Government lawyers have asked the Supreme Court (SC) to dismiss the petition 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 reserve funds of the Philippine Health Insurance Corporation (PhilHealth).
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.”
Earlier, the SC had required the government to comment on the petition 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.
Those required to file their comments were Finance 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 July, Finance Secretary Recto said that of the P89.9 billion PhilHealth’s reserve funds, P20 billion had been transmitted to the national treasury while the rest will be released on a staggered basis.
The petitioners told the SC that “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.”
They pointed out that in diverting the funds to the unappropriated programs of the national budget, Congress gave the Executive Branch the discretion to decide how to spend funds which have been earmarked specifically for the implementation of the Universal Health Care Act.
In the OSG’s comment, Guevarra said that contrary to the claim of the petitioners, Section 1(d) of XLIII of the GAA (General Appropriations Act) 2024 “is not a rider” and does not violate Section 25 (2) and Section 26(1) of Article VI of the Constitution.
Section 25 (2) states: “No provision or enactment shall be embraced in the general appropriations bill unless it relates specifically to some particular appropriation therein. Any such provision of enactment shall be limited in its operation to the appropriation to which it relates.”
Section 26 (1), on the other hand, provides: “Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof.”
Guevarra pointed out that the provision in the 2024 GAA does not amend nor violate provisions of Republic Act (RA) 11223 or the Universal Health Care Act (UHCA); and RA 10351 and RA 11346, the Sin Tax Reform Laws.
He said that Section 1(d) of the 2024 GAA is actually “a valid act of appropriation” and does not violate the people’s right to health.
On DOF Circular No. 003-2024, Guevarra said it was validly issued in accordance with Section 1 (d) of the 2024 GAA.
He said the circular is not a violation of Section 29 (3) Article VI of the Constitution which states: “All money collected on any tax levied for a special purpose shall be treated as a special fund and paid out for such purpose only.”
Also, he said the DOF circular does not violate the cash budgeting system provision of the 2024 GAA, according to Guevarra.
“The raising of funds for government expenses is a legislative prerogative and the concept of an unprogrammed appropriation funded through excess revenue/funds is not a novel concept, as petitioners suggest,” he noted, as he cited a decision of the SC which ruled that the concept of unprogrammed appropriations, which necessarily includes the special provisions, is valid.
“Hence, the assailed 2024 GAA provision pertaining to the fund sources under the unprogrammed appropriations is an essential element that complies with the requirement under Section 25(2), Article VI of the Constitution and well within the power of Congress to appropriate,” Guevarra stressed.