A solo-host podcast episode (Ep. 135) by John Jonas combining personal anecdotes (family travel in Europe, dad-style observations) with a practical explainer about a PhilHealth contribution rate increase in the Philippines. The host explains that the previous minimum PhilHealth premium was 300 PHP/month (based on a 10,000 PHP salary and a ~3% rate), and that PhilHealth raised contribution rates toward 4–5% (noting a new 4.4% figure or a move toward 4%), increasing the minimum to about 400 PHP/month and applying increases retroactively. He discusses implications for employees/OFWs (loan appearance, reported income) and advises employers to check with staff and consider helping cover burdensome retroactive payments.
Chapters
Welcome to the Secret Sauce of Outsourcing podcast that's dedicated to making you better at outsourcing to the Philippines. This is episode 135, Philhealth contributions rate hike. So I'm a typical dad in some ways and not typical in others. I mean, I just took a mini retirement, which is probably not super typical. I took a month off and went and spent time with my kids and my wife in Europe. I work from home, which is more typical now. But my kids have never known me to leave for work. They don't understand that dad's. Most dads go to work. They have no clue. So those ways I'm not typical. But then there's the ways that I'm like, super, super typical. When we were in Europe, we visited a number of cathedrals, and so I wanted to explain things to them. When we come up on something interesting, then I want to explain it. And my kids are like, rolling their eyes. So I was just. We are members of the Church of Jesus Christ of Latter Day Saints. A lot of people call us the Mormons. And so my kids have never really been to a Catholic church or to a Catholic cathedral. So in Europe, we're in these cathedrals. And I was explaining to them what a confessional booth is, and my son took a picture of him smiling at. Took a selfie of him smiling at the camera while I'm explaining things, because he's like, oh, look, here's an event. Dad's explaining something again, right? Or we're in a castle and we go across a drawbridge, which they didn't notice it. They say they did, but they didn't notice the drawbridge. And I stopped and made them come back and like, hey, look, here's this. Here's an actual drawbridge. You guys have seen this in pictures or in stories or whatever. Here's an actual one that's real. You just walked across it. You didn't notice it. Do dad. We all saw it and we talked about it. I was right there. They didn't see it, they didn't talk about it. They made fun of me for the rest of the trip. You know, I'm just a dad and telling dad jokes and dumb dad things. I'm just. When I'm just trying to explain stuff to them, it's been a source of humor for them quite a bit and a source of embarrassment for me. Sometimes I don't really get embarrassed that much. So here's an explainer for you about PhilHealth. So if one of the benefits that you're paying to your people is paying their PhilHealth, you ought to know what's going on. So PhilHealth, which is the thing Philippines socialized medicine. And it's not exactly like the way you would imagine socialized medicine where everything gets taken care of. It's really just kind of a discount program. But they just announced they are increasing the rates for people. So for the last few years, the minimum contribution has been 300 Filipino pesos per month, which is about $5.75 a month. And that is based off of the average salary of 10,000 per month and not the average salary like the low salary of 10,000 Filipino pesos a month. That's like $191, which is super, super low. And they calculate like a 3% rate. And so it's 300 pesos per month that you have to pay into PhilHealth if you're making your contributions, which if you want to get, if you want to take advantage of PhilHealth when you have a problem, you have to be paying into it. So they are now changing the percentage to be 4.4percent of salary or 400 pesos per month. If you're making that super small amount. And whatever your worker's salary is, the amount that they pay is a percentage based off of what their salary is. And other things are dependent on this. So like when they go to get a loan, well, they've already reported their income. By paying into PhilHealth and SSS, you're paying a percentage of your salary. And that percentage, if you're just paying a super small amount, well then when you go to get a loan, you don't make that much money. So they have to kind of be honest about it. So now that is a rate hike of 100 pesos per month for on the super, super low end, which is $2. But for others, it's. It can be quite a bit more. And they made the rate hike retroactive. So let me explain this. Here's what's going on the. Under the Philippines universal health care law, they set the rate for paying into PhilHealth at 5%. However, for a long time they've only required premiums of 2%. In 2019, they increased that to 3%, but then it was increasing it to 5 was delayed for a couple years because of the pandemic. So they just increased it to 4%. So if your OFS has paid in ahead of time, they're now required to go back and add the payments that they should have been making if it was at 4% the whole time. They have to add make those payments now. This could be quite a burden on someone, obviously. I mean, if you have. I don't. I'm not sure how retroactive it is if it's just for 2022 or if it's multiple years past, but it can be a burden. So it might be a good idea to talk to your ofs and ask them, hey, how much of a burden is this on you and how much have you paid? How much are you required to pay in? And you might want to consider helping them out, depending on your situation and their situation.
