SC blocks transfer of P89.9-B excess PhilHealth funds to national treasury

The Supreme Court (SC) on Monday issued a temporary restraining order (TRO) halting the transfer of Philippine Health Insurance Corporation (PhilHealth) excess funds, amounting to P89.9 billion, to the national treasury.

In a full court session, the SC granted the TRO, according to SC Spokesperson Atty. Camille Sue Mae L. Ting. Oral arguments for the case are scheduled for 14 January, 2025.

Three petitions have been filed questioning the constitutionality of the fund transfer: one by Bayan Muna, another by Senator Aquilino “Koko” Pimentel III and his group, and a third by the 1SAMBAYAN Coalition alongside members of the University of the Philippines Law Class of 1975, Senior for Seniors Association, Inc., Kidney Foundation of the Philippines, and other private individuals. All petitions requested a TRO to prevent the fund transfer.

The respondents named in the petitions include Finance Secretary Ralph G. Recto, Speaker of the House Ferdinand Martin Romualdez, Senate President Francis Chiz Escudero, Executive Secretary Lucas P. Bersamin, and PhilHealth President Emmanuel Ledesma Jr.

Bayan Muna reiterated its plea for the TRO on 16 October, emphasizing potential harm to PhilHealth beneficiaries and depositors insured by the Philippine Deposit Insurance Corporation (PDIC) should the funds be diverted. Former Bayan Muna congressman Ferdinand Gaite explained, “Siphoning funds from PhilHealth could negatively impact the benefits of PhilHealth beneficiaries, while withdrawal from PDIC could affect depositors.”

The petitions argued that Secretary Recto had partially authorized the transfer, with P30 billion earmarked for turnover to the treasury on 16 October. Senator Pimentel’s group described the transfer as a "grave disservice" to Filipinos relying on PhilHealth for healthcare support, warning that it would undermine financial protections meant for health services.

Petitioners contended that rising inflation and economic hardship require that PhilHealth’s excess funds be allocated toward the Universal Health Care Act and expanded healthcare benefits. They argued that the 2024 General Appropriations Act (GAA) provision allowing the fund transfer violates the Constitution's spending powers.

The 1SAMBAYAN Coalition and its co-petitioners called out provisions in Republic Act No. 11975 and DOF Circular 003-2024 as unconstitutional. They stated that in April 2024, Recto directed PhilHealth to remit P89.9 billion in “excess” funds from 2021 to 2023 subsidies. Despite 1SAMBAYAN’s request for Recto to rescind the directive, he had not done so by the time of the SC filing.

The petition highlighted Article VI, Section 25 (5) of the Constitution, which restricts fund transfer authority to specific officials, excluding the DOF Secretary. “Secretary Recto does not have the authority to transfer unused or excess funds from GOCCs, such as PhilHealth, back to the national treasury,” it argued.

Petitioners also contended that PhilHealth funds, collected for healthcare, are classified as special funds and cannot be repurposed as government savings. They cited a prior SC ruling affirming that revenues collected for a specific purpose should remain allocated solely for that purpose to prevent misuse of special funds.