Department of Health (DOH) Secretary Ted Herbosa disclosed on Wednesday, Oct. 1, that there are health facilities in the country whose construction has been left unfinished despite providing full payment to contractors.

Herbosa disclosed this during the hearing of the agency's proposed budget for 2026, brought up by Senator Risa Hontiveros. The matter was first floated in the House of Representatives, which involved the Health Facilities Enhancement Program (HFEP).

Citing DOH data, P170 billion has been allocated to HFEP infrastructure and equipment in the past decade, rising to about P400 billion if commodities and human resources are included.

However, only 200 out of 600 health centers are functioning nationwide, with many facilities not functioning or remaining idle, the House members learned.

Senator Bam Aquino asked Herbosa if there was a health facility wherein a contractor was paid fully, but no construction was initiated.

"Nabuo naman pero hindi tapos kaya hindi rin magamit (It was built, but not completed, so it can’t be used)," Herbosa said, confirming that the contractor received full payment.

Because the contractors walked away, Herbosa said they tried to find another contractor to finish the project using the remaining funds that had not been paid to them.

Senator Erwin Tulfo asked if there's collusion that's happening in these incidents,  similar to what is occurring in the Department of Public Works and Highways,  where some of their officials—possibly at the regional or provincial level—may have colluded with the contractor in carrying out these projects.

Herbosa said that this is also his conclusion.

"Kasi kung ang engineer na nag-inspect from our side, binigyan siya ng clean bill na completed, mababayaran siya. Kasi hindi naman mai-issue kung hindi bibigyan ng inspection na clearance. So yun ang side ko na iimbestigahan ko. Bakit siya nabayaran kung hindi pa completed. Eh dapat yan progress billing po, Madam Chair (Because if the engineer from our side who inspected gave it a clean bill as completed, then it would be paid. It wouldn’t be issued otherwise without an inspection clearance. So that’s the part I will investigate—why it was paid if it was not yet completed. That should have been progress billing, Madam Chair)," he added.

During the hearing, Senator Pia Cayetano asked whether legal action was being taken against contractors who “walked away” from their projects. He pointed out that while some contractors claimed to have delivered only around 30 percent of the work, their contracts obligated them to complete the entire project regardless of partial payments received.

He reminded DOH that under the law, contractors are not allowed to abandon projects, with legislators demanding a detailed report on how many cases were involved.

Cayetano also revealed that Legacy Construction Corporation, the contractor for P107.5 million project for the Southern Philippine Medical Center, had only completed 15 percent of the project since 2021.

"Maybe you can give us an update, Secretary, P107 million, apat na taon na, 15 percent pa lang. Southern Philippine Medical Center, this is a very good hospital so I'm sad for them, kasi they're very productive, they have foreign funding, they help a lot of patients, specifically kids, so I'm really sad to hear this," Cayetano said.

She also added that Royal Crown Monarch Construction and Supplies Corp. was in charge of a P3.6 million project for the construction of three barangay health stations. The contract was terminated.

"You have to give us a report on that, kasi hindi pwedeng by choice nila wag na lang natin tapusin may mas magandang project, may mas malaking project. Hindi tayo pwedeng ganun, Secretary (You have to give us a report on that because contractors cannot simply choose not to finish a project just because there’s a better or bigger one. We cannot allow that, Secretary)," Cayetano added.

Senator Sherwin Gatchalian, who chairs the Senate Finance Committee, cited a 2024 Commission on Audit (COA) report showing that there were 123 unfinished contracts worth P11 billion.

Herbosa said that they fix these things with negotiations, yet they don't get their value for money since the projects are delayed.