Public Health Spending in the Philippines: A Cointegration and Causality Analysis Using Autoregressive Distributed Lag Approach

Abstract

For several decades now, the budget allocated by the Philippine government health spending (public health expenditure; PHE) has steadily risen, but the desired health outcomes for Filipinos leave much to be desired if viewed historically. This study explains how per capita PHE in the Philippines is conditioned by a set of factors based on time series data from 1960 to 2019. To achieve this, an autoregressive distributed lag model with an error correction model component was designed to estimate long-run and short-run dynamics. Based on the results, income, youth population, industrialisation, and selected health outcomes significantly influence PHE. Since most of the factors exert significant effects, coupled with the finding of a long-run cointegrating relationship and fairly stable parameters, reliable PHE estimates can be made by Philippine health and fiscal authorities and enable policymakers to design and implement the needed level of intervention in the country’s public health sector.