The executive and legislative branches of government are set to appear before the Supreme Court on February 4, 2025 for oral arguments to shed light on the just cause behind the Philippine Health Insurance Corporation’s (PhilHealth) transfer of excess funds to the national government to finance priority public projects and programs.
The Supreme Court will hear oral arguments on the consolidated petitions challenging the constitutionality of remitting excess funds from PhilHealth to the National Treasury to finance the unprogrammed appropriations in the General Appropriations Act (GAA) of 2024.
The respondents include the House of Representatives, represented by the Speaker Ferdinand Martin Romualdez; the Senate of the Philippines, represented by Senate President Francis Escudero; Department of Finance (DOF) Secretary Ralph Recto; Executive Secretary Lucas P. Bersamin; and PhilHealth, represented by its President Emmanuel R. Ledesma, Jr.
The 2024 GAA specifically mandated the DOF to issue guidelines to implement the sweep of the excess and idle funds of government-owned and -controlled corporations (GOCCs) to finance the imposed appropriations in excess of what the executive branch had originally proposed. This includes critical health, social, and infrastructure projects.
The move is consistent with the Medium-Term Fiscal Framework (MTFF), which is the government’s fiscal consolidation plan to ensure that government resources are mobilized and utilized to gain the maximum benefit and high multiplier effects for the economy.
In fulfillment of the law, the DOF consulted the Governance Commission for GOCCs (GCG) and sought the legal opinions of the Government Corporate Counsel (OGCC) and the Commission on Audit (COA) to ensure full compliance. It likewise reviewed and studied the provision to determine its merit, assessing if it will help in growing the economy.
An extensive review of the financial statements of all GOCCs was conducted and revealed that PhilHealth had accumulated a substantial sum of excess, unused, and idle funds over the past few years, amounting to PHP 183.1 billion.
However, the DOF exercised a prudent and moral decision to limit the return to the excess, idle, and unused government subsidies from 2021 to 2023, thus arriving at PHP 89.9 billion.
As of December 19, 2024, PhilHealth has remitted PHP 60 billion in excess funds, about 78% of which were used to finance critical health projects.
These include the Public Health Emergency Benefits and Allowances for Health Care and Non-Healthcare Workers during the COVID-19 pandemic (PHP 27.45 billion); the Medical Assistance to Indigent and Financially Incapacitated Patients (PHP 10 billion); the Procurement of various medical equipment for Department of Health (DOH) hospitals, local government units (LGU) hospitals, and Primary Care Facilities (PHP 4.10 billion); construction of three DOH health facilities (PHP 3.37 billion); and the Health Facilities Enhancement Program (PHP 1.69 billion).
The rest of the excess funds also financed government counterpart financing for foreign-assisted infrastructure and social development projects that will accelerate the delivery of healthcare services to remote areas and enhance the health and well-being of Filipinos by ensuring food security.
Mobilizing PhilHealth’s excess funds will not in any way hamper its ability to provide quality services to its members. In fact, it remains in a strong financial position, which has enabled it to expand its benefit packages last year. PhilHealth’s total assets amount to PHP 598 billion as of the end of September 2024.
