VERA FILES FACT SHEET: Who’s fit for PhilHealth chief?

President Rodrigo Duterte's appointment of Dante Gierran, former director of the National Bureau of Investigation (NBI), as president and chief executive officer of the Philippine Health Insurance Corporation (PhilHealth), a government-owned or controlled corporation (GOCC), has raised questions on his qualifications for the job.

Gierran, a lawyer and certified public accountant, replaced Ricardo Morales who resignedon Aug. 26 amid investigations of alleged fraudulent schemes and overpriced information technology equipment involving about P15 billion at the state-owned health insurance agency.

During his Aug. 31 public address, Duterte said he told Gierran that the last two years of his term would be devoted to the fight against corruption and that he should look for people (in PhilHealth) to send to jail (for corruption).

In several media interviews, Gierran admitted that he was scared to take on the job because he has neither experience in public health nor knowledge in the operations of PhilHealth.

Gierran's candid statement led to more questions from netizens as well as from political figures, such as Sen. Francis Pangilinan, on his fitness for the job. Netizens cited a provision of Republic Act (RA) 11223 or the Universal Health Care Act that prescribes the qualifications for the agency’s top officer.

In a press release, Pangilinan said Malacanang again “chose to ignore” public health expertise in the selection of Gierran, citing Morales’ stint in PhilHealth that ended “terribly” due to his lack of experience for the position.

Morales, 67, was a retired Army general from Davao City appointed to head PhilHealth in June 2019, less than a month after he was tapped to join the Board of Trustees of the Metropolitan Manila Waterworks and Sewerage System (MWSS).

The agency’s workers union, PhilHealth Workers for Hope, Integrity, Transparency, and Empowerment (PhilHealth WHITE), earlier asked Duterte to appoint an expert on healthcare financing. The union has, however, said it was willing to work with Gierran even if he did not fit the description of a leader it wanted for the agency.

Malacanang argued that Gierran is qualified to lead PhilHealth. Presidential Spokesperson Harry Roque, one of the principal authors of RA 11223, said Gierran has had at least seven years of experience in management and that his skills as an accountant-lawyer would help weed out corruption in the agency until Duterte’s term ends in two years.

Here are four things you need to know about the requirements to become PhilHealth chief:

1. What qualifications does the law provide for the head of PhilHealth?

Section 14 of RA 11223, signed into law in 2019, broadened the qualifications for CEO and president of PhilHealth. It stated that the prospective appointee must be a Filipino citizen who ”must have at least seven years of experience in the field of public health, management, finance, and health economics or a combination of any of these expertise.”

The qualifications for the position were more specific in RA 7875 or the National Health Insurance Act of 1995 -- the law that established the state-run health insurer in 1995 but which had been amended or repealed in parts by RA 9241, RA 10149, RA 10606, and RA 11223. Section 19 (paragraph C) of RA 7875, which had been repealed, stated that the PhilHealth chief “must possess adequate and appropriate training and at least five years experience in the field of health care financing and corporate management.”

Asked if he meets the qualifications under RA 11223, Gierran admitted that he did not have knowledge about public health nor the operations of PhilHealth. However, he said his background in financial management, insurance, and investigation qualifies him for the position. Prior to joining NBI, Gierran worked as a credit investigator and accountant for 11 years in Davao City from 1979 to 1990, according to his profile posted on the Rotary Club of Manila’s website.

In addition, the Governance Commission for Government Owned and Controlled Corporation (GCG), established under RA 10149 in 2011 with the mandate to oversee GOCCs such as PhilHealth, also set minimum standards for the appointment of government corporate directors and officers, including the PhilHealth chief.

Based on Memorandum Circular No. 2019-01 of GCG, the PhilHealth chief must be at least 30 years old, of good moral character, possesses management skills and competence preferably relating to the operations of PhilHealth, and have attended or will attend within three months from the date of appointment a special seminar on public corporate governance.

2. What is the process of appointment for the PhilHealth chief?

Under the same section of RA 11223 that sets the qualifications for PhilHealth president and CEO, it is prescribed that the PhilHealth Board shall recommend to the country’s president a candidate to the post from among the agency’s non-ex officio members who meets the requirements.

On Sept. 11, the PhilHealth Board announced that it has “transmitted” to the president its confirmation of the recommendation to appoint Gierran as chief of the agency. That was nearly two weeks after Duterte made public his appointment of Gierran.

According to PhilHealth, Gierran recently took an oath as director for the indirect contributors sector.

Upon approval of the Board’s recommendation, GCG requires the appointed PhilHealth chief to submit a sworn certificate indicating possession of all qualifications and none of any grounds for disqualification to the agency’s corporate secretary or compliance officer prior to assumption of office.

PhilHealth’s 13-member board of directors, the policy-making and quasi-judicial body of the agency, is composed of eight appointive directors and the five ex officio members, who are the secretaries (or their alternates) of the departments legally required to join the board.

The directors appointed by the president should come from a shortlist prepared by GCG, of whom five are sectoral representatives for indirect and direct contributors, health care providers and employers group, and three directors who are experts on health economics and finance.

Health Secretary Francisco Duque III sits as ex-officio chairman of the PhilHealth Board of Directors with Social Welfare Secretary Rolando Bautista, Labor Secretary Silvestre Bello III, Finance Secretary Carlos Dominguez III, and Budget Secretary Wendel Avisado as ex-officio members.

3. What if the appointed PhilHealth chief does not meet the prescribed qualifications under the laws?

In case the appointed PhilHealth chief is not qualified, based on the prescribed requirements, the GCG shall recommend to the president his “removal from office for cause” even if he already assumed the position, according to Article 9.2 of the commission’s Memorandum Circular No. 2012-05, which crafted the Fit and Proper Rule for the selection of GOCC appointive directors and CEOs.

In the circular, GCG enumerated the minimum standards, grounds for disqualification and the procedure in the appointment or re-appointment of GOCC officials like PhilHealth directors in addition to those prescribed by existing applicable laws or regulations.

The circular also stated that GOCC officials need to maintain all of their qualifications and non-possession of any grounds for disqualifications during their term in office or tenure in the board to avoid being removed or for them to be reappointed.

4. What are the duties and responsibilities of the PhilHealth chief?

According to the 2018 Revised Manual for Corporate Governance of PhilHealth, its head, who both acts as the president and CEO, is “ultimately accountable” for the agency’s “organizational and financial controls.”

Other responsibilities given to the PhilHealth chief include general supervision of the business, affairs, and properties of the corporation and over its officers and employees. He is also tasked to ensure that all orders and resolutions of the board are carried into effect, and report to it all matters that interest PhilHealth.

The president is likewise required to submit to the board the complete reports on disciplinary actions against rank-and-file employees, operations, expenditures and state of affairs of PhilHealth after the end of each fiscal year.

5. How long is the tenure and how much is the salary for the position?

The PhilHealth chief has only a one-year tenure and can be removed sooner for “cause” by the board. One can, however, be reelected every year by the board, according to RA 10149.

Previously, PhilHealth's head was appointed to a six-year non-renewable term from 1995 until 2011, when RA 10149 took effect, limiting the tenure of GOCC board directors to only one year.

Based on the 2019 Report on Salaries and Allowances, the PhilHealth president and CEO has an annual basic salary of P2.10 million, or P175,184.00 a month plus bonuses, allowances, honoraria every meeting of the board, and other benefits that would amount to at least P3.06 million a year.

The COA report showed that Morales, who served PhilHealth for nearly 14 months, earned from July to December 2019 some P2.03 million in salaries, incentives and allowances, including P501,874.00 in allowances and other benefits as Board member.


Sources

Presidential Communications Operations Office, President Duterte appoints former NBI director as new PhilHealth chief, Sept. 1, 2020

Gierra’s qualifications questioned

Resignation of Morales

Alleged corruption in PhilHealth

Profile of Morales

PTV, Kumusta Po Mahal Kong Kababayan? | Meeting on COVID-19 Concerns and Talk to the People on COVID-19, Aug. 31, 2020

ANC, 'Scared but not cowed': New PhilHealth Chief Dante Gierran vows to restore public trust in agency, Sept. 1, 2020

Official Gazette, Republic Act 11223

Senate of the Philippines, Medical, financial expertise needed in PhilHealth, COVID response: Pangilinan, Sept. 1, 2020

CNN Philippines, PhilHealth workers' union willing to work with incoming chief Dante Gierran, Sept. 1, 2020

Presidential Communications Operations Office, Palace vouches PhilHealth chief's competence, Sept. 1, 2020

PTV, WATCH: Palace virtual presser with Presidential Spokesperson Harry Roque, Sept. 1, 2020

Governance Commission for Government-Owned or Controlled Corporations, About us, Accessed Sept. 7, 2020

Official Gazette, Republic Act No. 10149

Governance Commission for Government-Owned or Controlled Corporations, Memorandum Circular No. 2019-01, April 1, 2019

Philippine Health Insurance Incorporated, Republic Act 7875

Philippine Health Insurance Incorporated, About us, Accessed Sept. 7, 2020

Philippine Health Insurance Incorporated, Board of Directors, Accessed Sept. 7, 2020

Official Gazette, Republic Act No. 9241

Official Gazette, Republic Act No.10606

Governance Commission for Government-Owned or Controlled Corporations, Memorandum Circular No. 2012-05, Retrieved from Archive.org

Philippine Health Insurance Incorporated, PHILHEALTH BOARD RESOLUTION NO. 2371 S. 2018 RESOLUTION APPROVING AMENDMENTS TO THE PHILHEAL TH REVISED MANUAL OF CORPORATE, May 10, 2018

Commission on Audit, CY 2019 Report on Salaries and Allowances, Accessed Sept. 7, 2020


(Guided by the code of principles of the International Fact-Checking Network at Poynter, VERA Files tracks the false claims, flip-flops, misleading statements of public officials and figures, and debunks them with factual evidence. Find out more about this initiative and our methodology.)

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