OSG: P89.9-B PhilHealth fund transfer legal

The Office of the Solicitor General (OSG) has asked the Supreme Court to dismiss a petition seeking to prevent the Marcos government from transferring the unused P89.9 billion subsidy of the Philippine Health Insurance Corporation (PhilHealth) back to the National Treasury.

The petition has challenged the constitutionality of Department of Finance (DoF) Circular 003-2024 and Section 1(d) of XLIII of the 2024 General Appropriations Act (GAA).

The DoF circular directs the transfer of unused subsidies from government-owned and controlled corporations (GOCCs), specifically PhilHealth, to the national treasury to support the government’s unprogrammed appropriations. The petitioners argue that the provision was “inserted” into the GAA without proper legal basis.

Solicitor General Menardo Guevarra asserted that Section 1(d) of the 2024 GAA is neither a “rider” nor a violation of Section 25(2) and Section 26(1) of Article VI of the Constitution. He explained that the provision is a valid act of appropriation and does not breach the Universal Health Care Act (UHCA), Sin Tax Reform Laws, or the people’s right to health.

Guevarra emphasized that the DoF circular was issued in accordance with Section 1(d) of the 2024 GAA and does not conflict with the constitutional requirement that taxes levied for a special purpose be used only for that purpose. He added that the circular does not violate the cash budgeting system provision of the 2023 GAA.

“The raising of funds for government expenses is a legislative prerogative, and unprogrammed appropriations funded through excess revenue or funds is not a novel concept,” the OSG stated, citing the Supreme Court’s ruling in Belgica v. Executive Secretary to support the validity of unprogrammed appropriations.

Guevarra also addressed the petitioners’ claim that transferring PhilHealth’s excess funds violates the people’s right to health, as many Filipinos forego medical treatment due to a lack of resources. He argued that this claim relies on unverified data that should be deliberated in a trial court, not the Supreme Court.

The Solicitor General further argued that the transfer of PhilHealth’s unutilized funds would not impede the corporation’s operations or violate the UHCA’s mandates. He noted that PhilHealth’s income is sufficient to cover benefit claims and operating expenses, and that the corporation has a reserve fund of P488.1 billion as of March 2024.

Guevarra concluded that while there may be challenges in implementing the UHCA, these are issues of execution, not a violation of the right to health.