Healthcare costs in the Philippines are expected to increase by 18.3% in 2025, continuing a trend of double-digit inflation that has characterized the sector over recent years, according to Willis Towers Watson’s (WTW) 2025 Global Medical Trends Survey.
The Philippines ranks second in Asia Pacific for the largest projected growth, following Indonesia’s anticipated 19.4% rise. The regional average is expected to be 12.3%.
The survey, which gathered insights from 348 health insurers across 75 countries, identified several key drivers behind the rising medical expenses.
Factors driving the surge
The surge in costs is attributed to several factors, including an increase in the use of health services, higher hospital and clinic charges, rising professional fees, and a growing prevalence of chronic diseases.
According to Nel Badal, WTW’s head of health & benefits in the Philippines, ongoing negotiations between health maintenance organizations (HMOs) and doctor groups over proposed fee hikes—ranging from 80% to 150%—are likely to further escalate costs.
The projected double-digit inflation for 2025 is driven by a mix of internal and external pressures, including increased medical utilization and the rising cost of advanced medical technologies, Badal said.
HMO sector struggles
The Philippine HMO sector has faced significant financial challenges, with losses jumping from P1.4 billion in 2022 to P4.3 billion in 2023.
These losses have prompted annual pricing adjustments by HMOs to cope with the rising demand for medical services.
Excessive medical costs and strained resources
The survey highlights that over-prescription of tests and treatments—cited by 79% of insurers—is a major internal driver of rising costs.
Externally, the growing reliance on private healthcare due to overwhelmed public systems and the high cost of new medical technologies are contributing to the upward cost trend. Additionally, the expansion of telehealth services, while improving access, has also added to the financial burden on the healthcare system.
The Philippines also faces a shortage of healthcare professionals, further compounding cost pressures and increasing the strain on private providers.
“Continued pressure is being placed on private healthcare providers in the Philippines. Although the rise in availability of telehealth and other virtual care offerings is expanding access to healthcare in the Philippines, it also contributes to increasing costs,” Badal said.
Potential solutions
WTW suggests that addressing the healthcare cost crisis requires a multi-faceted approach, including cost-sharing measures between insurers and patients to discourage overuse of services.
“Cost sharing aimed at apportioning medical costs between insurers and members can also help to manage costs. This will help to minimize overuse and overprescription of care,” the survey said.
Collaborative efforts between stakeholders and the government will be key to developing sustainable solutions that can make healthcare more accessible and affordable.
Financial anxiety grows among Filipinos
A separate survey by Manulife also underscores the growing financial anxiety among Filipinos, with 82% of respondents citing rising healthcare costs as a major concern.
This concern has surpassed worries about inflation and interest rates. In 2022, out-of-pocket health expenditures in the Philippines totaled $9 billion and are expected to reach $13 billion by 2028, placing further financial pressure on households.
Filipinos are increasingly turning to lifestyle changes and cost-saving measures, such as using government healthcare services and opting for generic medicines, to manage healthcare costs.