BMI View: Despite high enrolment numbers with the Philippine Health Insurance Corporation (PhilHealth), further reforms to the Philippines' s healthcare system will be necessary for the country's universal healthcare scheme to galvanise the pharmaceutical and healthcare sector. Factors such as a lack of human resources, poor patient accessibility to clinics and hospitals and limited insurance coverage will all hold back growth in the healthcare sector.
Headline Expenditure Projections
Pharmaceuticals: PHP150.44bn (USD3.33bn) in 2015, rising to PHP156.19bn (USD3.26bn) in 2016; +3.8% in local currency terms and -2.1% in US dollar terms. Forecast unchanged from last quarter .
Healthcare: PHP656.11bn (USD14.52bn) in 2015, rising to PHP722.32bn (USD15.06bn) in 2016; +10.1% in local currency terms and +3.8% in US dollar terms. Forecast unchanged from last quarter.
|f = BMI forecast. Source: WHO, national sources, BMI|
|Pharmaceutical sales, USDbn||3.282||3.328||3.257||3.347||3.520||3.676||3.854|
|Pharmaceutical sales, % of GDP||1.15||1.13||1.08||1.02||0.96||0.91||0.86|
|Pharmaceutical sales, % of health expenditure||24.4||22.9||21.6||20.4||19.4||18.4||17.6|
|Health spending, USDbn||13.463||14.516||15.063||16.372||18.158||19.952||21.946|
The Philippines is ranked in 14th place out of the 20 pharmaceutical markets assessed in Asia Pacific (scoring 45.0 out of 100), trailing the regional average in all subsectors. In Q117, Japan remains by far the most attractive market in the Asia Pacific region (scoring 80.6), followed by Australia (66.0). Compared with its peers, the Philippines's Risk/Reward Index score is dragged down by industry characteristics such as policy enforcement (policy enforcement score of 2.8 out of 7) and per capita spending (score of 2.4 out of 12). Despite scoring below the regional average in many categories, there are plenty of future opportunities and rewards. In particular, scores in two categories stand out positively because they point to future opportunity; namely, a market expenditure score of 12.0 out of 20 and a 3.5 out of five score in population growth. Overall, there are indications that the market is maturing further, with the progressive implementation of a universal healthcare system.
In November 2016, the City of Cebu's Department of Social Welfare and Services' proposed a PHP85mn budget for the Long Life Medical Assistance programme (includes PHP21mn for the hiring of 600 job order workers), which delivers free medicines to elderly city residents suffering from hypertension, diabetes, and arthritis.
In November 2016, Senate Minority Leader Ralph Recto warned the Department of Health's (DOH) proposed 2017 budget will lead to a downsizing of health personnel under the department's Rural Health Practice Program, resulting in a decrease from the current 21,118 personnel to 18,825.
In October 2016, Johnson & Johnson (Philippines) and the Drugstore Association of the Philippines (DSAP) launched the DSAP Mobile Drugstore phone app aimed at using new technology to train and aid pharmacy assistants in DSAP member drugstores.
In October 2016, Department of Health Secretary Paulyn Rosell-Ubial noted that the country is short of 15,000 doctors annually, with the rural areas - where healthcare access faces the most challenges - lacking doctors willing to work there.
Lawmakers intend to increase enrolment with the Philippine Health Insurance Corporation (PhilHealth) from 90% to 100% by 2017, with Senator Loren Legarda noting in October 2016 that an extra PHP3bn (USD67mn) will be added to the Department of Health's budget to see this through.
BMI Economic View
The proposed expansionary 2017 budget marks a significant change in fiscal stance by the new government and should be positive for economic growth as the efficiency of the public procurement process has improved considerably since Aquino's time. A tax reform package was also proposed alongside the budget, which should help to improve revenue growth in the coming years, supporting continued fiscal stability. Nonetheless, we have downgraded the Philippines's budget deficit in 2016 and 2017 to 2.0% and 2.7%, respectively, to reflect revenue stagnation in the January-July period and a change in the government's fiscal stance.
BMI Political View
President Duterte's visit to China on October 18-21 marks a dramatic reversal in the Philippines's foreign policy stance from one that is US-centric, to one that is pivoted towards China. This will not only undermine Washington's geopolitical influence in the region but also will also create numerous opportunities on the economic, investment, and trade fronts between China and the Philippines. Japan and Russia will likely see few changes in their bilateral engagement with the Philippines for now.
The Philippines Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Philippines Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Philippines pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Philippines, to test other views - a key input for successful budgeting and strategic business planning in the Philippine pharmaceutical and healthcare market.
- Target business opportunities and risks in the Philippine pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Philippines.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.