HomeDLSU Business & Economics Reviewvol. 27 no. 1 (2017)

Making Social Health Insurance and Micro-Savings Programs Work for the Informal Sector in the Philippines

Mitzie Irene P. Conchada | Marites Tiongco



In the Angelo King Institute annual report of Monitoring the Philippine Economy, the Philippines maintained its growth momentum in 2014, besting other Asian economies. Given this backdrop, it is interesting to find out whether various sectors have benefited from this growth, particularly the informal sector which includes bulk of the poor who are self-employed and are mostly engaged in the services sector. The intention of this study is aimed to determine the effect of social protection, particularly social health insurance program (known as PhilHealth Insurance) and the micro-savings scheme (known as AlkanSSSya) on informal sector especially those who are poor and self-employed. By the end of 2014, total benefit payment for all sectors amounted to PhP78.2 billion (PhP19.2 billion for the informal sector). Since the government spends so much on PhilHealth, especially with its expansion of the indigent program, there is a need to investigate the effectiveness of the program especially on the poor. Utilizing data from the Community Based Monitoring Survey (CBMS) collected in 2015 from selected provinces in the Philippines, the propensity score matching method showed that those who availed of PhilHealth Insurance (both individual paying and sponsored member) have a higher total income and income in cash compared to those who did not avail (PhP288 and PhP595 respectively). PhilHealth Insurance beneficiaries are also more likely to have higher total sales from entrepreneurial activities in the informal sector (PhP69) than non-beneficiaries. On the other hand, AlkanSSSya beneficiaries also had higher annual income, higher total sales from entrepreneurial activities, and higher expenditure than non-beneficiaries (PhP986, PhP18, and PhP304 respectively). The results support the claim that social protection is indeed effective in improving the income of the poor, especially those who are dependent on the informal sector. Expanding the coverage of the programs for the informal sector, thus, will aid in increasing social inclusion and in reducing poverty levels.