The Department of Health (DOH) is set to launch a pilot phase of its zero balance billing program in specific provincial hospitals managed by local government units (LGUs). This initiative is designed to remove out-of-pocket medical expenses for qualified patients.
P1 Billion Earmarked for Initial Rollout
During a recent press briefing, Health Secretary Teodoro Herbosa revealed that P1 billion from the agency's P448 billion budget for 2026 has been allocated for the program's initial implementation. The scheme will cover patients admitted for basic or ward accommodation in the participating facilities.
"We have actually selected provinces that have fulfilled their commitments to universal health coverage," Herbosa stated. He named Sarangani, Laguna, and Aklan among the approximately five provinces that will be prioritized for the pilot run.
Focus on Higher-Level LGU Hospitals
The pilot will concentrate on selected secondary and tertiary hospitals, also known as Level 2 and Level 3 facilities. These hospitals typically manage more complex medical procedures and higher-cost care. Herbosa explained that Level 1 hospitals are expected to be supported by the increased benefits from the Philippine Health Insurance Corporation (PhilHealth).
He emphasized that the DOH will give priority to LGU hospitals in provinces without existing DOH-run medical centers. "For LGUs that have Level 2 and Level 3 hospitals, these involve more complex procedures and higher cost of care. They will be used for our pilot," the Health Secretary added.
Expanded Support and Hospital Agreements
To cover costs beyond PhilHealth benefits, Herbosa noted that assistance could also be extended through the Medical Assistance for Indigents and Financially Incapacitated Patients program. A key component of the zero balance billing initiative involves formal agreements between DOH and LGU hospitals.
Under these memoranda of agreement, when a DOH hospital reaches full capacity, patients can be transferred to a partner LGU facility while still receiving the zero balance benefit. "I will ask my medical center chiefs to have a memorandum of agreement with an LGU hospital. If the DOH hospital is full, we will transfer them to the LGU hospital but we will cover it, the patient will have zero balance there," Herbosa clarified.
The DOH reported that the zero balance billing program has already assisted around one million patients since President Ferdinand Marcos Jr. mandated its strict implementation during his State of the Nation Address in July 2025. Officials anticipate the expanded rollout will further ease the financial burden on patients with serious conditions and enhance collaboration between national and local health facilities.
Clarification on Guarantee Letters
Secretary Herbosa also took the opportunity to clarify the department's stance on guarantee letters. He stated that the public no longer needs to solicit such letters from politicians to settle bills in DOH hospitals.
"We do not really use guarantee letters. The DOH does not use guarantee letters," he asserted. He explained that the department only issues guarantee letters to private hospitals with which it has a formal Memorandum of Agreement. If a politician or private individual issues a guarantee letter, that person—not the government—should be responsible for paying the bill.
Herbosa added that the acceptance of such letters is at the discretion of the concerned hospital and is not official government policy for DOH-run facilities. This aligns with provisions in the 2026 General Appropriations Act, which restricts the distribution of financial assistance to authorized government personnel or accredited agencies, barring participation from elective officials and political parties in the actual distribution process.
