Key provisions in the 2024 General Appropriations Act (GAA) were struck down by the Supreme Court, which ruled that they undermined the reserve funds of the Philippine Health Insurance Corporation (PhilHealth) and violated the Universal Healthcare Act (UHC).

SC spokesperson Camille Ting said the Court unanimously ordered the return of P60 billion in PhilHealth funds that had been transferred to the National Treasury and permanently prohibited the transfer of the remaining P29.9 billion in reserve funds.

However, the Court voted by majority in declaring Special Provision 1B and Department of Finance Circular No. 003-2024 void.

It found that these measures effectively repealed Section 11 of the UHC and conflicted with the Sin Tax Law.

Section 11 requires PhilHealth to maintain reserve funds equivalent to two years of projected program expenses. The law further mandates that portions of PhilHealth’s net income be set aside as reserve funds, invested for earnings, and used to increase benefits or reduce member contributions if the reserve exceeds its ceiling.

The Court said reallocating these supposed excess funds through Special Provision 1B and the DOF circular made compliance with Section 11 “impossible.”

“The GAA may provide appropriations consistent with existing laws, but it cannot amend or repeal substantive policy,” the Court said, stressing that changes affecting UHC—particularly PhilHealth’s reserve funds—must be made through separate legislation.

The ruling likewise emphasized that Congress cannot reduce, suspend, or withhold earmarked funds from excise taxes on sweetened beverages, alcohol, and tobacco products, as the Sin Tax Law allocates these revenues exclusively to UHC implementation.

Ting added that the Finance Secretary is not authorized to augment any item in the GAA, as this power belongs solely to the President. The Court, meanwhile, upheld the President’s certification of urgency for House Bill No. 8980—now the 2024 GAA—saying Congress properly approved the expedited process.

The petitioners’ request to hold the DOF Secretary liable for malversation or plunder was denied, with the Court noting that such issues fell outside the scope of the case.

The remitted P60 billion was ordered returned to PhilHealth through the 2026 GAA.