Sen. Ralph G. Recto today said there’s no need to impose a 160-percent increase in the members’ contributions to Philippine Health Insurance Corp. (PhilHealth) considering its enormous cash “reserves” and huge subsidies from government.

“PhilHealth could achieve viability and attain efficacy in its delivery of services without having to impose another burden to its members, which is essentially another form of payroll tax,” Recto said.

Like deductions for withholding tax, SSS/GSIS, and Pag-IBIG, PhilHealth contributions are also automatically deducted from the payroll of workers.

Recto said PhilHealth may always decide to tap its retained earnings, which have peaked to P110 billion in 2010, to bankroll expansion of services and benefits such as reducing “out of pocket expenses” of members.

He said aside from sitting on its retained earnings that could eclipse by two-fold the entire budget of the Department of Health (DOH), PhilHealth is also a consistent top recipient of state subsidies.

From January to November in 2011, PhilHealth was among the top agencies that have received the biggest slice of the P45.205 billion subsidies given out to state-owned corporations.

In the first half of last year, PhilHealth already racked up P5.1 billion in subsidies from government.

The same GOCC is expected to receive the biggest part of this year’s programmed GOCC subsidy of P18.7 billion.

On top of the subsidies, PhilHealth stands to receive P1.5 billion in the 2012 budget to cover premium payment arrears covering 2.9 million indigent families.

“What happened to these subsidies? And what are you doing with your billions in retained earnings?” Recto asked.

The senator added that the planned hike in premium payments would hurt struggling small and medium enterprises (SMEs), which have to contend with a buffet of regulatory compliance like membership in SSS, PhilHealth and Pag-IBIG.

“And we’re making it worse by increasing the premium payments of their workers, which are shouldered in part by them,” Recto said adding that even local government units (LGUs) would be adversely affected by the move and as a result, create havoc in their fiscal planning for this year.

He said job generation would also be stifled as a result of the increase in PhilHealth premiums since companies will have second thoughts hiring more workers for fear of bloating their operating budget.

“I’m not aware of any consultation held on this matter. We are slashing the IRA of LGUs this year and here we are, making the life of LGUs more difficult by increasing the premiums of PhilHealth members,” the senator, who chairs the Senate ways and means committee and sits as senior vice-chair of the Senate budget panel, said.

In a circular approved by its board, PhilHealth premium contributions for new members will increase from P300 to P600 quarterly or a total of P2,400 per year.

Covered by the increase are members who are earning P25,000 a year based on their income tax returns.