Executive Secretary and former Finance Secretary Ralph Recto and former Philippine Health Insurance Corp. (PhilHealth) president Emmanuel R. Ledesma Jr. were slapped with complaints for plunder, technical malversation, and grave misconduct over the transfer of P60 billion in PhilHealth reserve funds to the National Treasury — an action the Supreme Court has ruled unconstitutional.

The complaints were filed before the Office of the Ombudsman by the Save the Philippines Coalition, which accused the two officials of orchestrating and approving the diversion of PhilHealth’s reserve funds in violation of the law and the Constitution

The group anchored its complaint on the Supreme Court’s 5 December decision ordering the return of the P60 billion to PhilHealth after it declared the transfer void.

“P60 billion from the PhilHealth reserve funds was diverted, albeit illegally, to the National Treasury, violating Section 11 of Republic Act 11223, which was recently declared unconstitutional by the Supreme Court in a unanimous vote,” the coalition said in its filing.

The complainants stressed that PhilHealth’s reserve funds are strictly earmarked and may only be invested in specific financial instruments such as interest-bearing bonds and preferred stocks, not transferred to the National Treasury or any government agency.

“Reserve funds shall be invested in certain instruments. It does not authorize the transfer of any of its excess or reserve funds to the National Treasury or any agency, except for income from interest-bearing instruments,” the complaint stated.

One of the complainants, Elmer Jugalbot, said the Supreme Court ruling squarely addressed the constitutionality of the transfer, even if a criminal liability was not resolved by the High Court.

Ombudsman’s call

“There is no criminal case or liability ruled upon by the Supreme Court,” Jugalbot said. “But in fact, it was a unanimous vote that the act was unconstitutional.”

He said it was now up to the Office of the Ombudsman to determine whether a criminal or administrative liability should attach to Recto and Ledesma.

Asked who bore the primary responsibility, the coalition pointed to Recto, who had ordered the remittance as finance secretary, while emphasizing that the Ombudsman would determine culpability.

PhilHealth had been ordered to remit to the treasury P89.9 billion of its unused funds. Of that amount, P60 billion was transferred before the Supreme Court issued a temporary restraining order stopping the remittance of the remaining P29.9 billion.

In its decision, the High Court declared void Special Provision 1(d), Chapter XLIII of the 2024 General Appropriations Act, as well as Finance Circular 003-2024, for grave abuse of discretion amounting to lack or excess of jurisdiction. It ordered the P60 billion already transferred to be returned to PhilHealth through the 2026 General Appropriations Act.

Recto said he would fully cooperate with the Ombudsman and welcomed the opportunity to address the allegations.

‘In good faith’

“I respect every citizen’s right to seek redress before the courts and will fully cooperate with the Office of the Ombudsman during the conduct of the preliminary investigation,” Recto said.

“With the able representation of the Solicitor General, I welcome the opportunity to clarify the issue, prove my innocence, and debunk the allegations put forth,” he added.

Recto reiterated that he acted in good faith and pursuant to a direct mandate from Congress when he ordered the remittance.

“But let me reiterate my innocence, as opined by Supreme Court justices, that no criminal liability may attach to me, as former Secretary of Finance, for acting in good faith and in accordance with a direct mandate from Congress,” he said.

Recto said this was the first complaint of its kind he had faced in more than 30 years in public service and he would not allow the issue to distract him from his duties as Executive Secretary.

At press time, Ledesma had not issued a statement.

Malacañang earlier said the executive branch would comply with the Supreme Court ruling.