Philippine healthcare spending rises to 6.7% of GDP in 2025

By Matthew Miguel L. Castillo, Researcher

HEALTHCARE SPENDING accounted for a larger share of the Philippine economy in 2025, as inflation and increased spending boosted health expenditures.

Preliminary data from the Philippine Statistics Authority (PSA) showed national health expenditure rose to 6.7% of gross domestic product (GDP) in 2025 from an upwardly revised 6.2% in 2024.

The 6.7% share was the highest since the PSA began compiling national health expenditure data in 1991.

In 2025, current health expenditure rose by 15% to P1.73 trillion, higher than the revised P1.51 trillion in 2024.

Meanwhile, health capital formation expenditure jumped by 16.7% to P140.52 billion last year. This brought the total health spending to P1.87 trillion in 2025, 15.1% higher than the revised P1.63 trillion a year earlier.

Health expenditures also rose to its highest level since the PSA began tracking data in 1991.

“From a macro perspective, the rise in healthcare spending to 6.7% of GDP and P1.73 trillion reflects a triple effect — higher medical inflation, stronger demand as patients return and chronic diseases rise, and increased government support under Universal Health Care,” Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said in a Viber message.

Inflation on the health commodity group eased to 2.6% in 2025 from 2.8% in 2024. This was the slowest rise in three years or since hitting the same rate in 2022.

“In general, the growth of an increasingly sophisticated middle class has resulted in improved healthcare spending for many Filipinos. General health consciousness trends are also pushing greater basic and discretionary healthcare spending,” Marco Antonio C. Agonia, an economist at the University of Asia and the Pacific, said in an e-mail.

PSA data showed government schemes and compulsory contributory healthcare financing schemes grew by 22.1% to P805.57 billion in 2025, accounting for almost half (46.5%) of the current healthcare spending bill.

Household out-of-pocket payments accounted for 41.2% of current health expenditure, totaling P714.63 billion in 2025. This was up by 7.3% year on year.

Spending via voluntary healthcare payment schemes rose by 17.4% to P213.17 billion, accounting for a 12.3% share of the current health spending last year.

PSA data also showed that health-related spending on a per capita basis reached P15,223 in 2025, 14% higher than the P13,356 in 2024.

Per quintile group, the first quintile saw the fastest year-on-year spending growth at 26.7%. This was followed by the third quintile at 13.3% and the fourth quintile at 13%.

Among healthcare providers, hospitals accounted for 46.7% of total expenditure at P808.95 billion, rising by 85% from P437.19 billion in 2024.

It was followed by retailers and other providers of medical goods with a 27.8% share (P482.57 billion), and unspecified healthcare providers with 6.9% (P118.79 billion).

Retailers and other providers of medical goods made up 27.8% of spending with P482.57 billion in 2025, up by 6.9% from P451.53 billion in 2024.

Unspecified healthcare providers accounted for 6.9% with P118.79 billion, dipping by 0.8% from P119.81 billion a year ago.

Mr. Agonia said that the Philippines’ healthcare spending is “broadly in line” with its Southeast Asian peers, noting it has normalized since the coronavirus disease 2019 (COVID-19) pandemic.

“Compared to our ASEAN (Association of Southeast Asian Nations) peers, we’re somewhere in the middle — not necessarily overspending, but clearly not getting enough efficiency, as high out-of-pocket costs remain a concern. Spending will rise — but the priority is making every peso deliver better health outcomes, not just bigger budgets,” Mr. Ravelas said.

Mr. Agonia said that healthcare spending will likely continue to rise in the next few years.

“The general preference for health and wellness spending, especially for younger generations, will likely continue to grow individual healthcare spending,” he added.

Mr. Ravelas said that he sees healthcare spending growing by 10-12% in 2026, while its share of GDP could rise to around 6.8-7%.

“[Spending this year] may be slightly lower than 2025, but still robust,” he added.