The Supreme Court (SC) on Tuesday, Oct. 29, stopped temporarily the transfer of the P89.9 billion excess funds of the Philippine Health Insurance Corporation (PhilHealth) to the national treasury.
The directive was contained in a temporary restraining order (TRO) issued by the SC during its full court session.
SC Spokesperson lawyer Camille Sue Mae L. Ting announced the issuance of the TRO during a press conference.
The oral arguments on the petitions will proceed on Jan. 14, 2025, Ting said.
There were three petitions filed against the alleged unconstitutionality of the transfer of the P89.9 billion excess funds of PhilHealth.
The petitions were filed by Bayan Muna, the groups led by Sen. Aquilino “Koko” Pimentel III, and the 1SAMBAYAN Coalition together with members of the University of the Philippines Law Class 1975, Senior for Seniors Association, Inc., Kidney Foundation of the Philippines, and other private individuals.
All the three petitions, which have been consolidated, pleaded for the issuance of a TRO.
Named respondents in the petitions were Department of Finance (DOF) Secretary Ralph G. Recto, 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.
Last Oct. 16, Bayan Muna reiterated before the SC its prayer for a restraining order.
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.”
All the three petitions told the SC of the urgency to issue a TRO because of published reports that Finance Secretary Ralph G. Recto had ordered the partial transfer of the funds with the P30 billion set for turnover to the National Treasury last Oct. 16.
The group of Pimental said “the pilfering of the reserve funds is a grave disservice to the Filipino people who depend on PhilHealth for financial risk protection from illness and who are still heavily burdened by out-of-pocket health expenditure.”
“With consistently rising inflation and worsening social conditions, it is imperative that these funds be used exclusively for the implementation of the Universal Health Care Act, the expansion of benefit packages, and the reduction of premium contributions,” they said.
The petitioners also told the SC that the 2024 General Appropriations Act (GAA) on UA is unconstitutional for being a rider that exceeds Congress’ power to appropriate funds under the Constitution.
They said: "Despite Congress being vested with the powers of appropriation, the Constitution demands that the expenditure of these funds have distinct ‘items,’ qualifications, limitations, or conditions to which they are subject. The provision fails to meet these criteria, making it unconstitutional.”
In its petition, 1SAMBAYAN Coalition and its co-petitioners assailed as unconstitutional 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 coalition told he SC that in April 2024, Finance Secretary 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.
It pointed out 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 also said that the DOF secretary 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.”
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.”
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.