PhilHealth Welcomes New Leadership Under Dr. Edwin M. Mercado
The Philippine Health Insurance Corporation (PhilHealth) has officially ushered in a new era of leadership, with Dr. Edwin M. Mercado stepping into the role of president and CEO. The ceremonial turnover took place on February 10 in Pasig City, where the outgoing chief, Emmanuel R. Ledesma Jr., formally transferred the reins of the agency. Dr. Mercado was sworn into office by President Ferdinand R. Marcos Jr. on February 4 at the historic Malacañang Palace.
Dr. Mercado, a US-trained orthopedic surgeon with a wealth of experience in hospital administration, assumes leadership at a pivotal moment for PhilHealth. The agency has recently emphasized its financial stability, even in the absence of government subsidies projected for the year 2025. His extensive background in healthcare management and strategic planning aligns seamlessly with PhilHealth’s ongoing initiatives aimed at sustaining benefit programs and ensuring robust financial protection for its members.
During the turnover, Ledesma Jr., who led PhilHealth for two years, expressed his unwavering confidence in the agency’s future direction. He reaffirmed his commitment to PhilHealth’s universal healthcare mandate, stating, “Leaders may change, but our purpose to provide adequate health insurance coverage and to ensure that every Filipino has access to affordable, accessible, and acceptable health care remains the same.”
In his inaugural address to employees at a corporate-wide flag ceremony, Dr. Mercado highlighted the critical importance of continuity in PhilHealth’s services. He identified the reduction of members’ out-of-pocket medical expenses as a top priority, aiming to decrease these costs from the current 45%-47% to a more manageable 25%. Furthermore, he underscored the necessity for data-driven policy decisions to enhance the agency’s benefit packages.
Dr. Mercado has also pledged to accelerate PhilHealth’s digital transformation, a move that is expected to significantly improve operational efficiency and enhance the member experience. This leadership transition occurs as PhilHealth asserts its ongoing financial stability, notwithstanding the anticipated removal of government funding for 2025.
In a recent Senate hearing, Ledesma Jr. reassured lawmakers that PhilHealth’s operations would remain uninterrupted, citing the agency’s sufficient financial reserves. He stated, “At the outset, we declare categorically that PhilHealth is currently in good financial standing, and our commitment to universal health coverage is as steadfast as ever.” The agency primarily relies on member contributions, reserve funds, and investment income to sustain its benefit programs.
Although PhilHealth was required to return a portion of its funds in 2024, its PHP 600 billion reserve remains secure, enabling the agency to meet its financial obligations in 2025 without additional subsidy assistance. In 2024, PhilHealth enhanced case rates for medical procedures by an impressive 50%, resulting in a remarkable 95% overall expansion in benefits. Ledesma Jr. noted that these changes have greatly improved financial protection for members compared to the previous year.
Despite PhilHealth’s solid financial position, healthcare costs in the Philippines are projected to rise significantly by 18.3% in 2025, according to WTW’s Global Medical Trends Survey. This increase ranks among the highest in the Asia-Pacific region and is driven by surging hospital fees, escalating professional service charges, and a growing demand for healthcare services. Across the region, medical inflation is expected to average 12.3%, with the Philippines, Indonesia, and Malaysia experiencing above-average increases. Notably, Indonesia is projected to have the highest rate at 19.4%, closely followed by the Philippines.
Additionally, the Health Maintenance Organization (HMO) sector in the Philippines has encountered financial difficulties, with industry-wide losses soaring to PHP 4.3 billion in 2023, a significant increase from PHP 1.4 billion in 2022. Consequently, HMOs have been compelled to adjust their pricing structures to cope with rising claims costs, reflecting the broader challenges within the healthcare system.
