Good afternoon, Your Honors. Good afternoon to everyone in this Session Hall and everyone else listening in.

I would like to begin on a procedural matter. I would like to respectfully ask the Court to drop President Ferdinand Marcos, Jr. as party respondent in G.R. No. 275405. This Court has categorically ruled in Colmenares vs. Duterte, citing Nepomuceno vs. Duterte, that the President of the Republic cannot be sued during his tenure. His immunity applies regardless of the nature of the suit against him. I find no reason for the Court to depart from this well-settled doctrine.

To continue, Your Honors: the political branches of our government have been unjustly vilified on account of the fund balance transfer from the Philippine Health Insurance Corporation to the Bureau of Treasury. Insidious motives have been imputed upon respondents. They have even been accused of technical malversation.

I am therefore glad that today I am given the opportunity to provide the proper context for the actions of—and in the process vindicate—the executive and legislative branches of government. I assure the Honorable Court and the people that, contrary to what has been portrayed by some critics, there was no dark or sinister plan behind the transfer of the P60 billion fund balance from PhilHealth to the Treasury.

Rather, I will emphasize that said transfer was a temporary measure to address—within legal bounds, of course—concerns on fund availability for important government programs and projects. Under our system of government, such concerns fall exclusively within the mandate shared by the executive and the legislative departments. As the Honorable Court declared in the case of Syjuco, Jr. v. Abaya,

…[T]he Executive Branch determines the government budgetary priorities and activities in line with available revenues and borrowing limits. The Congress, in turn, deliberates and acts on the budget proposals of the President. Once the Congress approves the national budget and legislates the General Appropriations Act, the executive department “exercises all roles and prerogatives” in the implementation and enforcement thereof, unless otherwise provided by the Constitution. xxx”

Amidst this interplay of powers, the Department of Finance takes on the primary responsibility to manage in a sound and efficient manner the financial resources of the Government, its subdivisions, agencies and instrumentalities. In a sense, the DOF acts as custodian and manages all financial resources of the national government.

As the government’s steward of sound fiscal policy, the DOF formulates revenue policies to fund critical government programs that promote welfare among our people and accelerate economic growth and stability. Consequentially, the DOF must generate and manage financial resources to help attain the government’s development objectives.

Primordial among these objectives is the provision of basic public services in the fields of health, education, and infrastructures, among others.

As luck would have it, however, the money needed to provide these essential services does not come easy in our side of the world. But as they say, scarcity breeds creativity. And oftentimes, creative and innovative solutions are born out of something as common as “common sense”.

Your Honors, the Congress’s inclusion of Special Provision No. 1(d) in the General Appropriations Act of 2024 and the DOF’s issuance of Circular No. 003-2024 are the government’s common-sense approach—again, within legal bounds—to temporarily eke out the cash needed for the National Government’s numerous priority programs.

Under Special Provision No. 1 (d), the Unprogrammed Appropriations shall be sourced from “any remainder resulting from the review and reduction of the GOCC’s reserve funds to reasonable levels taking into account the disbursements from prior years.” Here, you can see that the Congress, in the exercise of its sound judgment considering the exigencies of the times, found it necessary to: (1) direct GOCCs to review and reduce their reserve funds to reasonable levels on the basis of their previous annual disbursements; and (2) once the new level of reserve funds has been determined, to utilize the remainder for the financing of the unprogrammed appropriations. This remainder is the pool from which the so-called “fund balance” would be computed.

Pursuant to this Congressional directive, the DOF issued its assailed Circular No. 003-2024 to lay down the necessary guidelines to implement this Special Provision No. 1(d).

The DOF defined “fund balance” as the unrestricted funds of the GOCCs in the form of cash, investment in securities, and government subsidy, among others.

In the case of Philhealth, the fund balance was computed by adding the total amount of government subsidies for indirect contributors (e.g., senior citizens, indigent persons, persons with disabilities) for the years 2021 to 2023, and subtracting the total amount of benefit claims of indirect contributors during the same three-year period.

During this three-year period, the total government subsidies to Philhealth amounted to Php239.11 Billion, while the total benefit claims of indirect contributors amounted to Php149.23 Billion only. In particular, the government subsidies exceeded the total benefit claims of indirect contributors by P27.12 Billion in 2021, by P23.97 Billion in 2022, and by P38.79 Billion in 2023, for a total of P89.9B.
PhilHealth’s fund balance of PhP89.9 Billion was thus an accumulation of three years’ worth of government subsidies which had remained unexpended or unutilized as of the end of 2023.

What then should we do with this unutilized surplus?

The P5.7 Trillion Budget for 2024 could only fund the Programmed Appropriations for specific priority projects that were intended to foster economic and social transformation and mitigate the effects of inflation on basic commodities, as well as to advance the government’s 8-Point Socioeconomic Agenda.

In the 2024 GAA, however, other important programs—from government infrastructures to health-related and other social programs—were identified but would have to stand by until new or additional financial resources became available. These were the Unprogrammed Appropriations.

It might have been less complicated if the National Government simply borrowed money. But then, we must consider that, as of the end of February 2024, the National Government debt was already recorded at P15.18 trillion. Based on a population of 114 million in 2025, every Filipino—young and old, rich and poor, abled and disabled— is indebted in the amount of P139,000.00 each. This is rather heavy.

It is in this cash-starved context that the Congress trained its sight on money that was there but was not being productively utilized.

Respondent Congress, in its wisdom, identified the fund balance of government corporations as a source of additional funds to finance the Unprogrammed Appropriations. Respondent DOF, in issuing Circular No. 003-2024, merely implemented the Congressional directive. More importantly, the DOF issued Circular No. 003-2024 in fulfillment of its mandate to generate and manage the financial resources of the government “judiciously and in a manner supportive of development objectives.”
This is the legislative wisdom behind Special Provision No. 1(d), as implemented by DOF Circular No. 003-2024. It was the executive and legislative departments’ way of creating and implementing a fiscal policy to boost economic growth without bloating the government’s indebtedness or burdening the people with new tax measures. It is a common-sense approach that does not violate any law, much less the Constitution, in any way.

Given the foregoing, it is our submission that:

(1) At the time the Petitions were filed and, even so now, the requisites for the Honorable Court’s exercise of the power of judicial review were not satisfied;

(2) Special Provision No. 1(d) in the 2024 GAA which authorized the use of government corporations’ fund balances to finance the identified purposes in the Unprogrammed Appropriations is a valid enactment for the following reasons:

a) Respondents did not violate Section 25(1) of Article VI of the Constitution which prohibits the Congress from increasing the appropriations recommended by the President for the operation of the Government as specified in the budget;

b) Being germane to the purposes of the 2024 GAA, the subject Special Provision is not a rider;

c) Neither does it violate Section 25(5), Article VI of the Constitution for the simple reason that it does not involve savings as presently defined, nor is it an illegal transfer of appropriations;

d) It does not contravene Section 29(3) of Article VI of the Constitution, considering that the amounts collected from Sin Taxes are not hard earmarks resulting in the creation of a special fund, in the manner, for example, that coconut levies constitute a Special Trust Fund;

e) The Bicameral Conference Committee acted within the bounds of its authority.

We further submit that DOF Circular No. 003-2024 is valid for the following reasons:

a) The DOF was specifically authorized by law to provide the guidelines to implement Special Provision No. 1(d);

b) No part of the corpus of PhilHealth’s reserve fund, after having been reviewed and reduced to a reasonable level, reverted to the National Treasury;

c) Only Philhealth’s excess fund amounting to P60 billion was remitted to the Treasury and in the process contributed to the implementation of health-related programs amounting to about P46 billion under the Unprogrammed Appropriations;

d) The Secretary of Finance did not usurp the President’s authority to transfer appropriations to augment any item for the simple reason that, as earlier explained, the process did not involve “savings” as presently defined under the GAA.

Indeed, our government will not be acting with common sense if it shelved other much-needed projects because one pocket is short on funds, while knowing fully that there is abundance in the other. Using the petitioners’ own words, there can be no greater act of “negative social justice” and “disservice to Filipinos” if that were to be the case.

Mr. Chief Justice, Honorable Members of this Court, thank you for your time and attention. I am now ready to answer your questions.