Another petition was filed with the Supreme Court (SC) on Wednesday, Oct. 16, challenging the constitutionality of the transfer of the P89.9 billion excess funds of the Philippine Health Insurance Corporation (PhilHealth) to the national treasury.
This time, the petitioners are the 1SAMBAYAN Coalition, members of the University of the Philippines Law Class 1975, Senior for Seniors Association, Inc., Kidney Foundation of the Philippines, and other private individuals.
They asked the SC to issue a temporary restraining order (TRO) that could stop the Department of Finance from transferring the excess PhilHealth funds.
They cited published reports that Finance Secretary Ralph G. Recto had announced that P30 billion of PhilHealth funds will be transferred to the national treasury on Wednesday, Oct. 16.
The SC did not issue a TRO that was pleaded in the first two petitions. Upon receipt of the comments of the parties, the SC set oral arguments on the petitions on Jan. 14, 2025.
It is expected that the new petition would be included in the oral arguments should the SC act on it and require the respondents in the new case to comment.
Also challenged in the new petition as “unconstitutional” are the special provisions under Paragraph 1(d), Chapter XLIII of Republic Act No. 11975, the General Appropriations Act of 2024, and Department of Finance (DOF) Circular 003-2024.
The new petition told the SC that in April 2024, Finance Secretary Ralph Recto G. Recto instructed PhilHealth to remit to the Bureau of Treasury its fund balance of P89.9 billion labelled as “excess” funds for the years 2021, 2022, and 2023 from subsidy for the premium contributions of indigents paid for by the government.
It said that on Aug. 27, 2024, 1SAMBAYAN Coalition asked Secretary Recto to recall the directive issued to PhilHealth on the transfer of funds.
However, it lamented that up to the filing of the petition with the SC Recto had neither recalled the circular nor justified why the transfer of the unused funds is not contrary to law.
The petition cited that under Article VI, Section 25 (5) of the Constitution, “No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.”
It pointed out that the Secretary of the Department of Finance is not among the enumerated officials. “In the case at bar, Respondent Department Secretary Recto does not have the authority to effect a transfer of unused or excess funds from GOCCs (government owned and controlled corporations) such as PhilHealth back to the national treasury. Thus, the law, the circular, and the resulting and anticipated transfer violate the Constitution,” it also told the SC.
At the same time, the petition pointed out that “PhilHealth funds are considered as special funds because they are collected for a specific purpose and the unused or idle thereof cannot be classified as government savings.”
It cited a previous SC ruling which states: “The revenue collected for a special purpose shall be treated as a special fund to be used exclusively for the stated purpose. This serves as a deterrent for abuse in the disposition of special funds.”
Aside from the filing of the new petition, Bayan Muna – one of the first two groups of petitioners – filed a motion on Wednesday, Oct. 16, for the issuance of a TRO against the transfer of PhilHealth excess funds.
Former Bayan Muna congressman Ferdinand Gaite said that "siphoning funds from PhilHealth could negatively impact on the benefits of PhilHealth beneficiaries, while withdrawal of funds from PDIC (Philippie Deposit Insurance Corporation) could also affect depositors who rely on PDIC to insure their deposits in banks. This is the reason why Bayan Muna is filing this motion for the issuance of a TRO.”
Earlier, government lawyers had asked the SC to dismiss the petitions on the alleged unconstitutionality of the provision on "unprogrammed appropriations (UA)" in the 2024 national budget diverting to the national treasury the P89.9 billion in excess PhilHealth funds.
In its comment, the Office of the Solicitor General (OSG) told the SC that the transfer of PhilHealth’s unutilized funds “when viewed from a broader perspective, will not necessarily hamper, much less disable, the implementation of PhilHealth’s mandate.”
“Assuming that there are challenges, roadblocks, and shortcomings in achieving the purposes of the UHCA [Universal Health Care Act], the same are matters only of its implementation, and are not tantamount to a violation of the right to health, as erroneously espoused by petitioners,” Solicitor General Menardo I. Guevarra said.
“All told, there is no violation of the people’s right to health in this case. The transfer of funds has not been not clearly shown to have impaired, let alone violated, the mandates of the UHCA,” Guevarra stressed.
He pointed out that PhilHealth’s income is more than enough to cover the payment of benefit claims and operating expenses, and that the idle PhilHealth funds were “in excess of the funds needed for its maintenance and operations, including the payment for any outstanding claims for FY 2023.”
He noted that aside from its annual net income averaging more than P100 billion in the past three years, PhilHealth has a reserve fund of P488,107,320,929.88 as of March 31, 2024, “highlighting its strong fiscal position.”
The other petition was filed by Sen. Aquilino “Koko” Pimentel III; Ernesto Ofracio, Junice Lirza D. Melgar, Cielo Magno, Ma. Dominga Cecilia B. Padilla, Dante B. Gatmaytan, and Ibarra Gutierrez; Sentro ng Mga Nagkakaisa at Progresibong Manggagawa, Inc.; Public Services Labor Independent Confederation Foundation, Inc.; and the Philippine Medical Association. They said they represent both the direct and indirect PhilHealth contributors.
Named respondents in the petitions aside from Recto were the House of Representatives represented by Speaker Ferdinand Martin Romualdez, the Senate represented by Senate President Francis Chiz Escudero; Executive Secretary Lucas P. Bersamin; and PhilHealth represented by its President Emmanuel Ledesma Jr.