Leviste: P60-B in PhilHealth funds diverted to bankroll flood projects

The P60 billion in excess PhilHealth funds, recently ordered returned by the Supreme Court to the state insurer, were funneled to the contentious unprogrammed appropriations (UA) that helped fund flood control projects, now under scrutiny for alleged corruption, Batangas Rep. Leandro Leviste disclosed on Wednesday.

In an interview on the DAILY TRIBUNE’s Straight Talk, Leviste said the transfer of the funds from PhilHealth to the National Treasury occurred around October last year, coinciding with the release of the UA for DPWH projects, and “just in time for the fundraising for the 2025 midterm elections.”

“There is debate on whether those then were used for DPWH projects. But unprogrammed appropriations were used for DPWH projects,” he stated in the program. 

“So if you think that the funds are fungible, then to the extent that the funds went into unprogrammed appropriations, which were then used to fund DPWH projects, on that basis alone, you can say that the PhilHealth funds were used for DPWH projects.”

According to the neophyte lawmaker, a whopping P220 billion in UA went to DPWH, with over half going to flood control projects. 

The transfer of the P60 billion in PhilHealth funds to the national treasury—criticized by some as illegal—stemmed from the issuance of Memorandum Circular No. 003-2024, signed by then Finance Secretary Ralph Recto in April 2024.

The memorandum directed government-owned and -controlled corporations (GOCCs), including PhilHealth, to remit idle funds to the national treasury to help finance projects under UA in the 2024 GAA.

The UA is intended to serve as a standby fund outside the annual national budget or General Appropriations Act (GAA). The Executive only releases it when there are excess revenues or foreign grants or loans materialize to fund priority projects.

However, opposition lawmakers and budget watchdogs have raised concerns that using the so-called standby funds for pre-planned projects, such as infrastructure and military modernization, among others, effectively undermines the intent of the funds, which is for emergencies.

Moreover, they argued that placing such a big chunk of money outside the GAA gives Malacanang a blank check, while robbing Congress of its oversight powers, fueling speculations of fund misuse and corruption.

In Batangas First District, Leviste’s home turf, 30 percent of DPWH projects were sourced from UA. This includes, among others, an asphalt overlay and two multi-purpose buildings, one of which is a bleacher for a swimming pool with a price tag of P49 million. 

“And the reason I bring this up is that the official justification for using unprogrammed appropriations for DPWH projects is because these are the priority projects,” he averred.

In the wake of the SC ruling, Leviste suggested that the government cancel payments to contractors of ongoing DPWH projects that were funded through the “illegal” use of UA, instead of sourcing out the money from the pockets of taxpayers. 

He said that 60 percent of the P200 billion in UA that went to DPWH can be tapped to replenish the P60 billion for PhilHealth funds “without incurring new costs to the taxpayers.”

The UA has swelled to unprecedented levels since 2023, the first full year of President Marcos Jr. in office, reaching almost P2 trillion. Though P168.2 billion was reportedly vetoed in the 2025 GAA.

In 2023 and 2024, a staggering P141 billion was reportedly charged to the UA to finance flood control projects, which have now been at the center of a sweeping corruption probe involving members of Congress, DPWH officials, and private contractors.

Despite efforts to scrap it, the House retained P243 in standby funds in its version of the 2026 GAB, with the lion’s share going to bankroll infrastructure projects to be co-financed by foreign governments.

Under the 2026 budget approved by the House, the majority of the UA is earmarked for Foreign-Assisted Projects (P97.3 billion), Strengthening Assistance for Government Social Programs or SAGIP (P80.9 billion), the Revised AFP Modernization Program (P50 billion), and health emergency allowances (P6.7 billion).

Due to mounting criticism, the House committee on appropriations compromised and removed P35 billion worth of infrastructure projects from the SAGIP.

Minority solons, however, argued that there’s no use in defunding the infrastructure from SAGIP if the allocation will be merely realigned to FAP, whose projects are mainly related to infrastructure.