Congress can greatly help the Philippine Charity Sweepstakes Office in building up funds for indigent Filipinos through higher contributions to Universal Health Care if it enacts a law to lower the documentary stamps tax rate to 10 percent, PCSO chairman Junie Cua said.
In a Senate hearing conducted by the Committee on Health and Demography led by Senator Joseph Victor Ejercito on 1 February 2023, as he highlighted the agency’s advocacy of boosting funds for the government’s social programs, especially on health.
According to Cua, lowering the DST rate to 10 percent, from the current 20 percent, would hike PCSO’s contributions by 170 percent, from a projected P1.25 billion to almost P3.4 billion, this year or an increase of a little more than P2 billion.
“PCSO’s ability to contribute to the UHC program is being limited by the need to pay 20 percent of our receipts by way of documentary stamp tax and this runs into tens of billions,” Cua indicated.
He added that PCSO’s advocacy now is to convince Congress to reduce DST obligations. Our projection is that a 10 percent documentary stamp tax would result to a contribution of P3.3 billion.
“If the tax is further reduced to 5 percent, the fund will grow to P4.4 billion,” Cua told senators when asked how the PCSO can contribute further to the UHC.
In response, Ejercito vowed that the Senate will study the legislation of the proposed lowering of DST rate, especially noting the fact that more than “P2 billion will be added to the UHC from PCSO alone.”
In perspective, P2 billion can fund 769,230 hemodialysis sessions for indigent diabetic patients considering that the Philippine Health Insurance Corporation coverage rate per session is P2,600.
The same amount can help 125,000 indigent patients with severe dengue, with PhilHealth covering P16,000 per case.
Cua said the aim of raising the funds for social aid is the underlying reason for the PCSO to lobby Congress for a decrease in the documentary stamp tax rate.
PCSO wants Charter changed
The PCSO is also making representations before the House of Representatives for the amendment of its Charter in order to rationalize its revenue allocations to further reduce the burden on the Charity Fund.
“Both initiatives, if approved by Congress, would result to an increase in the agency’s contribution to UHC that would ultimately benefit the public in terms of realizing an improved benefit packages being offered by the government through PhilHealth,” Cua said.
PCSO is one of the fund sources for the implementation of the UHC law, with 40 percent of its “net Charity Fund” to be allocated to the Philippine Health Insurance Corporation for the UHC this year.
In its presentation to the Senate, the PCSO is projecting a P53.23 billion in total retail receipts for 2023. With this, the agency has to pay about P10.65 billion representing 20 percent of retail receipts, in DST.
Charity fund allocation is 30 percent of the total receipts, or around P15.65 billion, which is used to pay the DST, mandatory contributions, and other expenses of the PCSO.
Thus, the projected net charity fund is only around P3.133 billion, 40 percent of which, or P1.25 billion, will be allocated to the UHC.