Congress’ decision to remove the subsidy of the Philippine Health Insurance Corp. (PhilHealth) in the 2025 national budget will be contested before the Supreme Court (SC), a former government official said, citing its potential legal implications.

Ex-Finance undersecretary Cielo Magno lamented that the state health insurer denying subsidies in the approved bicameral committee report for the P6.352 trillion budget for next year is “unconstitutional,” leaving the mandate to cover the premiums of indirect contributors such as the poor, senior citizens, and unemployed solely to PhilHealth members and direct contributors.

“We are going to the Supreme Court again to file a case to question what [Congress] is doing. It's unconstitutional, it’s against our rights, it’s against the right to health, and it’s against the rules of Congress. In effect, they are again amending the specific law that very clearly allocates funds for PhilHealth,” Magno said in a TikTok video.

Magno was part of the group that petitioned the SC to block the further transfer of P89.9 billion in PhilHealth funds to the national treasury, a move that resulted in the issuance of a temporary restraining order by the high court.

The bicameral panel, composed of members of the House of Representatives and the Senate, allocated zero budget for PhilHealth subsidies, citing the need to first exhaust the agency’s massive reserve funds, reportedly amounting to P600 billion.

Initially, PhilHealth was set to receive over P74 billion in government subsidies, which included P50 billion for premiums for the unemployed and P20 billion for additional benefits. 

However, this was removed by the bicameral body due to PhilHealth’s alleged history of slow and inefficient budget utilization, despite its massive excess funds.

The move has drawn strong criticism, with some arguing it denies the poor access to their constitutional right to health. 

Critics also claim it violates the Sin Tax Law and the Universal Healthcare Act, which mandate that significant portions of certain taxes be allocated to PhilHealth to ensure equitable access to quality health services for all Filipinos.

Under the Sin Tax Law, 80 percent of half of the total collection from tobacco and sugar-sweetened beverages is allocated to PhilHealth.

‘Unfair and illegal’

Magno called Congress’ decision “very wrong” and said it warrants legal action. Senator Risa Hontiveros, a bicameral panel member who has yet to sign the report, described the zero subsidy as “unfair, illegal, and potentially unconstitutional.”

Senate President Francis “Chiz” Escudero, however, asserted that this is the price PhilHealth must pay for its “failure” and expressed hope that the decision would serve as a “wake-up call” for the state insurer to effectively carry out its mandate.

"Doing their job is not a slap on their faces. We will not reward their failure by giving them a budget that won't be used," he stressed.

Nevertheless, he said PhilHealth could still function sans government subsidy.

Earlier, lawmakers castigated PhilHealth for its inefficiency in expanding health coverage despite its enormous reserve funds.

Since 2014, PhilHealth has been among the top recipients of government subsidies allocated to government-owned and -controlled corporations . In 2022, PhilHealth received a record-breaking P80 billion, higher than P71.3 billion in 2021 and P79 billion in 2020. This year, PhilHealth’s subsidy dropped to P40.3 billion due to its high excess funds.