[OPINION] Stop asking where UHC will find the money. Build the economy that can pay for it.

• The exit of PAGCOR from casino operations raises concerns about a potential funding gap of P1.7 billion to P2.1 billion for Universal Health Care in the Philippines, as half of PAGCOR's income is allocated to UHC.
• The discussion around healthcare financing often focuses on finding immediate funding sources, but there is a need to consider how to build a robust economy that can sustain healthcare costs in the long term.
• The Philippines has opportunities to develop higher-value healthcare services and industries, similar to the successful BPO sector, which could generate significant economic activity and support UHC financing.

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When Solid North Representative Ching Bernos recently asked where Universal Health Care would get its billions once PAGCOR exits casino operations, she raised a legitimate question. Under the Universal Health Care Act, 50% of the national government’s share of PAGCOR income is earmarked for UHC and transferred to PhilHealth to improve its benefit packages.

With Casino Filipino being privatized as PAGCOR moves toward becoming primarily a regulator, one estimate cited in the current debate puts the resulting annual reduction in UHC funding at around P1.7 billion to P2.1 billion.

P2 billion is not insignificant. But the controversy also illustrates something about how we tend to discuss healthcare financing in the Philippines. The conversation often begins with the same question: Where can government find the money?

We increased tobacco and alcohol taxes and earmarked part of the proceeds for health. PAGCOR contributes gaming revenues. PhilHealth collects premiums. Congress appropriates money to the Department of Health. When additional resources are required, government can borrow from institutions such as the Asian Development Bank and the World Bank.

All of these have legitimate roles. Sin taxes can simultaneously raise revenue and discourage harmful consumption. Gaming revenues already exist and can be redirected toward public purposes. Development-bank financing can fund infrastructure and reforms whose benefits last for decades.

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But these are primarily ways of financing or reallocating resources. There is another question that receives less attention: How do we make the Philippine economy itself capable of paying for increasingly expensive healthcare?

That matters because healthcare is already a massive economic undertaking. According to the Philippine Statistics Authority’s 2025 Philippine National Health Accounts, Philippine total health expenditure reached P1.87 trillion in 2025, equivalent to 6.7% of GDP. Government and compulsory health-financing schemes paid 46.5% of current health expenditure, yet Filipino households still paid 41.2% directly out of pocket.

Universal Health Care therefore cannot ultimately be only a DOH or PhilHealth problem. Those institutions distribute resources, purchase services, and determine benefits. But the money they spend has to originate somewhere in the productive economy.

Our reliance on public-sector financing can also be seen in the country’s relationship with development institutions.

At the end of 2025, the Asian Development Bank reported a Philippine public-sector portfolio of 27 loans worth $10.96 billion. Its outstanding balances and undisbursed commitments for private-sector transactions in the Philippines amounted to $486 million.

The comparison with some neighbors is interesting. In Vietnam, ADB reported a current public-sector portfolio of $2.18 billion and private-sector exposure of $1.42 billion. In Indonesia, ADB reported $7.17 billion in public-sector loans and $1.15 billion in outstanding and undisbursed private-sector transactions.

These are not perfectly equivalent measures, and ADB portfolios should not be treated as a comprehensive measure of how each country’s economy is financed. Countries have different infrastructure requirements, project pipelines and relationships with multilateral lenders. The Philippine ADB portfolio also includes productive investments such as the North-South Commuter Railway as well as programs for nutrition, disaster resilience, employment and investment reform.

BPO industry can be a model

Nor does this prove that the Philippines borrows too much or that private finance is inherently better than sovereign lending.

But the contrast raises a useful development question: Are we building enough industries that will eventually generate the income needed to pay for the public investments we are financing today?

The Philippine BPO industry demonstrates what that alternative can look like.

The country’s IT-BPM sector generated approximately $40.3 billion in revenue in 2025 and employed around 1.9 million people, according to IBPAP figures reported by The Philippine Star.

That $40 billion is not government revenue. It would be wrong to compare $40 billion of industry revenue directly with P40 billion in taxes or public expenditure.

But BPO does something more fundamental.

It sells Philippine services to global customers and brings income into the domestic economy. That income pays salaries, suppliers and landlords. Workers pay income taxes and PhilHealth contributions. Businesses pay taxes subject to applicable incentive regimes. Employees buy housing, transportation, education, food and healthcare. The industry also generates foreign exchange.

In other words, BPO first creates economic activity from which households, businesses and government can subsequently draw resources.

Healthcare itself may offer an opportunity to repeat part of that story.

The Philippines already had an estimated $4.2-billion healthcare-services outsourcing industry employing around 190,000 people in 2024. Existing activities include medical coding, chart abstraction, case management and clinical back-office support. The industry’s existing roadmap targets $6.7 billion in revenue and 285,000 full-time employees by 2028, according to CITEM’s Healthcare Philippines industry material.

This could become the foundation of what might be called BPO 2.0.

Universal health care as industrial policy

Instead of competing indefinitely on lower-value transactional work, the Philippines can move toward higher-value healthcare and life-sciences services: clinical data management, pharmacovigilance, biostatistics, medical writing, regulatory support, real-world evidence, decentralized clinical trials, virtual nursing and AI-assisted medical review.

Around that services economy could develop physical industries — medical devices, diagnostics, clinical research, pharmaceutical contract manufacturing and, eventually, more advanced biologics manufacturing.

These are harder to build than call centers. They require predictable regulation, research-capable hospitals, skilled personnel, investment, manufacturing infrastructure and patient confidence.

But they also create capabilities that are harder to automate or relocate overnight.

Consider the scale.

An additional $5 billion in annual healthcare and life-sciences exports would represent roughly P285 billion in gross annual economic activity at P57 to the dollar.

Not all of that would become taxes. Companies have costs and profits. Workers spend their own wages. Some investments receive fiscal incentives. Gross export revenue should never be presented as government revenue.

But the comparison illustrates why the current debate over a P1.7-billion to P2.1-billion PAGCOR funding gap can be viewed from a much larger perspective.

One approach asks:

What existing activity can provide another few billion pesos for UHC?

Another asks:

What new industries can generate another few hundred billion pesos of economic activity from which households and government can finance healthcare?

The Philippines needs both.

Sin taxes should continue to play their public-health and revenue roles. PhilHealth premiums, PAGCOR contributions, and general taxation remain important. Development-bank financing makes sense where the economic and social returns justify borrowing. Better purchasing, primary care, prevention, and governance remain essential because even a richer country can waste healthcare resources.

But economic capacity determines how large the pool of resources becomes in the first place.

Seen this way, UHC is not only health policy. It is also industrial policy.

Continually creating money for UHC

DTI and BOI matter. FDA efficiency matters. Universities and research hospitals matter. Economic zones matter. So do investors willing to build healthcare-service and medical-manufacturing businesses in the Philippines.

A Filipino nurse providing clinical support remotely to an American health system can generate export income without leaving the country. A Philippine hospital enrolling patients in a multinational clinical trial can attract international research spending. A Filipino physician reviewing safety data for a global pharmaceutical company can sell expertise rather than migrate. A factory producing medical devices can simultaneously create jobs, exports and healthcare capability.

None of this replaces taxation or public financing.

It enlarges the economy beneath them.

That is why the most important question raised by the PAGCOR debate may not be where UHC will find another P2 billion.

It may be this:

What can the Philippines build that generates the next P1 trillion from which UHC, education, infrastructure and social protection can all be paid?

The country built a $40-billion BPO industry by connecting Filipino talent with global demand.

Over the next 25 years, healthcare, life sciences and medical technology could become part of the next chapter.

Finding another source of UHC money matters.

Building an economy capable of continually creating that money matters even more. – Rappler.com

Dr. Jaemin Park is an adjunct professor at the University of the Philippines College of Public Health and works across Southeast Asia on healthcare financing, medical innovation, and public sector reform.