PhilHealth funds diverted to DPWH

The P60-billion PhilHealth reserve fund which the Supreme Court recently ordered returned to the state insurer was funneled into the controversial unprogrammed appropriations (UA) in the 2025 national budget that helped bankroll flood control projects that are now under scrutiny for alleged corruption, Batangas Rep. Leandro Leviste said Wednesday.

In an interview on DAILY TRIBUNE’s Straight Talk, Leviste said the transfer of the funds from PhilHealth to the National Treasury happened around October 2024, right as the UA funds for DPWH projects were being released — which Leviste claimed was “just in time for the fundraising for the 2025 midterm elections.”

“There is a debate on whether those funds were used for DPWH projects. But unprogrammed appropriations were used for DPWH projects,” he said on 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,” he said.

According to the neophyte lawmaker, a staggering P220 billion in unprogrammed appropriations went to the DPWH, with more than half earmarked for flood control projects.

The P60-billion PhilHealth fund was transferred to the National Treasury under Memorandum Circular No. 003-2024 signed by then Finance Secretary Ralph Recto in April 2024.

The circular directed government-owned and controlled corporations (GOCCs), including PhilHealth, to remit their excess or idle funds to help finance UA items in the 2025 GAA — an action that retired Supreme Court Senior Associate Justice Antonio Carpio and other critics branded as illegal.

The memorandum directed GOCCs, including PhilHealth, to remit their idle funds to the national treasury to help finance projects under the UA in the 2025 GAA.

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

However, opposition lawmakers and budget watchdogs had raised alarms, arguing that tapping the so-called standby funds for pre-planned projects — like infrastructure, military modernization, and others — essentially defeated their purpose, which is to address genuine emergencies.

Moreover, they warned that funneling such a huge sum outside the GAA effectively gives Malacañang a blank check, strips Congress of its oversight role, and stokes suspicions of misuse and corruption.

In Batangas 1st District, Leviste’s turf, 30 percent of DPWH projects were sourced from the UA. This included, among others, an asphalt road overlay and two multi-purpose buildings — one of them a P49-million bleachers for a swimming pool.

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

In the wake of the Supreme Court ruling, Leviste urged the government to halt payments to the contractors of ongoing DPWH projects funded through what he called the “illegal” use of the UA, rather than making taxpayers foot the bill.

He said that 60 percent of the P200 billion in UA allocated to the DPWH could be used to restore the P60 billion to PhilHealth, “without burdening taxpayers with any additional costs.”

The UA had swelled to unprecedented levels since 2023, the first full year of President Ferdinand Marcos Jr. in office, reaching almost P2 trillion, although 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 are now 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 billion 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 House-approved 2026 budget, most of the UA is allocated to foreign-assisted projects (P97.3 billion), the 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 lawmakers, however, argued that defunding infrastructure under SAGIP is meaningless if the same allocations are simply realigned to foreign-assisted projects, whose pipeline is still largely infrastructure-related.