monograph No. 9 29

disease surveillance systems and strengthen diseases. Advocacy and social mobilization
LGUs’ capacity to perform disease surveillance involving various stakeholders included the
and response. This is in compliance with conduct of partners’ meetings and special
International Health Regulation 2005, which events for priority programs. The DOH began
requires the reporting of certain disease increasing investments in paid airtime for radio
outbreaks and public health events to help the and TV and space for print, to ensure that the
international community prevent and respond public is properly informed about important
to acute public health risks that have the DOH campaigns, programs, health emergencies,
potential to cross borders. The PIDSR includes and other health issues. The total budget for
reports from DOH, LGUs, and private health health promotion was dramatically increased by
facilities. 300 percent between 2005 and 2009.
The 2008 Revised List of Notifiable
Diseases, Syndromes, Health-Related Events,
and Conditions was adopted. The revised list
forms the basis for reporting not only notifiable
diseases but also syndromes, health-related
events, and conditions that are of public health
importance.
LGUs’ capacity for surveillance and
response was enhanced through capability
building on the Guidelines to Establishment of
Epidemiology and Surveillance Units and roll-
out trainings to all Regional Epidemiology
Surveillance Units (RESUs) in 2008. RESU
networks in 64 provinces were monitored and
assessed for functionality in 2009.
Health Promotion for Behavior Change was
developed as a new framework for advocacy. It
identified the three main audiences of the DOH,
namely: (1) legislators, policymakers, and Local
Chief Executives, to harness the necessary
support for priority health programs in terms of
policy and funding; (2) health workers,
professional organizations, and lobby/interest
groups and other partners, to influence some
decisions in favor of health beneficiaries and
clients; and (3) individuals and families, to adopt
healthy behaviors and participate in health
actions in their communities.
Health promotion and communication
plans for priority health programs were
developed and revised. The national risk
communication guidelines were also developed
for emerging and reemerging infectious
30 BRIDGING TO FUTURE REFORMS

TABLE 3. Progress of Indicators of Disease Free Zone Initiatives

Indicators 2010 Targets Baseline data and source Latest status and source

Number of provinces 13 Malaria-free 13 malaria-free provinces 22 malaria-free provinces

declared as malaria-free provinces Source: DOH Administrative Source: NCDPC, 2009
5 more declared as Reports, 2004
malaria-free

Number of provinces and Prevalence rate of Five provinces and eight Two cities with less than
cities with less than one case less than one case cities with prevalence of one case of leprosy per
of leprosy per 10,000 per 10,000 more than one case of 10,000 population.
population population in five leprosy per 10,000 Source: NCDPC, 2009
provinces and eight population
cities Source: NCDPC, 2004

Number of provinces with 9 provinces 0 province 5 provinces

schistosomiasis prevalence Source: NCDPC, 2004 Source: NCDPC, 2008
rate of less than one percent
for five consecutive years

Number of provinces with 6 provinces 0 province 2 provinces

prevalence rate of less than Source: NCDPC, 2004 Source: NCDPC, 2008
one case of filariasis per
1,000 population

Number of provinces with 7 provinces 0 province 1 province

less than 0.5 case of rabies Source: DOH, 2006 Source: NCDPC 2008
per million population

LEGEND:

Attained 2010 target or better

Better than the baseline

No improvement or poorer than the baseline

 HSRA Monograph No. 9 31

TABLE 4. Progress of Indicators of Intensified Disease Prevention and Control

Indicators 2010 Targets Baseline data and source Latest status and source

Morbidity rate of Tuberculosis 137.3 174.6 273.0

per 100,000 population* Source: Field Health Source: Field Health
Service Information Service Information
System, 2000 System,, 2008

Mortality rate of Tuberculosis 19.6 36.1 29.8

per 100,000 population* Source: DOH, 2000a Source: NSO, 2005

TB Case detection rate of 70% 61% 75%

sputum positive cases* Source: DOH, 2002 Source: DOH and TDFI,
2008

TB Cure rate of sputum positive 85% 85% 88%

cases* Source: DOH, 2002 Source: DOH and TDFI,
2008

Prevalence of HIV per 100,000 Less than one case 0.03 0.0168%
population per 100,000 Source: FHSIS 2003 Source: DOH-NEC
population estimates

Condom use rate * 3% 1.9% 2.3%

Source: NSO, 2003 Source: NSO, 2008

Incidence rate of dengue Less than 10 DHF 13 DHF cases 14.5 DHF cases
hemorrhagic fever (DHF) cases cases Source: FHSIS 2004 Source: DOH, 2008
per 100,000 population 1.7%
Source: National

Percentage of deaths from Less than 1% Epidemiologic Sentinel 0.9%

dengue hemorrhagic fever Surveillance System, 2004 Source: DOH, 2008
(DHF) over the number of cases
(as percent) of dengue

Avian Flu Case fatality rate Less than 10% - 0 cases

Source: DOH

Influenza A H1N1 case fatality Less than 10% - 0.6%

rate Source: Influenza A
(H1N1) Surveillance
Progress Report

LEGEND:

Attained 2010 target or better

Better than the baseline

No improvement or poorer than the baseline

32 BRIDGING TO FUTURE REFORMS

TABLE 5. Progress of Indicators of Healthy Lifestyle and Management of Health Risks

Indicators 2010 Targets Baseline data and source Latest status and source

Mortality rate from vascular Less than 63.2 63.2 63.8

diseases per 100,000 deaths Source: Philippine Health Source: : Philippine
population Statistics 2004 Health Statistics 2005

Mortality rate from COPD per Less than 20.8 20.8 24.58
100,000 population deaths Source: Philippine Health Source: : Philippine
Statistics 2004 Health Statistics 2005

Mortality rate from diabetes Less than 14.1 14.1 21.63

mellitus per 100,000 Source: Philippine Health Source: : Philippine
population Statistics 2004 Health Statistics 2005

Mortality rate from all forms Less than 47.7 47.7 48.92
of malignant neoplasm per deaths Source: Philippine Health Source: : Philippine
100,000 population Statistics 2004 Health Statistics 2005

Morbidity rate from heart and Less than 65.7 cases 65.7 36.4
vascular diseases per Source: FHSIS, 2006 Source: DOH, 2008
100,000 population

Prevalence rate of 13.9% 22.5% 25.3%

hypertension Source: National Nutrition Source: FNRI 2008
Survey 2003

Prevalence rate of adults with 2.1 % 3.4% 4.8%

high fasting blood sugar Source: National Nutrition Source: FNRI 2008
Survey 2003

Percentage of households 94% 89.3% 88.9%

with access to safe water Source: National Source: National
supply * Demographic and Health Demographic and Health
survey 2003 survey 2008

Percentage of households 91% 85% 65.8 %

with sanitary toilet facility* Source: National Source: National
Demographic and Health Demographic and Health
survey 2003 survey 2008

LEGEND:

Attained 2010 target or better

Better than the baseline

No improvement or poorer than the baseline

 HSRA Monograph No. 9 33

TABLE 6. Progress of Indicators of Improving Reproductive Health Outcomes (Child Health)

Indicators 2010 Targets Baseline data and source Latest status and source

Neonatal mortality per 10 deaths 17 deaths 13 deaths

1,000 live births Source: NSO, 2003 Source: NSO, 2006

Infant mortality per 1,000 17 deaths 29 deaths 25 deaths

live births* Source: NSO, 2003 Source: NSO, 2008

Under five mortality per 32 deaths 40 deaths 34 deaths

1,000 live births* Source: NSO, 2003 Source: NSO, 2008

Proportion of children 50% 33.5% 34%

under 6 months that are Source: NSO, 2003 Source: NSO, 2008
exclusively breastfed

Percent of underweight 21% or less 27.6% 26.2%

children under 5 years old* Source: FNRI, 2003 Source: FNRI, 2008

Coverage of fully 95% in every 69.8% 79.5%

immunized children (FIC) barangay Source: NSO, 2003 Source: NSO, 2008

Percentage of one-year old 95% in every 69.8% 84.4%

fully immunized against barangay Source: NSO, 2003 Source: NSO, 2008
measles*

Mortality rate of 33 deaths 66.11 deaths 37.99 deaths

pneumonia among under 5 Source: DOH, 2000A Source: NSO, 2005
year-old children

LEGEND:

Attained 2010 target or better

Better than the baseline

No improvement or poorer than the baseline

34 BRIDGING TO FUTURE REFORMS

TABLE 7. Progress of Indicators of Improving Reproductive Health Outcomes (Maternal Health)

Indicators 2010 Targets Baseline data and source Latest status and source

Maternal Mortality Ratio per 90 172 162

100,000 live births* Source: NSO, 1998 Source: NSO, 2006

Total Fertility Rate 2.1 3.5 3.3

Source: NSO, 2003 Source: NSO, 2008

Contraceptive Prevalence 80% 48.9 51%

Rate* Source: NSO, 2003 Source: NSO, 2008

Modern natural and artificial 60% 33.4% 34%

contraceptive prevalence rate Source: NSO, 2003 Source: NSO, 2008

Pregnancy rate among 5% 7% 10%

young women Source: NSO, 2003 Source: NSO, 2008
(15-19 years old)

Percentage of deliveries 70% 37.8% delivered in health 43.8% delivered in

assisted by skilled birth facilities
attendants and in a health 59.8% assisted by skilled
facility* birth attendants (doctors,
nurses, and midwives)
Source: NSO,2003
health facilities
61.8% assisted by
skilled birth attendants
(doctors, nurses, and
midwives)
Source: NSO,2008

LEGEND:

Attained 2010 target or better

Better than the baseline

No improvement or poorer than the baseline

Challenges in Health Service Delivery

1. Challenges In Health Outcomes
Despite the gains that have been made, greater
effort must be exerted to further improve health
outcomes. Reducing the MMR and NMR, addressing
the emergence of TB-MDR cases, reducing HIV
rates, reversing the trend in non-communicable
diseases, and addressing the persistence of
infectious diseases as leading causes of morbidity
are some of the challenges that the health sector
will continue to face in the coming years.
Variations in health outcomes, and challenges
in reaching the poor and the vulnerable, also
require attention. Available data reveal significant
regional differentials in health outcome indicators.
Although malaria is no longer on the Philippines’
top 10 leading causes of morbidity in 2008, some
regions still have malaria on the list - specifically
Regions 2, 4-B, and 12. Rabies is still prevalent in
Regions 1 and 7. Schistosomiasis is still high in
Regions 8, 9, and Caraga (DOH, 2008). Neonatal
mortality rate is highest in MIMAROPA, followed
by CAR and Davao. Infant and under-five mortality
rates are highest in MIMAROPA, ARMM, and
Zamboanga.
Recent data also reveal that both residence area
and educational level are still critical determinants
of access to health services. People living in rural
areas have a lower percentage of births delivered
in a health facility than in the urban areas. Women

of higher educational attainment tend to deliver in
a health facility than women of lower educational
backgrounds. The same observations are true for
the FIC. The contraceptive prevalence rate of non-
poor married women was higher by 5 percent than
poor married women (FPS, 2006).
Persistent gaps in the availability of quality
essential health services. Many regions and areas
continue to have substandard health facilities and
equipment. Almost 65 percent of hospital beds are
in Luzon but almost 50 percent of these are in NCR,
the population of which comprises only 22 percent
of Luzon’s total population. ARMM, Region 6, and
Region 7 are the top three regions with the fewest
PhilHealth accredited hospitals in relation to their
population size, while Regions 3, 4A, and NCR have
the highest number of PhilHealth accredited
hospitals. The increase in the supply of health
professionals, particularly nurses, has no
corresponding plantilla positions in the LGUs. The
maldistribution of health professionals is evident
across regions since majority of health
professionals are in NCR, Central Luzon, and
CALABARZON. There is a serious shortage of
specialists like anesthesiologists in many LGU
hospitals (EC Technical Assistance, 2009).
The monitoring of performance and capability
to ensure compliance by laboratory and health
provider networks are weak. Variations in the
quality of diagnosis and treatment are still evident
in all levels of care. The rise in Influenza A H1N1
and leptospirosis cases revealed inadequacies in
most hospitals’ capacities to respond to health
emergencies and outbreaks. This has also led to
congestion in a few capable hospitals.
Challenges remain in achieving universal access
to health care. The distribution of available health
resources contributed to inequitable access to
health facilities, human resource, and health
services. The average time to reach a health facility
in ARMM is thrice that of the average time in NCR.
The isolated and displaced population and
indigenous groups still have poor access to health
services. While the segment of the population with
the worst health outcome has already been
identified, service packages and strategies to
HSRA Monograph No. 9 35
improve access of those special groups are few or
even not yet in place.
Substantial proportion of the population (26
percent) bypassed lower levels of care. Although
limited in number (half is located in NCR), tertiary
level hospitals continue to admit and receive
referrals of primary cases. Data on PhilHealth
reimbursements of hospital admissions reveal
persistently high levels of ordinary cases treated
by highly specialized health facilities (Caballes,
2009). As yet, there is no policy on the gatekeeping
function of primary health care facilities which
would ensure that primary cases are managed at
the lower level of care.
According to Caballes (2009), “Hospital
autonomy may have improved the fiscal status of
hospitals but its impact is not yet measured in
improving patient accessibility to hospital
services.” Almost half of total health expenditures
come from out-of-pocket spending. PhilHealth only
covers 11 percent of the total health expenditure
(NSCB, 2005). While there are different PhilHealth
benefit packages, members have a low awareness
of these benefits. This is one of the main factors
leading to low utilization of the Out-Patient Benefit
package. PhilHealth-accredited RHUs are still few
and PhilHealth-accredited hospitals are
concentrated in economically progressive
localities, depriving the poor from the far-flung
areas to access. The urban poor might have
geographical advantage but financial capacity
remains the biggest barrier to access to health care.
Cultural barriers to health care also persist. A
segment of the population still relies on untrained
birth attendants or hilots and herbal doctors or
albularyo for their health. More than a third of births
are assisted by hilots. This is more evident in rural
areas than in urban areas (NSO, 2006).
2. Issues On The Implementation Of Strategies
a. Varying LGU support and capacity to
implement health policies and programs. The
implementation of national health programs
at the local level has become complex due to
devolution. Although some LGUs have
36
accepted the challenge with minimal
assistance from the national government, a
majority have limited financial and technical
capacity to manage health within their
catchment areas. Some local chief executives
prioritize projects with results that can seen
by their constituents. Some LGUs are unaware
of the kind of health services that LGUs
should deliver. For instance, RHUs in Ilocos
Sur have not been providing communicable
and non-communicable control services
because health workers assumed that such
programs were the responsibility of the DOH
(Bueno, 2008).
b. Variations in treatment outcomes, such as
treatment failures and multi-drug resistant
cases, resulting from privately provided care
and self-medication. About 40 percent of
patients with TB symptoms consult private
physicians. As much as 19 percent self
medicate and go directly to pharmacists.
Pharmacy personnel are typically untrained
and unlicensed; as a first line of health care
provision, they are therefore likely to
mismanage diseases like TB, leading to drug
resistance, disability, or death. Many private
sector providers do not comply with the NTP
guidelines. They still rely on chest x-rays,
with inconsistent prescriptions among many
outlets (David and Geronimo, 2008).
c. Weaknesses in the design of health policies
and programs:
Fragmented implementation of strategies.
Strategies tend to be developed and
implemented independently, without
establishing complementarities with other
health programs. Planning, costing, data
collection, training, and monitoring are done
programmatically, even though there are
areas for collaboration and integration.
There are many capacity building activities
for implementing policy, but these are less
organized and systematic. Health workers
were taken away repeatedly from their
workstations to attend different kinds of
training. Health providers in government
BRIDGING TO FUTURE REFORMS
health facilities for the most part were
engaged in training and administrative work.
d. Public-private partnership is confined to a
few programs and components in the health
system. Efforts to harness the private sector
and strengthen performance and risk
management among private providers are
still deficient. This is reflected in the
conspicuous lack of targeted subsidies and
the absence of a system for monitoring the
performance of private providers. There
have been no studies on the advantages and
risks of private sector involvement in health
programs, and no plans have been laid out
to manage their involvement. As such, in
most cases, the private sector operates
independently of the public sector, once
licensing, accreditation, and certifications
are dispensed (David and Geronimo, 2008).
e. Current health promotion efforts seem to be
less effective. There is still a need to promote
awareness on priority health programs. For
instance, 94 percent of Filipinos have heard
of AIDS, but only 53 percent have adequate
knowledge of HIV prevention (NSO, 2008).
Eighty-six percent have heard of TB, but of
this number, almost 60 percent believed that
TB was transmitted by ingestion; only 34
percent knew that TB is transmitted by
inhalation (DOH and TDFI, 2008). The
promotion of behavioral changes to
encourage the adoption of a healthy
lifestyle must likewise be intensified.
Majority of the Filipinos have unhealthy
habits, and behaviors such as smoking have
increased. The prevalence rate of tobacco
smoking among adolescents aged 13-15
years increased from 15 percent in 2003 to
22 percent in 2007 (DOH, 2007). Healthy
behaviors, such as exclusive breastfeeding,
are very low (34 percent) despite the
existence of the strong policy (Executive
Order 51 or Milk Code).
One of the identified weaknesses in current
health promotion efforts is the lack of a
mechanism for obtaining client feedback as

input to the design and implementation of
health promotion activities. In addition,
communication channels are sometimes
inappropriate for reaching underserved
communities; health messages sometimes
fail to adapt to local needs and culture,
because the messages are developed at the
national level by the DOH (David and
Geronimo, 2008). Finally, a multitude of
stakeholders develop and disseminate
health messages that are sometimes
inconsistent with DOH’s own policies,
guidelines, and advocacy content.
f. Information essential for decision-making
and policy-making is insufficient, caused by
either the lack of data or insufficient
processing or analysis. Knowledge-based
decision-making at the subnational level is
even weaker. While there is a huge amount
of data being generated at all levels, very
little is made accessible to the DOH. At the
same time, choosing data for decision-
making can be confusing, since one indicator
can have several sources. This underscores
the extent of fragmentation in health
information (David and Geronimo, 2008).
g. Current health system has failed to
effectively apply health interventions.
Infectious disease interventions have been
hindered by (1) difficulties in procuring and
managing large volumes of public health
goods to ensure access in peripheral outlets;
and (2) the presence of private providers
that remain unregulated and unmanaged
(David and Geronimo, 2008).
Recommendations
1. The health system’s biggest priority should be
eliminating variations in performance. This is
crucial to attaining equity in health outcomes.
There is a need to prioritize interventions and
to channel resources into remote areas that are
lagging behind the national average and are
unable to meet health targets, and address the
needs of vulnerable populations such as the
disabled, the adolescents, the indigenous
HSRA Monograph No. 9 37
people, the elderly, people in difficult
circumstances, and the urban and rural poor.
2. Sustain efforts to achieve the country’s MDG
commitments and ensure equity in the
availability of and access to health services. This
involves sustaining the MNCHN strategy,
intensifying the implementation of the
strategies for nutrition, child health, TB, HIV,
malaria, sanitation, and increasing access to low
cost quality drugs. More specifically:
a. Push for MNCHN Policy localization, to
include facility upgrading/capacity/
functionality, skills development,
appropriate staffing, adequate financing,
and demand generation. Explore the
inclusion of reproductive health
commodities such as contraceptives as
public health goods.
b. Pursue disease-free zone initiatives and
strengthen disease surveillance
mechanisms. The national government must
invest in the MDA and treatment drugs.
c. Strengthen multiyear budgeting to pursue
reduction of priority diseases such as TB and
HIV-AIDS. This will help identify financing
requirements and reduce procurement
delays.
d. Implement the Water Roadmap, finalize the
Sanitation Roadmap, effectively utilize the
Php1.5 Billion fund for waterless
municipalities, and revisit the Sanitation
Code.
3. Intensify efforts to reduce the morbidity and
mortality due to Non-Communicable Diseases
by developing a well-defined service delivery
package per level of care; strengthening
regulatory mechanisms for tobacco, alcohol, fast
food, and food labeling as regards nutritional
content, and the implementation of the
Executive Order 51 or the Milk Code; sustaining
registries in coordination with the appropriate
professional organizations; and intensifying
promotion of healthy lifestyle and supportive
environment. The following unique features of
NCDs must be addressed by the program: (1)
38
the limitation of definitive treatment, the
lifelong duration of management and the
extensive self management involved; (2) the
multidrug regimens, drug interactions, and drug
costs that have to be regulated; 3) the acute
attacks and exacerbations from failed
prevention, financial barriers in access to acute
care, and financial risks that must be addressed
by adequate financing; and (4) the co-
morbidities requiring coordination by various
providers and teams that must be managed by
proper governance infrastructure (David and
Geronimo, 2008). The rising trend of injury/
accidents and mental health problems must
also be addressed.
4. Adequate and effective assistance must be
provided to LGUs based on the PIPH or the AOP.
These could be in the form of comprehensive
and enforceable service packages and training
packages, the establishment and upgrading of
national reference centers for quality assurance,
and the creation of expert groups.
Comprehensive service packages would specify
a set of services for each level of preventive
and hospital care, for both the public and private
sectors, as well as for the interlocal health zones
(ILHZ) and the external sector, when necessary.
The packages would include guidelines on
quality practice, focusing on the life cycle
approach and special groups within the
population. Performance-based grants and fund
transfers to public health must be effectively
used as incentives for better performance. A
customized facility or mechanism for providing
technical and logistic support to ARMM and
geographically isolated and disadvantaged
areas (GIDA) could be developed to improved
health outcomes.
5. Develop a unifying health facility blueprint
which covers both public and private health
facilities. It should define the direction not only
for hospitals but also for laboratories, blood
banks, and other health facilities. It should aim
for the strengthening of gatekeeping function
of lower level facilities, creation of Centers of
Excellence for Specialty Hospitals and
BRIDGING TO FUTURE REFORMS
development of quality assurance mandatory
mechanism for public outpatient facilities
(RHUs/BHS) among others. Revisit policy on
performance-based financing for hospitals and
ensure implementation of hospital scorecard.
6. Reinforce the Technical Leadership of DOH
Central Office and CHD as Health Expert/
Management Specialist. The DOH must not be
public sector-centric but should have a more
inclusive and sector-wide perspective. Capacity
development is necessary for DOH to fulfill its
emerging roles and functions in facilitating
health reform initiatives, particularly with
regard to leveraging resources for health
outcomes and managing private sector
components of programs. The DOH must be able
to improve organization of public health
program packages (services, logistics, skills/
availability of providers). Areas for integration
must be identified and clear mechanisms must
be established for their operationalization.
Develop an integrated system for the collection
and publication of hospital and public health
statistics from public and private health
facilities.
GOOD GOVERNANCE
Good governance in health refers to the
enhancement of stewardship functions and the
improvement of management and internal support
systems, both at the national and local levels, to
better respond to the needs of the health service
delivery system.
Governance aims to improve the performance
of the Philippine health system through the
following strategies: (1) improving governance in
local health systems, by establishing effective
interlocal health zones (ILHZs), referral networks,
and resource sharing schemes, and pursuing the
accreditation of ILHZ networks; (2) improving
national capacities to manage and steward the
health sector; and (3) developing rational and more
efficient national and local health systems.
Governance also seeks to improve management

support systems for procurement, finance and
management information.
INTEGRATED IMPLEMENTATION OF F1
COMPONENTS. The establishment of four-in-one
convergence sites was done through the
development and implementation of the Province-
wide Investment Plan for Health (PIPH) initially in
16 sites, followed by 21 more sites in 2007 and a
nationwide roll-out in 2009. This partnership,
forged between the Secretary of Health and the
governor of a province is meant to rationalize local
health systems and harmonize support from the
National Government (NG) and development
partners. It is accompanied by a Service Level
Agreement (SLA), which sets the benchmark for
LGU achievements to guide the provision of grants
and variable tranche from the DOH. A total of
Php1.6 Billion for the 16 initial PIPH implementation
sites were allocated by the NG with the support
from the European Commission, 80 percent of
which have been given as fixed tranche and 20
percent as performance grant under the SLA.
The DOH also formalized its partnership with
the Autonomous Region in Muslim Mindanao
(ARMM) through a Memorandum of Agreement
(MOA) signed on April 23, 2009, covering the
allocation, release, and utilization of DOH resources
which will be used by DOH-ARMM to implement
projects under ARMM’s five-year investment plan
for health (AIPH). This includes a Php17 Million
start-up fund financed by the DOH, with an
estimated total cost of Php6.2 Billion.
As of this writing, the rest of the provinces are
already developing their PIPH. Eight cities are also
preparing their own citywide investment plans for
health (CIPH).
IMPLEMENTATION OF SECTOR DEVELOPMENT
APPROACH FOR HEALTH. AO No. 2007-0038 sets the
guidelines for implementing the Sector
Development Approach for Health (SDAH), a system
for harmonizing and improving the
implementation of development assistance by
strengthening donor coordination. It provides for
the harmonization of donor agencies’ procedures
with Philippine Government procedures, and
consolidates resources from various sources, to
HSRA Monograph No. 9 39
facilitate effective resource management at the
provincial level. The SDAH principles have been
applied to: (1) the Joint Assessment and Planning
Initiative (JAPI), which assesses F1 implementation
in convergence sites and identifies issues and
remaining gaps; (2) the creation of the Joint
Appraisal Committee (JAC) to review and appraise
the PIPH, and Annual Operational Plans of all F1
convergence sites; and (3) the Health Partners
Meeting (HPM), which appraises donors on the
SDAH and F1 implementation.
A Technical Assistance Coordination Team (TACT)
was created to harmonize technical assistance to
DOH by various partners operating under the SDAH
thus, reducing duplication of efforts and enhancing
complementarities among technical assistance
groups by ensuring that technical assistance
providers and their outputs are responsive to the
needs of the health sector.
Bilateral agreements have been undertaken
with various countries to further strengthen
cooperation. A computerized Project Tracking
Management Information system funded by WHO
was also installed, to enhance DOH’s capacity to
implement the SDAH.
IMPLEMENTED LGU SCORECARD. The LGU
scorecard is one of the components of the
Monitoring and Evaluation for Equity and
Effectiveness (ME3) which was developed to
measure the progress and contribution of reforms
to health outcomes and goals. It is presented in a
reader-friendly report which underscores
accountability and performance. Scorecards for
2007 and 2008 have been issued. The 2008
scorecards were supplemented by region-wide
scorecards and the MDG program scorecards.
INSTITUTIONALIZED HEALTH PROFESSIONAL
DEVELOPMENT AND CAREER TRACK. The Human
Resource for Health Network (HRHN), a multi-
sectoral organization led by DOH and composed of
government agencies and non-government
organizations, was established in 2006 to address
the Health Human Resource issues and problems
in the country and ensure the achievement of the
goals and objectives of the Human Resources for
Health Master Plan (HRHMP). Various interventions
40
were implemented to improve the distribution and
retention of critical health personnel especially in
far-flung and underserved areas. These include:
scholarship programs like Pinoy MD, Residency
training, and scholarship for undergraduate
personnel; institutionalization of HRH management
and development systems; deployment programs
such as the Doctors to the Barrios Program, Leaders
for Health Program, Medical Pool, Public Health
Managers, and NARS; and institutionalization of
capacity building activities in partnership with
academic and partner institutions. Systems for
securing information on DOH employees and job
vacancies announcements are also being
improved. The mushrooming of nursing schools in
the country which are not at par with the standards
required for nursing education is alarming. There
is a need to ensure the production of health
professionals to meet local needs and to contribute
to the global demand.
IMPROVED PUBLIC FINANCE, PROCUREMENT
AND MANAGEMENT SYSTEMS. Public Finance
Management (PFM) reform is geared towards
improving budget credibility, budget execution,
and internal controls. Several PFM-related reforms
are being undertaken. Department Order 2009-0246
was issued to set a common direction for all efforts
related to PFM reforms. Financial management
process was improved through the revision of
related issuances and delegation of authority for
various financial transactions, while operations
were streamlined to allow for direct credit of
salaries and other receivables to employees’ ATM
accounts. An electronic tracking system (ETS) was
developed to track expenditures and correlate
them with planned activities, particularly the
service delivery programs of DOH. Internal control
system was upgraded from Internal Audit Division
to Internal Audit Service, allowing for improvement
in the existing systems and procedures as well as
to promote sustained transparency and
accountability in various aspects of operation as it
veers away from the traditional approach to one
that is more risk-based, concentrating more on man-
hours and resources reviews.
BRIDGING TO FUTURE REFORMS
The DOH adopted the Agency Procurement
Performance Indicators (APPI), which measures the
performance and adherence of government
agencies on the Government Procurement Law and
includes the use of Standard Bidding Documents
and forms issued by the Government Procurement
Policy Board (GPPB), posting of invitations to apply
for eligibility and invitations to bid, and posting of
procurement process results in the Philippine
Government Electronic Procurement systems.
Alongside this, the Guidelines for Health
Commodities Reference Information System
(HCRIS) was developed to provide specifications
on the type of drugs and medicines to be procured
by government agencies. The Procurement
Resource Center (PRC) systematically organizes all
available reference materials and pertinent
documentation of procurement transactions, both
for the GOP and FAPs, and provides guidance on
pertinent procurement rules and regulations
relative to the package being evaluated. The
Procurement Oversight Committee was also
created to settle issues on procurement in relation
to other internal and external management
processes.
STRENGTHENING INFORMATION AND
COMMUNICATION TECHNOLOGY. Health
information is important for health planning and
decision-making. Among the initiatives
implemented to produce timely, quality and
relevant health information for health sector
development are: (1) the organization of the
Philippine Health Information Network (PHIN)
aimed at providing a harmonized framework for the
country’s HIS, strengthening our country’s health
information system, and improving access to and
use of health information through an inter-agency
body responsible for the production and
dissemination of timely and reliable health
information; (2) the Philippine Local Health
Information System (PLHIS), a web-based
monitoring and evaluation system that tracks
progress in local health systems development and
is integrated into the Local Health Information
System or the LGU websites; (3) the development
and implementation of major registries and

application systems supporting the
implementation of laws and disease prevention;
and (4) Development of the National Health Data
Dictionary (NHDD) and upgrading of ICT
infrastructure at the central office and field health
facilities.
MONITORING AND EVALUATION AND
STRENGTHENING RESEARCH AND KNOWLEDGE
MANAGEMENT. A Knowledge Management Team
was formed to develop the DOH KM Strategic Plan,
defining the KM framework, strategic direction, and
roadmap for implementation. The Philippine
National Health Research System (PNHRS) Strategic
Plan for 2006-2010 was developed and the National
Unified Health Research Agenda (NUHRA) was
implemented in collaboration with other
stakeholders. The annual National Forum on Health
Research for Action translates health research
findings into policies and program interventions.
The Resource Center for Health Systems
Development (RCHSD) was made operational as
the repository of various knowledge resources on
health systems development. Documentation of
best practices was conducted for possible adoption
by other LGUs. The conduct of the National Health
Sector Meetings was enhanced with the
development of 24 Health Policy Notes (HPNs) since
2008, summarizing critical health policy issues to
guide DOH policy makers, program managers, and
health partners in decision-making. A monitoring
and evaluation system (i.e. ME3) has been put in
place to determine the achievements of the health
sector reforms.
DEVELOPMENT OF EFFICIENT NATIONAL AND
LOCAL HEALTH SYSTEMS. It has been recognized that
the establishment of ILHZs at the district level is an
important strategy to make devolution work.
Currently, there are 274 ILHZs in 89 percent of the
provinces. To enhance inter-LGU coordination and
sustainability, an incentive scheme has been
developed as reflected in AO No. 2006-0017
entitled, “Incentive Scheme Framework for
Enhancing Inter-LGU Coordination in Health
through Interlocal Health Zones (ILHZ) and Ensuring
their Sustainable Operations.” This includes the
provision of additional commodities, access to
HSRA Monograph No. 9 41
specialized training and technical assistance, and
the provision of financial grants to LGUs that have
functional ILHZs and practice good inter-LGU
coordination. Intervention for Local Health Systems
Development in Far-flung Areas and Marginalized
Populations, also called geographically isolated and
disadvantaged areas (GIDA), was developed to
empower communities, LGUs, and key stakeholders
for good governance in health which employs
collaborative partnerships and resource sharing
through the Primary Health Care approach that
builds self-sufficiency and self-reliance.
The Department of Health adopted the Urban
health equity and response tool (HEART),
developed and launched by the WHO, to address
unfair health conditions and inequity in urban areas.
HEART is designed to help countries systematically
generate evidence to identify, assess, and respond
to urban health equity concerns. It also seeks to
generate intersectoral action, promote social
cohesion, community participation, and
empowerment of the poor.
Challenges in Good Governance
Addressing the inequity in health is a continuing
challenge for the health sector. Future reforms must
focus on how to minimize the widening inequities
in health outcomes. This would entail strengthening
the overall stewardship function at all levels of the
system.
1. Addressing persistent disparities in
performance across provinces, municipalities
and population groups. Despite years of
implementing reforms, wide disparities in
performance and outcomes continue to be a
major challenge. While some provinces are
doing well and lead in reform implementation,
others continue to struggle with improving the
health status of their constituents.
2. Harmonizing public and private sector gains to
improve overall health sector performance.
Public-private partnership in health service
delivery is easier to achieve in urban areas than
in rural communities in remote areas, where it
is often difficult to jumpstart partnership
42
activities. However, this process can be
facilitated if an external private organization
with resources and a vast network joins the
partnership, with the able management of the
DOH. The health sector needs private sector
data that will complement the existing database
on health information and statistics.
3. Strengthening partnerships through the HRHN.
As the inter-agency body responsible for
developing HR policies, the HRHN must be
strengthened to ensure coherence in the
mandates of all agencies managing HRH. The
HRHN must pursue the development of
responsive policies to ensure financing for
human resources for health, creating
opportunities for people to work in the health
sector and addressing the supply-demand
mismatch for Filipino health professionals.
4. Full blown implementation of the Sector Wide
Approach for Health. Although the policy for
implementing the sector wide approach (SWAp)
for health has been issued, this has yet to be
translated into an actual SWAp. The challenge
is for DOH to develop a single sectoral program
with one basket of funds, where all donor
principals will be allowed flexible terms based
on existing government procedures.
5. Institutionalizing sound financial management
to sustain budget increases and rationalize
spending. The creation of the Program Planning
and Budget Development Committee (PPBDC)
in 2006 is a big step towards sound Public
Finance Management. It ensures the alignment
of operational plans with DOH’s strategic thrust
and policies, and synchronizes these to financial
plans. The process of suballotment distorts
budget allocation and execution. In this regard,
the DOH has sought to improve fund transfer
and suballotment by doing these on a quarterly
basis. However, this process needs to be
strengthened and enhanced further.
BRIDGING TO FUTURE REFORMS
6. Implementing the eNGAS and eProcurement
systems. These are the main foci of reforms to
improve the efficiency of financial transactions.
The eNGAS is fully operational at the DOH
Central Office, and has been rolled out to five
CHDs and seven hospitals. Trainings on eNGAS
(in eight CHDs and 50 DOH hospitals) and
monitoring of its implementation have also
been undertaken. However, its implementation
was deferred in other areas due to a directive
from the Department of Budget and
Management calling for further system
improvements.
7. Addressing delays in procurement. For the
Calendar Year (CY) 2008 ODA, the performance
of many projects in the DOH portfolio has been
slow, and implementation and achievement of
targets of many DOH FAPs have not been up to
par. This could be attributed to various problems
that are within DOH’s control, such as delays in
procurement and civil works, as well as external
factors such as the increase in costs of
construction material and the withdrawal of
LGUs (NEDA, 2008).
8. Reviewing government procurement law.
Studies show that RA 9184 tends to compromise
quality of goods and services in favor of complex
bidding procedures. A procurement system that
is slow and inefficient sends a strong signal to
the business community that the government
is unable or unwilling to compete in today’s fast-
paced economy. The drawn-out bidding process
takes about six months on average, even for a
simple, low-budget contract. The performance
of government functions is further hampered
by turnaround times for vendors to comply with
overly detailed terms of reference, and for
procurement agencies to process voluminous
bid documents. For those in court, this simply
means that justice delayed is justice denied
(Vilches, 2008).
 HSRA Monograph No. 9 43

Recommendations 4. A detailed implementation plan for the PFM

1. Intensify LGU capacity building to further their Reform Strategy must be developed. A
knowledge and understanding of local health monitoring and evaluation plan that will spell
systems and make them advocates for their own out milestones and measurable indicators for
health reforms. Sustaining the momentum of the implementation of this reform strategy
reforms is often compromised by a change in should accompany the implementation plan. A
local leadership. By including the health agenda review of existing procurement processes
in MOAs, incorporating local ordinances/ should be undertaken to determine gaps and
resolution into local plans, and providing bottlenecks so that these can be remedied. A
continued capacity building for local reform study on the effectiveness of RA9184 should be
implementers, discontinuity in reforms can be considered to improve the process.
prevented. 5. Addressing socioeconomic determinants on
2. Harmonize the DOH budget cycle with LGU health to make health reforms more equitable
budgeting and planning processes. The DOH and sustainable. The 2008 Report of the WHO
budget process lags behind the LGU budget Commission on Social Determinants on health
cycle, which has a huge impact on the underscores the need to address social,
implementation of the PIPH. The PIPH and AOP economic, and political determinants of health
must be mainstreamed into the local budget if we are to deal effectively in addressing old
cycle, the Comprehensive Development Land and new public health challenges. The
Use Plan, the Local Investment Plan, and the Commission recommends three major
Annual Investment Plan to ensure that they will strategies to achieve these: (1) improve daily
be given the appropriate budget. living conditions; (2) tackle the inequitable
distribution of power, money, and resources;
3. The PPBDC should take a more active role in
and (3) measure and understand the problem
budget preparation, through the conduct of
and assess the impact of action.
internal budget hearings. Piecemeal,
fragmented, and unplanned suballotments to
CHDs and other DOH units (which distort the
budget allocation) must be minimized and
discouraged through a more rational budget
allocation based on performance. This can be
done through a performance-based scheme
where suballotments from the DOH central
office will be issued as a single suballotment at
the start of the year, with accompanying
performance criteria whereby the CHDs will be
accountable for ensuring the attainment of the
deliverables. Another way to do it is to
incorporate the amount to be suballotted in the
General Appropriations Act (GAA) line items.
The CHDs and field managers will be given more
autonomy and accountability in ensuring that
these suballotments are spent based on
required outputs, and DOH central office will
check for performance on their health outcomes
and systems improvement.
44 BRIDGING TO FUTURE REFORMS

APPENDIX
Republic of the Philippines
Department of Health
OFFICE OF THE SECRETARY

RESOLUTION
12th National Health Sector Meeting
Resolution No. 2009-03-01

BRIDGING TO FUTURE HEALTH REFORMS

COGNIZANT that while the health sector has pursued major reform initiatives in the past, from adopting
the Primary Health Care approach in the 1970s to implementing health-related legislations (like the Generics
Act of 1988, Local Government Code of 1991, National Health Insurance Law of 1995, Cheaper and Quality
Medicines Act of 2008 and the Food and Drug Administration Act of 2009) and to carrying out reforms through
the Health Sector Reform Agenda and FOURmula One for Health, implementing health reforms takes time
and is affected by political and policy environments;
COMMITTED to strengthen reform strategies and harmonize health sector efforts to achieve the health
system goals of better health outcomes, equitable health financing and responsiveness of health care system;
REALIZING that the Department of Health, as the leader in the health sector, must assess the progress of
the reform strategies, identify the implementation barriers, and propose appropriate intervention strategies
in preparation for the next Medium Term Philippine Development Plan and the next National Objectives for
Health;
CONSIDERING that continuing efforts to improve health system performance shall require the cooperation
and participation of all stakeholders in the health sector and effective governance at the national, subnational,
and local levels;
HEREBY RESOLVES to implement future reform strategies along the principles of:
 Universal Coverage which shall ensure that essential health packages at all levels of care that may be
financed through social health insurance and subsidies from the national and local governments with
participation of the private sector shall be made available to all Filipinos, especially the poor.
 Equity consideration in resource allocation to ensure access to health services of the marginalized (GIDA,
IPs, older persons, differently-abled persons, internally displaced population etc.) and people in conflict-
affected areas.
 Effective governance that refers to the enhancement of the stewardship function and the improvement of
the management and internal support system both of the national, subnational, and local governments to
better respond to the needs of health service delivery, and monitor and evaluate the performance and
results of reforms.
 HSRA Monograph No. 9 45

 Broad and sustained participation among all stakeholders that is purposive, coordinative, harmonized and
productive.
 Client-centeredness such that the health sector responds to the medical and social expectations of its
clients that are consistent with standards of care.
 Building on the gains of reform efforts towards sustainable development.

THEREFORE:
The DOH and its attached agencies shall continue to:
 Provide policy directions to strengthen and sustain health reforms particularly on regulation, servi ce
delivery, financing and governance;
 Oversee the management and implementation of health reform strategies;
 Mobilize and leverage resources to achieve the goals of health reforms;
 Improve and develop performance indicators and activities to assess the progress of reform
implementation;
 Engage partners in policy development and implementation of strategies
- Engage the media to echo the national health programs and policies across the population and provide
accurate and timely information to the public
- Advocate with the legislative bodies to enact laws that will support health reform priorities;
- Engage professional groups, the academe, and NGOs in establishing collaborative networks for service
provision, training, and advocacy.
 Provide venues for consultation, information sharing, and research for effective policy and program
development.

Other National Government Agencies shall:

 Assist the DOH and LGUs in the implementation of health reforms;
 Support the health sector in mobilizing resources to implement reform strategies;
 Strengthen inter-and intra-agency collaboration and coordination to propel and sustain awareness and
involvement in the implementation of health reform strategies.

The Local Government Units shall:

 Develop policies and plans appropriate to their locality and consistent with the national development
directions and local legislative agenda;
 Mobilize and utilize resources such as IRA, PHIC reimbursements, user-fees, capitation fund, and other
sources in order to implement reforms to improve the local health systems;
 Assess the implementation of their local health reform plans and programs through regular reviews;
 Upgrade the capacity to organize and deliver health services consistent with health reforms;
 Establish the network and partnership with private sector for effective service delivery to support health
reforms;
 Cooperate with the DOH in maintaining an improved health information system.
46 BRIDGING TO FUTURE REFORMS

The Development Partners within the context of Sector Development Approach for Health shall:
 Provide official development assistance consistent with the national thrusts and directions for health;
 Align and harmonize their systems and processes with government procedures to the best extent possible;
 Cooperate in the establishment of mechanism to track development assistance;
 Ensure the sustainability and institutionalization of projects to appropriate agencies/ offices.

The Academe shall:

 Conduct research and disseminate findings to provide evidence in health policy and program development;
 Develop academic curricula that are responsive to emerging needs of the health sector;
 Provide opportunities for transfer of technology from both local and international sources through seminars
and fora.

The Private Sector and Civil Society shall:

 Produce health goods and services based on standards set by the government and ensure product safety
for all patients and consumers;
 Participate in the development of health policies and standards;
 Support the implementation of health reform initiatives of the government;
 Provide feedback to the government for the improvement of the reform process.

Individuals and Families shall:

 Share in the responsibility of attaining better health through healthy lifestyle, appropriate health seeking
behavior and maintaining healthy homes and environment;
 Report unscrupulous, illegal and fraudulent acts of health providers to the government;
 Provide feedback to the government for the improvement of the reform process; and
 Demand their rights to quality health services and financial risk protection.

The Sectoral Management and Coordinating Team (SMCT), as the lead in ensuring that the above are
carried out by the concerned offices, shall develop an action plan in coordination with concerned stakeholders
to be monitored on a quarterly basis by the Secretary of Health.
Be it resolved and approved this 5th day of November 2009 at the Diosdado Macapagal Auditorium, Land
Bank of the Philippines Main Office, Malate, Manila.
 HSRA Monograph No. 9 47

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50 BRIDGING TO FUTURE REFORMS

B. LEGISLATION, ADMINISTRATIVE ORDERS AND CIRCULARS,

AND RESOLUTIONS
Advisory Council for Price Regulation. “Implementing the Voluntary Price Reduction for at Least Sixteen
(16) Molecules (or 41 Drug Preparations).” Resolution No. 2009-0001.
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Department of Health. “One-Stop-Shop System for the Regulation of Medical Facilities for Overseas
Workers and Seafarers, Non-Hospital Based Dialysis Clinics, Non-Hospital Based Ambulatory Surgical
Clinics with Ancillary Services.” Administrative Order 2008-0027. DOH: 25 June 2008.
Department of Health. “Guidelines on the Implementation of the Integrated Drug Test Operations and
Management Information System (IDTOMIS) for Screening and Confirmatory Drug Test Laboratory
Operation.” Administrative Order 2008-0025. DOH: 29 July 2008.
Department of Health. “Harmonization and Streamlining of the Licensure System for Hospitals”.
Administrative Order 2007-0021. DOH: 06 June 2007.
Department of Health. “Violations under the One-Stop-Shop Licensure System for Hospitals”.
Administrative Order 2007-022. DOH: 06 June 2007.
Department of Health. “Schedule of Fees for the One-Stop-Shop Licensure System for Hospitals”.
Administrative Order 2007-0023. DOH: 06 June 2007.
Department of Health. “Guidelines for the Licensure of Department of Health Hospitals”. Administrative
Order 2007-0024. DOH: 06 June 2007.
Department of Health. “Schedule of Fees for the Licensure of General Clinical Laboratories and the
Registration of Special Clinical Laboratories.” Administrative Order 2008-0007. DOH: 14 March 2008.
Department of Health. “Policies and Guidelines Governing the Registration and Licensing of
Establishments Dealing with Medical Devices.” Administrative Order No. 2007-0003. DOH: 8 January
2007.
Department of Health. “Revised Schedule of Fees for Certain Services Rendered by the BHFS and CHD in
Relation to the Regulation of Health Facilities and Services and validity Period of LTO, Accreditation,
Authority to Operate, and Clearance to Operate for Certain Health Facilities and Services.”
Administrative Order 2007-0001. DOH: 5 January 2007.
Department of Health. “FOURmula ONE for Health (F1).” Administrative Order 2005-0023. DOH: 30
August 2002.
Department of Health. “Implementing Rules and Regulations of RA 9271, Known as the Quarantine Act of
2004.” Administrative Order 186 series of 2004. DOH: 13 December 2004.
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Implementation.” Administrative Order 174 series 2004. DOH: 11 October 2004.
 HSRA Monograph No. 9 51

Department of Health. “Guidelines for the Establishment and Operations of Botika ng Barangays (BnB)
and Pharmaceutical Distribution Networks (PDNs)”. Administrative Order 144 s. 2004. DOH: 14 April
2004.
Department of Health. “Guidelines for Adoption of More Efficient and Effective Development ,
Approval and Implementation of PIPH/AOP under Fourmula One for Health.” Administrative Order
2009-0008. DOH: 12 March 2009.
Department of Health. “Generics Only Prescribing.” Department Memorandum No. 2009-0009. DOH: 07
January 2009.
Department of Health. “Adopting a Public Finance Management Reform Strategy in the DOH.”
Department Order 2009-246. DOH: 07 October 2009.
Department of Health. “Revitalization of the Mother-Baby Friendly Hospital Initiative in Health Facilities
with Maternity and Newborn Care Services.” Administrative Order No. 2007-0026. DOH: 10 July 2007.
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that Address Diseases that Account for the Leading Causes of Morbidity and Mortality.” July 2009.
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Republic Act No. 9271 or the Quarantine Act of 2004.
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