Philippine health maintenance organisations bounce back to profit in 2024
Philippine health maintenance organisations bounce back to profit in 2024 | Insurance Business Asia
Life & Health
Philippine health maintenance organisations bounce back to profit in 2024
This is despite surge in healthcare costs
Life & Health
By
Roxanne Libatique
The health maintenance organisation (HMO) sector in the Philippines has rebounded to profitability in the first half of 2024 (H1 2024), despite a significant rise in healthcare benefit payouts.
Philippine HMOs disbursed PHP30.33 billion in healthcare benefits during this period, marking a 15.65% increase from the same period last year.
Despite these higher payouts, the sector reported a net income of PHP636.6 million for the first half of 2024, reversing a PHP1.19 billion net loss recorded in the first half of 2023.
Philippine HMOs’ financial performance
A comparison of financial data between the first halves of 2024 and 2023 shows the following:
Total revenues: PHP38.75 billion, up 21.93% from PHP31.78 billion.
Total membership fees: PHP36.56 billion, an 18.97% increase from PHP30.73 billion.
Total expenses: PHP38.12 billion, up 15.62% from PHP32.97 billion.
Total benefits paid out: PHP30.33 billion, a 15.65% rise from PHP26.23 billion.
Net income: PHP636.6 million, compared to a loss of PHP1.19 billion.
Philippine HMOs’ asset growth
The sector also saw its total assets grow by PHP7.51 billion, or 12.16%, reaching PHP69.26 billion by the end of the first half of 2024.
Invested assets increased by 6.45% to PHP21.31 billion, while total liabilities rose by 13.33% to PHP58.32 billion, driven by increases in membership fee reserves and claims reserves. This financial growth was achieved despite the reduction in the number of licensed HMOs, which fell from 29 in 2023 to 25 in 2024.
Healthcare costs an increasing concern for Filipinos
These financial developments occur as healthcare costs become an increasing concern for Filipinos.
The survey introduced the MyFuture Readiness Index, which assesses perceptions of current and future physical, mental, and financial wellbeing. Filipinos scored 91 on their desired readiness level, higher than the regional average, but only 79 on their expected readiness level, indicating unease about future wellbeing.
Factors affecting Filipinos’ confidence in their future
The survey identified several key challenges affecting Filipinos’ confidence in their future:
rising healthcare costs (82%)
inflation (81%)
economic slowdown (78%)
increasing interest rates (78%)
declining health (73%)
These concerns have influenced financial priorities, with many Filipinos focusing on goals such as securing passive income for retirement (43%), maintaining emergency savings (39%), and ensuring sufficient funds for healthcare needs (31%).
Rahul Hora, president and CEO of Manulife Philippines, emphasised the anxiety surrounding economic instability and healthcare costs, stressing the importance of financial planning and advice to address these issues.
“Significant of these is the value of financial advice and guidance that can help them assess and bring their goals closer to fruition, mitigate risks, and find the right products that provide stronger health and life protection, as well as investment and retirement solutions,” he said.
The survey also revealed that 82% of Filipinos see the rising cost of healthcare as a major threat, a concern that is even higher among those aged 50 to 60, reaching 86%.
With out-of-pocket health expenses making up 44.7% of total health spending in the Philippines – approximately $9 billion in 2022, projected to rise to $13 billion by 2028 – this concern is significant.
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