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Corruption in the Philippines is no longer a novel issue, akin to the coronavirus pandemic that has affected the United States and the world at large. It is, once again, an endemic, deeply rooted virus that has plagued the country since time immemorial. It is a social hazard and a significant obstacle to good governance that has permeated not only the government but also the private and non-government sectors, as well as Philippine society even before the outbreak of the COVID-19 crisis in the country.
As far as the corruption index is concerned, the country is ranked as the 113th least corrupt nation out of 180 countries according to the 2019 Corruption Perceptions Index by Transparency International. That’s a drop of 14 places from the 2018 ranking.
To note, corruption is a form of dishonesty or criminal offense undertaken by a person or organization entrusted with a position of authority, to acquire illicit gain or abuse power for one’s interests and gains.
Corruption in the Philippines is pervasive on various scales. It can be found at all levels of the state apparatus, ranging from petty bribery to grand corruption that affects the government on a large scale, as well as systemic corruption that has become ingrained in the daily fabric of society, akin to organized crime.
Thus, the alleged corruption in the Philippine Health Insurance Corporation (PhilHealth) is an exemplification of systemic corruption in the present-day Philippines.
Systemic Corruption
PhilHealth has been plagued by fraud for many years. Some of the alleged corruption in PhilHealth that came to light includes the uncovering of a massive fraudulent scheme involving padded medical claims and payments for non-existent beneficiaries by the Commission on Audit (COA). For example, there were fabricated credits of premium payments to Accenture Inc. in the Treasury and Membership Databases of PhilHealth, totaling PHP 114 million (US$2.34 million), occurring from October to December 2010 and from February to September 2011.
Such deceptive transactions allegedly began in late 2009. In 2012, checks for the said payments were encashed in at least two branches of Metrobank in Batangas instead of being remitted to PhilHealth. This anomalous scheme was made possible due to collusion between PhilHealth personnel and a criminal syndicate.
Moreover, rampant misconduct in PhilHealth includes fraudulent and inflated health benefit claims. For instance, in 2014, six health facilities were investigated for actively recruiting patients for unnecessary cataract removal procedures. Cataract removal ranked fourth among PhilHealth’s top conditions in terms of claims, with total benefits paid out amounting to PHP 3.7 billion (US$76 million).
Likewise, approximately PHP 150 billion (US$3 billion) has been lost to overpayments, up-coding, and other forms of fraud since 2013. Some of these fraudulent transactions and controversies, costing billions of pesos, are currently under investigation by various government agencies and congressional hearings. These include the alleged ghost dialysis scam, overpricing of an ICT project, inflated senior citizen beneficiary lists, and other money-making schemes within PhilHealth.
Whistleblower Attorney Thorsson Keith claimed that PhilHealth officials pocketed around PHP 15 billion (US$308.3 million) through fraudulent schemes, partly through the Interim Reimbursement Mechanism (IRM), a system used by PhilHealth to provide cash advances to hospitals during emergencies like the COVID-19 pandemic.
Combatting Corruption in PhilHealth
In response to the corruption controversies surrounding PhilHealth, significant efforts have been made by various government agencies to address the alleged corruption issues faced by the state-run health insurance agency and to ensure that the perpetrators of these corrupt practices are held accountable.
President Rodrigo Duterte ordered an investigation into allegations of corruption in PhilHealth and initiated the formation of a multi-agency task force to probe the issues plaguing the country’s insurer. This inter-agency task force, led by the Department of Justice (DOJ), includes the Office of the Ombudsman, Civil Service Commission, Office of the Executive Secretary, Presidential Anti-Corruption Commission (PACC), Palace Undersecretary Melchor Quitain, and Presidential Management Staff.
The task force has been empowered to conduct lifestyle checks on PhilHealth officials and employees, audit PhilHealth finances, and recommend preventive suspensions, if necessary, to ensure that the investigation is not impeded.
Meanwhile, the PACC, through its ‘Task Force PhilHealth,’ has conducted a separate investigation and so far identified 36 PhilHealth officials allegedly involved in irregularities. Commission chief Greco Belgica stated that charges would be filed against these officials before the Office of the Ombudsman.
Simultaneous congressional hearings at the House of Representatives and the Senate on the alleged corruption cases engulfing PhilHealth are also being conducted in support of the legislation.
Analysis
Over the years, the widespread corruption in PhilHealth has become more apparent, especially against the backdrop of the COVID-19 pandemic. The pandemic has made the anti-graft, corruption, and good governance efforts of the Duterte administration vulnerable to corruption. The corruption issues besieging PhilHealth have compromised the country’s pandemic responses and undermined public trust in government institutions amid the COVID-19 crisis.
The problem of corruption in PhilHealth victimizes the vulnerable, the sick, and poor Filipinos who are cheated out of medical aid that should have been used to treat their illnesses and possibly save their lives. PhilHealth has thus far failed the people it promised to serve.
The irregularities in PhilHealth must not be allowed to persist. Therefore, heightened political will and robust governance responses from the Duterte administration are needed to curb the corruption problem in PhilHealth.
In addressing corruption in PhilHealth, leaders and lawmakers must recognize certain aspects of PhilHealth as a public institution that need to be reformed, strengthened, and reinforced. For example, the composition of PhilHealth’s board is skewed in favor of the government, with inadequate representation from patients, healthcare providers, civil society groups, and the public. This deficiency needs to be addressed to ensure accountability and transparency in PhilHealth’s operations and decision-making processes.
There is also a need to address systemic corruption, such as that in PhilHealth, which reflects the weak ‘merit culture’ of the country. To curb corruption at its root, the merit culture must be reinforced by recruiting, promoting, and rewarding individuals based solely on qualifications, experience, and performance.
The civil service should not be politicized if corruption is to be curtailed. Additionally, the ‘culture of impunity’ pervasive in PhilHealth, where corrupt acts often go unpunished even when detected and exposed, must be addressed and eradicated.
Moreover, leaders and lawmakers should explore ways to promote societal accountability, where civil society, the media, and the public can monitor and address the actions of public institutions like PhilHealth and its officials. Reforms in this area should include enabling frameworks such as the passage of the Freedom of Information (FOI) Bill, which will empower citizens to expose wrongdoing by increasing their access to information and promoting transparency, accountability, citizen participation, empowerment, and an anti-corruption culture among Filipinos.
Furthermore, in addressing the corruption problem in PhilHealth, government leaders, and lawmakers must recognize that corruption in PhilHealth is a reflection of wider societal issues, where corruption is entrenched at all levels of Philippine society. They must acknowledge that the corruption problem in PhilHealth is cyclical and systemic, requiring a systemic solution rather than piecemeal reforms.
The systemic corruption in PhilHealth persists because corrupt behavior is not isolated but culturally ingrained in society. Cultural and structural ‘blind spots,’ such as nepotism, favoritism, and clientelism, are prevalent in both the public and private spheres and contribute to corrupt practices.
Therefore, there is a need for a profound examination of the socio-cultural factors that drive corrupt practices and how these practices are woven into the fabric of daily life and cultural motivations. Corruption should not be treated solely as an institutional and criminal issue but also as a social, political, and cultural phenomenon driven by human behavior and circumstances.
In conclusion, addressing corruption in PhilHealth requires a comprehensive and multifaceted approach that encompasses institutional reforms, strengthening of the merit culture, promotion of societal accountability, and a deeper understanding of the socio-cultural factors that perpetuate corrupt practices. Only by addressing corruption at its root and fostering a culture of transparency, accountability, and integrity can PhilHealth and other public institutions fulfill their mandate to serve the Filipino people effectively and efficiently.
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