OF SUBSTANCE AND SPIRIT

(Concluding Part)

Last week, we concluded our piece with the quote from Finance Secretary Ralph Recto that the full remittance and appropriate use of PhilHealth’s ₱89.9 billion could boost GDP by 0.88 ppts and employment by 600,000. It is not as simple as deciding whether there are excess funds idling in PhilHealth treasury and all that is needed to do is to direct its remittance to the Bureau of the Treasury. From there, the National Government can earmark the freed funds to finance infrastructure and other social services. In the process, to the extent that government finance leads to higher spending on capital goods and hiring people, national output and jobs creation are likely to expand.

The fundamental issue is whether the ₱89.9 billion funds are indeed excess funds. Some quarters might wish to play technical about it but when decent healthcare in the Philippines remains out of reach for many Filipinos, the so-called ₱500 billion in PhilHealth’s reserve funds are barely enough. It is unconscionable for PhilHealth leadership, then and now, to even talk about profitable operation and reserve funds. Reserve funds are supposed to be used to increase the benefits or to reduce member contributions pursuant to the law.

Higher benefits in recent period are an empty boast when some 44 percent of health care spending consists of out-of-pocket payments. While PhilHealth’s benefits have been recently increased to 30 percent, health care industry representatives claim that such an increase came only after 10 years. PhilHealth’s actuarial responsibilities and payables remain large. How can anyone argue that the use of PhilHealth funds for the government’s priority programs “will not affect PhilHealth’s daily operations” when the law is clear that such reserve funds, or any income of PhilHealth, cannot accrue to the National Government?

True, such a diversion of funds “will not reduce even a single centavo from the benefits that members will receive.” But PhilHealth can be compelled to increase the benefits of members. It is pointless to argue that by the end of 2024, PhilHealth stands to earn about ₱61.18 billion because the public health deficit is just too wide. Another ₱70 billion in government subsidies next year should be welcome.

It is therefore to the discredit of PhilHealth that the reserve funds accumulated to staggering amount, thanks to their treasury operations, instead of being used to mitigate the health conditions of Filipinos. Health care industry representatives were correct in saying that “the solution to PhilHealth’s inability to use its funds is not to strip Filipinos of health care funding but to implement immediate and substantial PhilHealth reforms such as increasing the scope and coverage of benefits packages.”

Invoking “due diligence” is almost meaningless in ascertaining that the diverted funds exclude contributions of paying members when these are co-mingled? While the diversion was coordinated and guided by the Government Corporate Counsel, Governance Commission for GOCCs and the Commission on Audit, the alternative use to “invest in the nation’s economic growth and development particularly in government infrastructure and social programs” actually pits these items against public health in promoting economic development. We doubt whether these public agencies ever addressed the existential issue that public health is a matter of life and death, while infrastructure and other social services can wait for another day.

We share the spirit of the letter of former Philippine health secretaries “to be sensitive to public opinion and exercise prudence and caution by not transferring the next tranche of funds and succeeding transfers” because it strikes at the very heart of public health issue. PhilHealth funds are better used to benefit, for instance, indigent patients who have to spend hours queuing at PCSO for some additional help. On the other hand, no one can take issue with the letter of former Philippine finance secretaries in support of the fiscal responsibility to optimize excess funds of public agencies.

But the optimal use of public funds is not the issue here. It is PhilHealth’s failure to use its funds to provide health coverage to millions of Filipinos, it is PhilHealth’s incompetence in broadening public health benefits. There could only be bad fiscal management if PhilHealth continues to expand its treasury operations even as its payables to individuals and hospitals are mounting? If there are just too many unmet health needs, how can anyone assume there are excess funds in the first place?

And even assuming there are legitimate excess funds, or savings, to speak of, is the Finance department’s circularlegal or constitutional? Can the diversion of funds be properly done?

Multisectoral opposition 1Sambayan led by Retired Senior Associate Justice Antonio Carpio and lawyer Howard Calleja argued that only the President is authorized by law to transfer savings from one item to another in the appropriations for the Executive Branch under the appropriations law. To 1Sambayan convenors, the delegation of power to a cabinet secretary to transfer savings from GOCCs to the Bureau of the Treasury is unconstitutional. That power exclusively belongs to the President.

Thus, “the two transfers of idle or unused funds to date from PhilHealth result in technical malversation of public funds and constitute the crime of plunder.”

Equally important, 1Sambayan maintained that PhilHealth’s funds are special funds raised through taxation for a specific purpose which is to promote the universal health of Filipinos.

1Sambayan’s points also echoed in former Senator Panfilo Lacson who stressed that both PhilHealth Law and the Universal Health Care Act are special laws that specify how excess funds from the state insurer are to be used.

Advocates led by Senate Minority Floor Leader Aquilino Pimentel III had already questioned the constitutionality of the rider in the budget law and the Finance circular itself before the Supreme Court.

If the National Government opted to reform the PhilHealth yesterday and compelled its adherence with its mandate of providing universal health care, there would have been no “excess” funds to begin with. There is nothing with which to fund infrastructure and social services, nothing to convert to 0.88 ppts in real output and 600,000 in additional jobs.

Why, this could easily be done if Congress were to halve its unprogrammed appropriations and reduce the funding for non-priority projects.