Finance Secretary Ralph G. Recto defended the national government’s move to implement Congress’ mandate to redirect the government-owned and controlled corporations’ (GOCC) excess and idle funds to critical health and social programs as a crucial policy to accelerate economic recovery, stressing that reversing this would entail fiscal pressure.
“The move to sweep the unused, excess, idle funds of GOCCs is in line with the principles of our Medium-Term Fiscal Framework to ensure the country’s macro-fiscal stability. And that is to consolidate all public resources so that these are mobilized and utilized to gain the maximum benefit and high multiplier effects for the economy and the Filipino people,” he said.
The MTFF aims to reduce the country’s fiscal deficit from a high of 8.6% of GDP in 2021 to 3.7% by 2028 and cut national debt from 60.9% of GDP in 2022 to 56.3% in 2028, while creating more jobs, increasing incomes, and slashing the poverty rate to a single digit by the end of the Marcos, Jr. administration’s term.
“[I]f the ruling [to return the money to PhilHealth] were for 2025, that will add a fiscal pressure to our deficit, and that would entail us not hitting our deficit targets this year. And if you miss that, then we may not attain our coveted credit rating upgrade that we foresee in the next 18 months,” the Finance Chief stressed.
Secretary Recto explained the principle behind the policy, emphasizing that the sweep will help the country grow faster while it continues to recover from the pandemic as well as navigate ongoing geopolitical tensions.
“Just as what we did during the pandemic through Bayanihan 1 and 2, we see this as a Bayanihan 3—a Bayanihan 3 that mobilizes all our available resources—all idle, excess, and sleeping public funds—to help the economy recover faster,” he stressed.
“We wouldn’t be doing our job, Your Honor, if we willfully neglect our duty to exercise fiscal prudence in this matter just because it is unusual. We wouldn’t be doing our job if we clung to convention over common sense,” Secretary Recto added.
He appeared for the fourth time before the Supreme Court for the oral arguments on the consolidated petitions challenging the constitutionality of reallocating excess funds from PhilHealth to the National Treasury to supplement unprogrammed appropriations in the General Appropriations Act (GAA) of 2024.
Special Provision 1(d) of the 2024 GAA authorized the utilization of GOCC fund balances to finance key programs in health, social services, and infrastructure under the unprogrammed appropriations. It mandated the DOF to implement this provision, which led to the issuance of clear guidelines through DOF Circular No. 003-2024.
