Wreck-it Ralph

Wreck-it Ralph | Daily Tribune

Despite his defense that he was complying with the requirements of the law when he swept up idle funds from state firms, Finance Secretary Ralph Recto cannot escape the moral responsibility, as explained by a former Supreme Court (SC) magistrate.

In a clear maneuver to extract the pork barrel from the budget, the bicameral conference committee inserted a provision in the 2024 budget authorizing the Department of Finance (DoF) to harvest the unused funds from government-owned and -controlled corporations.

The funds would be used to pay for the unprogrammed allocations, which were mostly regular items in the budget that were bumped off in favor of legislators’ pet projects.

Retired Associate Justice Antonio Carpio, however, pointed out that the Constitution has a provision that states that no law shall be passed authorizing the transfer of appropriations.

The Charter, he said, clearly states that Congress cannot pass a law authorizing reallocations.

In the General Appropriations Act of 2024, however, Congress authorized the secretary of finance to transfer appropriations from the Philippine Health Insurance Corp. (PhilHealth) to augment the financing for the unprogrammed appropriations.

Carpio said the practice is not allowed by the Constitution, with a few exceptions.

The President may transfer savings from one item to another, but only within the budget of the executive branch. Similarly, the Chief Justice is permitted to transfer savings between items within the judiciary’s budget.

In the legislature, the Senate President has the authority to transfer savings within the Senate’s budget, while the Speaker of the House may do the same within the House of Representatives’ budget.

In the Constitutional Commissions, their heads are also allowed to transfer savings.

Thus, the implication is that the Constitution is specific about who can reallocate funds in the budget.

Last year, the GAA that authorized the secretary of finance to transfer appropriations violated the Constitution, Carpio underlined.

He said it was also specified in the provisions of the Basic Law that the President can only transfer savings.

Carpio led the filing of the complaint against the reallocation of funds, for which the SC issued a temporary restraining order.

Funds raised through taxation for a specific purpose cannot be used for any other purpose.

The sin tax on alcohol and tobacco has a specific percentage allotted to PhilHealth to fund the objectives of the Universal Health Care Act.

It is called a special fund, so its transfer is prohibited under the Constitution.

It has to be used for the specified purpose, except, Carpio indicated, in two instances, which are when the purpose has been achieved and if a law is passed to repurpose the tax.

Only 14 percent of the health services PhilHealth is required to render has been covered, according to Carpio. He added that health care is a continuing service, so it should not stop.

The former senior member of the High Tribunal clarified that the sin tax fund can be used for other purposes if Congress has abandoned the purpose through another law.

“The delegated authority to the secretary of finance to transfer the appropriation is, thus, patently unconstitutional,” Carpio pointed out.

Whatever was redistributed would become irreparable damage despite the Supreme Court’s temporary restraining order on the transfer of what Recto termed as excess funds — which was P60 billion from PhilHealth and P107 billion from the Philippine Deposit Insurance Corp. (PDIC).

The breach may make the secretary of finance personally liable for it, but it is doubtful that Recto would have that huge amount to indemnify PhilHealth.

Under the Constitution, officials who illegally dispense funds to the government are personally liable.

“Even if you go after Recto, he cannot pay the ₱90 billion transferred to the treasury,” Carpio observed.

Nonetheless, the Supreme Court may take a lenient approach toward Recto.

If the SC rules against the transfer of the “excess funds” of PhilHealth and PDIC, it may allow that Recto acted in good faith since he relied on the law.

“Somebody should have spoken his mind to say that the whole process was wrong since it would affect the public welfare,” Carpio said, on the responsibility of those in government.

Recto and those in government, mainly those in Congress, must stop the perpetual raid of the yearly budget for partisan gain.