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Public Health Expenditures, Income and Health Outcomes in the Philippines

Deluna, Roperto Jr and Peralta, Tiffany Faith (2014): Public Health Expenditures, Income and Health Outcomes in the Philippines. Forthcoming in:

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Abstract

This paper studied the relationship among public health expenditures, income and health outcomes in the Philippines. Infant mortality rate, under five mortality rate and life expectancy were used as proxy for health outcomes. Specifically, this paper presented the profile of government health expenditures, income and health outcomes from 1981 to 2010. The study used Vector Autoregressive Analysis and Granger Causality test to determine the direction of relationship of the variables.

Results revealed that health expenditure per capita followed an overall increasing trend with an average growth rate of 6.49% and GDP per capita with an average growth rate of 11% from 1981 to 2010. These correspond to the reduction of infant mortality rate by 1.64% on average, under five mortality by 1.76% and the increase in life expectancy with an average growth of 0.17% from 1981 to 2010. However, VAR results revealed that the past values of public health expenditure has no effect on under-five mortality rates but affects infant mortality rate. This may suggest that the past and present level of health expenditure is not sufficient enough to affect under five mortality rate but is effective enough on alleviating infant mortality rate. Conversely, past and present values of GDP per capita is not sufficient enough to affect infant mortality rate but affects under five mortality rate in the Philippines. VAR estimation also revealed that both health expenditure and GDP per capita has a positive and significant effect on life expectancy. Thus, to improve life expectancy and to reduce child mortality rates in line with the Millennium Development Goals, it requires effective and sufficient health expenditure and a sustainable economic growth.

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