The Philippine Health Insurance Corporation (PhilHealth) is not bankrupt and cannot become bankrupt, Government Corporate Counsel Solomon Hermosura told the Supreme Court during oral arguments.

Hermosura assured the court that PhilHealth remains financially sound, addressing concerns about the agency’s financial reports. He clarified that the reported P1.15 trillion in liabilities is not actual debt but a provision for future obligations based on actuarial estimates.

"We appreciate the concern of Your Honors about the solvency of PhilHealth," Hermosura said. "Actually, what makes PhilHealth appear to have more liabilities than assets...is...its provision for insurance contract liabilities, which stood at P1.150 trillion as of 31 December 2023. Now, you will note that this is a provision for liabilities. It is not a statement of liabilities. It is just a provision."

Hermosura said PhilHealth has no current claims under these provisions, indicating no financial distress and stressed that under the Financial Rehabilitation and Insolvency Act of 2010, liabilities refer to monetary claims against a debtor, and there are no current insurance contract liability claims against PhilHealth.

He also distinguished PhilHealth from private insurance companies, saying, "PhilHealth has not issued and has no outstanding insurance contract. PhilHealth is not an ordinary insurance company...It is a state insurance company."

"It cannot be insolvent because by law...the government of the Philippines guarantees the financial viability of the program...administered by PhilHealth," he added.

Meantime, PhilHealth senior vice president for Finance Renato Limsiaco reported that the agency processes millions of claims within the legal timeframe. As of 31 December 2024, the average turnaround time was 23 days, faster than the 60-day limit. In January, PhilHealth processed 1.4 million to 1.5 million of the 1.6 million claims received.

The Department of Finance has repeatedly assured the public that mobilizing PhilHealth's idle funds will not hinder its services. The department said that PhilHealth's total assets were P598 billion as of September 2024.