Government Corporate Counsel Solomon M. Hermosura has defended the Philippine Health Insurance Corporation’s (PhilHealth) transfer of its excess funds to the National Treasury, arguing that it was lawful, does not impair the constitutional right to health, and petitions should be dismissed by the Supreme Court.

“PhilHealth’s remittance of its fund balance to the National Treasury, in compliance with Department of Finance Circular 003-2024, is lawful,” Atty. Hermosura said in his opening statement at the oral arguments in the Supreme Court on February 4, 2025.

“It is lawful because, contrary to the claims of petitioners, the fund balance is not part of PhilHealth’s reserve fund. And the funds of PhilHealth, including that part sourced from sin taxes, are not a special fund under the Constitution,” he added.

Special Provision 1(d) of the General Appropriations Act (GAA) of 2024 authorizes the utilization of government-owned and -controlled corporations (GOCC) fund balances to finance key programs in health, social services, and infrastructure under the Unprogrammed Appropriations. It mandates the DOF to implement this provision, which led to the issuance of clear guidelines through DOF Circular No. 003-2024.

Atty. Hermosura further emphasized that PhilHealth’s return of fund balance “does not impair the constitutional right to health,” noting that despite remitting PHP 60 billion in excess funds last year, the agency’s operating budget for 2025 has increased to PHP 284 billion or PHP 25 billion more than its 2024 budget.

“The operating budget of PhilHealth has increased by 58% during this administration from the 2022 budget of PHP 166.5 billion. While advancing universal healthcare, PhilHealth observes fiscal accountability and good governance as an essential prerequisite for our national development,” he stated.

“PhilHealth’s board and management are doubling their efforts to advance universal health coverage. In 2024, PhilHealth increased the all case rates package by at least 95%. PhilHealth also approved and implemented massive enhancements in outpatient packages for chronic conditions to offer greater coverage for critical and life-saving treatments,” he added.

Atty. Hermosura further underscored that Section 2 of the Universal Health Care Act prescribes the adoption of a comprehensive approach, model, or framework as the first step for the country to realize universal health care. Funding comes after the development and adoption of programs.

“Thus, we submit that there is no violation of the people’s constitutional right to health when PhilHealth adheres to fiscal responsibility and submits to the authority of the President and the Secretary of Finance to respond to the imperatives of the national interest while carrying its mandate to advance health care,” he said.

The oral arguments on the consolidated petitions challenging the constitutionality of remitting excess funds from PhilHealth to the National Treasury will resume on February 25, 2025.

The respondents of the cases include the House of Representatives, represented by the Speaker Ferdinand Martin Romualdez; the Senate of the Philippines, represented by Senate President Francis Escudero; DOF Secretary Ralph Recto; Executive Secretary Lucas P. Bersamin; and PhilHealth, represented by its former President Emmanuel R. Ledesma, Jr.