PhilHealth fund transfer challenged at Supreme Court

MANILA, Philippines — The Philippine Medical Association, Senate Minority Leader Aquilino Pimentel III and eight other parties asked the Supreme Court yesterday to bar the Philippine Health Insurance Corp. (PhilHealth) from transferring P89.9 billion in excess funds to state coffers.

The other petitioners are former finance undersecretary Cielo Magno, Dr. Minguita Padilla, former vice presidential spokesman Barry Gutierrez, Likhaan Center for Women’s Health director Dr. Junice Malgar, urban poor leader Ernesto Ofracio, law professor Dante Gatmaytan, Sentro ng mga Nagkakaisa at Progresibong Manggagawa and Public Services Labor Independent Confederation Foundation Inc.

A circular from the Department of Finance (DOF) directing government-owned and controlled corporations to remit unused subsidies, anchored on a newly introduced provision in this year’s General Appropriations Act (GAA), sparked the petition, arguing that it is “unconstitutional” and amends all existing laws creating GOCCs.

Magno argued that it is not right to redirect excess funds to other projects identified by the House of Representatives under unprogrammed appropriations in the GAA.

On One News’ “Storycon” yesterday, Magno urged Congress to refine the rules in the bicameral conference to prevent the insertion of “riders” – which are prohibited in the Constitution – such as the GAA provision to use GOCC funds for unprogrammed appropriations.

Responding to the executive’s claim that the transferred funds were government subsidies and not the contributions of members, Magno said there should not be a distinction as this subsidy may be considered as “indirect contribution” of senior citizens and other marginalized sectors.

“Whether that’s subsidy or direct payment of members of PhilHealth, once it is there, that already falls under a single PhilHealth fund that only has two purposes: either one, expand our benefits or two, reduce our premiums,” she added.

PhilHealth has remitted P20 billion to the government, which was used to finance the health emergency allowance of health care workers, but Magno said reallocating the subsidies for other health care initiatives did not make the transfer justifiable.

The petitioners asked the high court to return the transferred funds and halt any further diversions.

Finance Secretary Ralph Recto defended the transfer before a Senate panel on Tuesday, emphasizing that the department only executes what the law mandated.

Unprogrammed funds, which the Department of Budget and Management defined as “standby funds outside the approved government fiscal program” used for unforeseen expenses, ballooned this fiscal year to P731.5 billion, triggering a separate Supreme Court petition from opposition figures led by Albay Rep. Edcel Lagman. The case remains pending.

The DOF said in a statement on July 15 that tapping “unused and idle” funds from GOCCs was “more prudent” than raising taxes or incurring debts.

But Magno accused the government of “fiscal mismanagement” for inserting too many programs in the GAA without securing funds to pay for them. — Rhodina Villanueva, Janvic Mateo