Laying the foundations for the privatization of government hospitals


MANILA – The privatization of public hospitals has been going on since the regime of the late president Ferdinand Marcos. The different administrations had different names for it: public-private partnerships, corporatization, user’s service fee schemes, revenue enhancement programs, outsourcing or outright sale. Health groups said privatization has been the framework of almost all health policies and programs of the various administrations since Marcos.

According to the Network Opposed to Privatization, Marcos laid the legal framework for the privatization of government hospitals through Presidential Decree 2029 and 2080, which and legalized the sale of Welfareville Property where the National Center for Mental Health stands through the Republic Act 5260.

The late president Corazon Aquino, on the other hand, prepared the organizational mechanism for privatization by setting up the Committee on Privatization and the Asset Privatization Trust. The Build-Operate and Transfer Law was also enacted during her term, which allowed the private sector to access official development aid for privatization projects.

Privatization as a national government program and policy intensified under the administration of Fidel Ramos after his administration moved vigorously to privatize public health care services. The Philippine Heart Center, Lung Center of the Philippines, National Kidney and Transplant Institute and Philippine Children’s Medical Center became government-owned and controlled corporations – from its previous categorization as public hospitals – and are now earning profits through its expensive health services thus depriving indigent patients of accessible and affordable health care.

(Photo by Anne Marxze D. Umil /

Deposed president Joseph Estrada, on the other hand, implemented the Health Sector Reform Agenda and Executive Order 102 that transformed the functions of the Department of Health (DOH) from a direct service provider to a mere regulator and monitor of services. According to the NOP, the said EO resulted in massive lay offs of DOH employees and dissolution of health programs such as the Malaria and Leprosy Control. Administrative Order No. 181 series of 2001 was also passed, which proposed to corporatize 38 public hospitals. Separate legislations were also filed to corporatize Quirino Memorial Medical Center, Ilocos Training and Regional Medical Center and Western Visayas Medical Center.

During former president Gloria Macapagal-Arroyo’s term, corporatization was the buzzword for privatization. It also pushed for corporatization of 68 public hospitals under the DOH.

President Benigno S. Aquino III’s Universal Health Care Program is no different from the previous government’s health policy. “It is a continuation of the International Monetary Fund-World Bank recipes of Health Sector Agenda and the FourMula One for Health. The Universal Health Care program boasts of the Public-Private Partnership Program and the Philippine Health Insurance Program as its two main pillars,” Robert Mendoza, secretary general of Alliance of Health Workers, said.

Health groups said Aquino has surpassed its predecessor in its aggressiveness to privatize government hospitals and public health care services under its euphemistic slogan of “Universal Health Care for All.”

Mendoza cited the fast tracking of House Bill 6069 or An Act Creating National Government Hospital Corporations filed by Bacolod Rep. Anthony Rolando Golez, Jr., which has been passed by the Committee on Health in the House of Representatives last May 16. The bill proposed to corporatize 26 DOH retained hospitals; among these public hospitals are San Lazaro Hospital, Jose R. Reyes Memorial Medical Center, Veterans Regional Hospital, Baguio General Hospital and Medical Center, Zamboanga City Medical Center among many others.

In the Senate, Sen. Franklin Drilon filed Senate Bill 3130 or the National Government Hospital Corporate Restructuring Act, which also has the same content as HB 6069. These are all strongly opposed by progressive groups.

Aquino also placed the Philippine Orthopedic Center, San Lazaro Hospital, Research Institute for Tropical Medicine, the Eversley Child Sanitariam in Metro Cebu and 21 more regional hospitals under PPP projects for “modernization and improving of health facilities and services” with the promised return in investment in revenue sharing, lease fees per treatment with diagnostic equipment.

“The Aquino government is reneging on its responsibility to adequately provide for public hospitals by reducing subsidy and corporatizing public hospitals. Corporatization of public hospitals is privatization by another name. This will increase the cost of health services and further aggravate the present dismal plight of our poor patients and health workers,” Mendoza said. (

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