The Philippine Health Insurance Corporation (PhilHealth) has officially transitioned to new leadership, with Dr Edwin M Mercado (pictured left) assuming the role of president and CEO.
The turnover ceremony took place in Pasig City on Feb. 10, during which outgoing chief Emmanuel R Ledesma Jr (pictured right) formally handed over the position.
Mercado was sworn into office by President Ferdinand R Marcos Jr on Feb. 4 at Malacañang Palace.
Mercado, a US-trained orthopaedic surgeon with extensive experience in hospital administration, takes over PhilHealth at a time when the agency has stressed its financial stability despite the absence of government subsidies for 2025.
His background in healthcare management and strategic planning aligns with PhilHealth’s ongoing initiatives to sustain benefit programs and ensure financial protection for members.
Ledesma Jr, who served as CEO for two years, expressed confidence in the agency’s direction and reaffirmed his support for PhilHealth’s universal healthcare mandate.
“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,” he said.
During his first address to employees at a corporate-wide flag ceremony, Mercado emphasised the importance of continuity in PhilHealth’s services.
He identified reducing members’ out-of-pocket medical expenses as a key priority, aiming to bring it down from 45%–47% to 25%. He also underscored the need for data-driven policy decisions to enhance benefit packages.
Additionally, Mercado has committed to accelerating PhilHealth’s digital transformation to improve efficiency and member experience.
PhilHealth’s leadership transition comes as the agency maintains that it remains financially stable despite the removal of government funding support for 2025.
Speaking at a recent Senate hearing, Ledesma Jr assured lawmakers that PhilHealth’s operations would not be disrupted, citing sufficient financial reserves.
“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,” he said.
The agency primarily relies on member contributions, reserve funds, and investment income to sustain benefit programs. While it was required to return a portion of its funds in 2024, PhilHealth’s PHP600 billion reserve remains intact, allowing the agency to fulfill its financial obligations in 2025 without subsidy assistance.
In 2024, PhilHealth increased case rates for medical procedures by 50%, leading to a 95% overall expansion in benefits. Ledesma Jr noted that this has significantly improved financial protection for members compared to the previous year.
Despite PhilHealth’s financial position, healthcare costs in the Philippines are projected to rise by 18.3% in 2025, according to WTW’s Global Medical Trends Survey. This increase is among the highest in the Asia-Pacific region and is driven by rising hospital fees, higher professional service charges, and growing demand for healthcare services.
Across the region, medical inflation is expected to average 12.3%, with the Philippines, Indonesia, and Malaysia experiencing higher-than-average increases. Indonesia is projected to have the highest rate at 19.4%, followed by the Philippines.
The Health Maintenance Organization (HMO) sector in the Philippines has also reported financial challenges, with industry-wide losses reaching PHP4.3 billion in 2023, up from PHP1.4 billion in 2022. As a result, HMOs have been adjusting pricing structures to cope with rising claims costs.
