MANILA, Philippines (Updated 6:03 p.m.) — A petition challenging the transfer of of excess funds from the Philippine Health Insurance Corp. (PhilHeatlth) back to national coffers was challenged in the Supreme Court by Sen. Aquilino Pimentel III, economist Cielo Magno and other groups.
In a memorandum circular, the Department of Finance (DOF) directed Philhealth to return P89.9 billion back into the Bureau of Treasury as these were unutilized funds.
According to a statement on Friday from the broad alliance Action for Economic Reforms (AER), Pimentel, Magno, along with the Sentro ng Mga Nagkakaisa at Progresibong Manggagawa Inc., Public Services Labor Independent Confederation Foundation Inc., and the Philippine Medical Association, have taken legal action.
“Concerned citizens and organizations filed a Supreme Court petition to block the diversion of PhilHealth reserve funds and to return to PhilHealth the P20 billion taken away by the national government,” the petitioners said.
“The petitioners assert that the insertion of the provision in the 2024 General Appropriations Act on unprogrammed appropriations and the consequent issuance of the Department of Finance circular are unconstitutional,” they added.
The P20 billion that the alliance is referring to is the portion of the P89.9 billion. However, this was already used to finance the unpaid health emergency allowance of healthcare workers.
The AER said that the funds should have been used to implement the Universal Health Care (UHC) Act, the expansion of benefit packages and reducing premium rates.
Finance Secretary Ralph Recto defended the transfer, saying that the DOF was merely following Congress’ order in the 2024 General Appropriations Act that unused or hibernating funds should be transferred back to the government.
“The Congress said in the 2024 budget that the DOF should be the one to issue a circular so that it could use funds that are possibly hibernating, sleeping or unused by other GOCCs (government-owned and controlled corporations),” Recto said in July.
In their petition however, the AER argued that it was unconstitutional, citing Article VI, Section 25 (2) of the Constitution, which said that the general appropriations bill could not have provisions unless it pertained to a specific appropriation.
The alliance also cited Section 26, which said that “every bill passed by Congress shall embrace only one subject which shall be expressed in the title thereof.”
“By diverting the funds to the unappropriated programs of the national budget, the Congress has given the Executive Branch the discretion to decide how to spend funds which have been earmarked specifically for the implementation of the UHC Act. The Supreme Court has maintained in previous cases that any provision in a general appropriations bill which intends to repeal or amend other laws is unconstitutional,” the AER said.
The AER also stated that the DOF’s memorandum circular was also unconstitutional. They argued that the funds are still needed to help implement the UHC, which has a 10-year implementation timeline.
“The myriad of problems plaguing the nation’s healthcare system mean that the purpose of the special fund persists, and that the fund should therefore not be used for purposes other than which it was created,” the group added.
In response to the case, Recto said that the DOF has yet to receive a copy of the petition but respects the petitioners’ right to file it. He asserted that the DOF is ready to answer any question regarding the legality of its memorandum circular.
“I reiterate that whatever measures by the government to source financing for its programs and projects are undertaken consistent with the belief that its capacity to address the primary needs of our people—including health—is not compromised,” Recto said in a statement.
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