Philippines health department faces audit gaps in 2025 accounts and medical inventory

Traders Union
All News
Regulators
Philippines health audit gaps

Highlights

Commission on Audit found the Department of Health had P2.24 billion in unadjusted accounting errors, surpassing the P1.85 billion materiality threshold on P185.38 billion expenditures for 2025.
Audit revealed P226.16 million in expired medical supplies and P242.36 million in idle medical equipment across 120 health facilities, linked to procurement planning and monitoring gaps.
Only 118 of 327 previous years’ audit recommendations were implemented in 2025, with outstanding suspensions, disallowances and charges reaching P9.57 billion.

Audit findings in accounts and medical supplies

As reported by BusinessWorld Online, the Commission on Audit said the Department of Health had P2.24 billion in unadjusted accounting errors and omissions in its 2025 financial statements, above the P1.85 billion threshold equivalent to 1% of the agency's total expenditures of P185.38 billion. Auditors said that level means the discrepancies could materially affect the department's financial statements.

A consolidated audit covering 120 health facilities found unadjusted errors affecting assets by P2.25 billion, liabilities by P1.28 billion and equity accounts by P2.83 billion. The audit also found P226.16 million worth of expired drugs, medicines and medical supplies as of Dec. 31, 2025.

State auditors said weaknesses in procurement planning, demand forecasting, distribution and warehouse monitoring prevented medical inventory from being used or distributed on time. They also flagged policy and implementation gaps in healthcare financial assistance programs, including the Medical Assistance to Indigent and Financially-Incapacitated Patients program and the zero-balance billing policy.

Operational impact on health facilities and programs

Auditors flagged P242.36 million worth of medical equipment under 338 contracts in the Health Facilities Enhancement Program that remained idle, unused or undelivered. The Commission on Audit linked the problem to planning and monitoring gaps, saying specialized equipment was procured before officials confirmed whether facilities had suitable sites, enough space, adequate electrical capacity or completed buildings.

Findings across three Centers for Health Development and five other operating units included inconsistent financial assistance limits, undisbursed and unliquidated funds, deficits shouldered by health facilities and inconsistent application of program guidelines. Auditors said these shortcomings threaten efforts to reduce out-of-pocket healthcare costs for financially disadvantaged patients.

Meanwhile, 209 of 327 audit recommendations from previous years remained unimplemented at the end of 2025, while outstanding suspensions, disallowances and charges against the department reached P9.57 billion. Department of Health officials agreed to tighten procurement protocols, improve project monitoring and strengthen inventory controls.

Our earlier article on NAFDAC’s crackdown on counterfeit and non-compliant food and drug products in Nigeria detailed how the regulator destroyed unsafe goods valued at N22.73 billion in the first eight months of the year. It highlighted intensified monitoring of distribution channels to remove harmful products from circulation and warned that sustained enforcement would raise compliance pressure on importers, distributors, and retailers.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.