Last year, Ralph Recto, then serving as finance secretary, was part of the cabal that manipulated the 2024 national budget to funnel an estimated P450 billion into pork barrel projects.

Now elevated to the position of Executive Secretary, his role in that maneuver has come under renewed scrutiny.

The amount in question reflected Congress’ hefty additions to the unprogrammed appropriations (UA) — from P281.9 billion in the 2024 National Expenditure Program to a staggering P731.5 billion in the final General Appropriations Act (GAA).

The UA was intended as a standby fund for priority programs and projects that should be released only upon clicking certain triggers, such as excess revenue collections, new tax or non-tax revenues, or approved foreign loans.

These funds were not automatically allocated and were distinct from the programmed appropriations of P5.037 trillion in the P5.768-trillion national budget then.

The UA became a portal for the pork barrel by accommodating essential projects that were bumped off several agencies’ budgets to make space for legislators’ pet projects in preparation for the 2025 elections.

The practice worsened in the 2025 national budget, which gained notoriety as the most corrupt budget in Philippine history.

Appended to the 2024 GAA by the bicameral conference committee (bicam), which enabled the funding of the UA, was Special Provision 1(d) which authorized the use of fund balances from government-owned and controlled corporations (GOCCs) as an additional source of funds. 

The provision mandated the Department of Finance (DoF) to issue guidelines for identifying and remitting excess, idle, or unutilized funds — defined as unrestricted cash, investments, or unused government subsidies beyond operational needs, benefit obligations, or reasonable reserves.

The DoF complied by issuing Circular 003-2024 in February 2024, effectively amending GOCC charters without due process, but Recto, as finance secretary, said it was a lawful, temporary measure to optimize public resources without new taxes or borrowings.

This resulted in required remittances totaling over P200 billion from major GOCCs, including P89.9 billion from the Philippine Health Insurance Corp. (PhilHealth), which Recto argued were unspent government subsidies for indirect contributors from 2021 to 2023, and P117 billion from the reserves of the Philippine Deposit Insurance Corp. (PDIC).

The funds were transferred to the National Treasury, creating a new revenue stream to “trigger” the release of the UA.

Recto needed to raise P203.1 billion for 11 priority programs, including financing for counterpart funds committed to foreign-assisted projects which, if not funded, would incur huge penalties.

Among the critical items in the UA were P40 billion for the Salary Standardization Law VI adjustments, P27.7 billion for the miscellaneous personnel benefits fund, and support for foreign-assisted projects like the Philippine Multi-Sectoral Nutrition Project, Mindanao Inclusive Agriculture Development Project, and the Philippine Rural Development Project.

Additional allocations covered the Comprehensive Automotive Resurgence Strategy Program of the Department of Trade and Industry, the Community-based Monitoring System for the Philippine Statistics Authority, and Supporting Innovation in the Philippine Technical and Vocational Education and Training System.

The surge in the UA in the 2024 GAA was for the covert pork barrel, in which Recto played a pivotal role, providing cover for the theft of public funds by arguing that he was merely complying with the budget law when he issued his directive.

This circumvented constitutional safeguards established by the Supreme Court in its 2013 ruling that outlawed the Priority Development Assistance Fund.

The 2024 budget manipulation was a prelude to the further mangling of the yearly appropriations, courtesy of Recto.

The SC issued a restraining order halting the raid on the PhilHealth fund. The DoF directive that enabled it is the smoking gun pointing to Recto.

The Recto directive violated the Universal Health Care Act, as it diverted resources from healthcare mandates to plug gaps in underspent or politically motivated projects.

Recto may now be exactly where he belongs, serving as the wingman to the real mafia boss in the Palace.