Health reform advocate and former independent director of the Philippine Health Insurance Corporation (PhilHealth), Dr. Tony Leachon, filed a petition before the Supreme Court (SC) on Tuesday challenging the constitutionality of denying the state insurer a subsidy in the 2025 General Appropriations Act (GAA).

Leachon argued that not giving PhilHealth a subsidy in the national budget directly contradicted the mandates outlined in existing laws.

He pointed to Republic Act 10351, or the Sin Tax Reform Act of 2012, which allocates 80 percent of the balance of incremental revenue derived from the law’s implementation to universal health care under the National Health Insurance Program.

Additionally, Leachon referenced Republic Act 11223, the Universal Health Care (UHC) Act, which mandates the inclusion of a premium subsidy for indirect contributors in the GAA to be released to PhilHealth.

“This zero subsidy will set a dangerous precedent that will undermine Filipinos’ right to health and the state’s responsibility to make health care accessible and inclusive, even for the poorest, as guaranteed by no less than the Philippine Constitution,” Leachon pointed out.

Congress’ bicameral conference committee removed PhilHealth’s subsidy in the 2025 GAA, citing its substantial reserve funds, reportedly amounting to approximately P600 billion, which includes surplus and reserve funds.

Senate President Francis Escudero said PhilHealth was not given a subsidy due to its failures which resulted in its accumulation of P600 billion in reserves — which, he claimed, meant it was not performing its job of providing health benefits to Filipinos.

The defunding should “serve as a wake-up call for them to do their job,” according to the senator.

Leachon said SC Associate Justice Amy Lazaro-Javier disproved this claim during the oral arguments on the PhilHealth fund transfer on 4 February.

Lazaro-Javier said the Commission on Audit’s Annual Audit Report showed that “Philhealth is bankrupt.”

Leachon said he viewed the defunding as a “punitive measure” to teach PhilHealth under Emmanuel R. Ledesma Jr. a lesson. Ledesma was recently replaced as the agency’s president and CEO by Dr. Edwin Mercado Jr.

“Congress attempts to punish the members of the Philhealth board but lets the Filipinos suffer the consequences of their decision. They want to teach PhilHealth [a] lesson but at what cost?” Leachon said, calling it a “betrayal of the trust” of Filipinos who rely on PhilHealth for their healthcare.

Uphold interests of Filipinos

With PhilHealth under new leadership, Leachon urged Mercado to “uphold the interests of the public.”

Leachon argued that “there are better ways to address PhilHealth’s inefficiencies rather than by resorting to subsidy cuts.”

“At a time when the country’s healthcare system is grappling with numerous issues, the removal of PhilHealth’s funding creates an impression that the government has lost its commitment to provide equitable access to quality healthcare,” he noted.

“It sends a disturbing message — that the public welfare is no longer a priority,” he added.

The government subsidy withheld from PhilHealth was supposed to cover the premium contributions of indirect contributors or those who cannot pay premiums, persons with disabilities, beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps), and senior citizens as well as their qualified dependents.

In the 2024 GAA, Congress appropriated P61,514,633 for PhilHealth.

It appropriated P40,283,404 for the National Health Insurance Program for the health insurance premiums of indirect contributors; P21,170,000 for the improved benefits package under the UHC Law; and P61,229,000 for the health insurance premiums of the beneficiaries of the PAyapa at MAsaganang PamayaNAn program.