Refund PDIC’s P107B

The recent ruling striking down a provision in the 2024 national budget directing government-owned and controlled corporations (GOCCs) to surrender their excess funds also covered the P107 billion remitted by the Philippine Deposit Insurance Corp. (PDIC).

Retired senior Associate Justice Antonio Carpio said the decision not only covered the P89.9 billion the Philippine Health Insurance Corp. (PhilHealth) transferred to the National Treasury but also all the reserves of GOCCs that were swept up by the government.

In early December, the Supreme Court voided the transfer of P60 billion in PhilHealth funds to the national treasury citing a “grave abuse of discretion” and multiple violations of the Constitution.

Carpio said the High Tribunal’s decision cited only PhilHealth, as the petition was filed against that agency.

The landmark ruling resulted from several petitions, including that of 1Sambayan, contesting the constitutionality of Department of Finance Memorandum Circular 003-2024 signed by former Finance Secretary Ralph Recto in April last year.

The circular mandated the transfer of the excess funds of GOCCs to the Bureau of the Treasury, thereby causing the withdrawal of a total of P167.23 billion from PhilHealth and PDIC, which was allocated to Unprogrammed Appropriations (UA) in the national budget.

The UA included projects removed from the budget to fund fraudulent flood control projects and other infrastructure programs susceptible to corruption.

A petition compelling the return of the PDIC reserves that were transferred to the UA looms large amid the alleged continued defiance of the DoF to return the funds, despite the Supreme Court’s landmark ruling declaring the transfer unconstitutional.

Carpio warned that his group, 1Sambayan, will seek the SC’s intervention should the acting Finance Secretary, Frederick Go, remain adamant in insisting that the court’s decision ordering the return of the P60 billion in PhilHealth funds from the treasury does not apply to the PDIC funds.

“If the DoF secretary will not authorize the return, we’ll have to go to the Supreme Court and get a specific ruling,” Carpio said in a television interview.

“I don’t know why they don’t want to return it when it’s very clear it should be returned,” Carpio added.

According to Carpio, Go remains adamant about not returning the funds “pilfered” from the PDIC, despite the mounting clamor from the petitioners, because he insists the SC ruling is exclusive to PhilHealth.

“Actually, the court has already ruled in the PhilHealth case that the Secretary of Finance has no authority to transfer funds from GOCCs to the National Treasury to fund the unprogrammed appropriations,” Carpio said.

Go defiant vs SC ruling

“But what Secretary Frederick Go said is that the decision onPhilHealth did not order the return of the PDIC funds,” he said.

The former SC justice said that Go’s argument is misplaced because it was a given that the PDIC depositors were not a party to the petition.

However, he contended that the transfer of any GOCC funds to the BTr for the UA is illegal. Hence, it automatically applies to the PDIC funds.

“That’s not the money of the government, that’s the money of the depositors. The government is just holding it in trust for the depositors,” Carpio pointed out.

The amounts stripped from the PDIC and PhilHealth were remitted to the BTr in tranches last year in compliance with the 2024 General Appropriations Act (GAA).

Special Provision 1(d) of the UA under the 2024 budget law triggered the issuance of the DoF circular requiring GOCCs to remit their excess funds to the BTr.

It remains unclear, however, who introduced the provision in the 2024 GAA, though Carpio said it will form part of the looming petition if the DoF stands firm in withholding the PDIC funds.

The constitutionality of the 2025 GAA, derided by critics as the “most corrupt” budget ever enacted, remains contested before the SC for including a bloated UA amounting to P531.7 billion. The high court, however, has yet to hand down a decision on the matter.

UA is resistant to removal

Despite mounting criticism from opposition lawmakers and budget watchdogs, who branded the UA as a conduit for corruption, President Ferdinand Marcos Jr. has ignored calls to scrap the P243 billion in UA allocations from the 2026 national budget.

Although he vetoed P94.5 billion, critics argued that this still left roughly P151 billion in “unconstitutional” funds intact.

Unlike the programmed funds, the UA serves as a standby fund outside the annual budget, and projects listed there would be funded only when there are excess revenue collections, savings, or additional borrowing from foreign governments.

The executive branch is responsible for releasing the funds, prompting concerns that placing such an enormous amount outside the budget gives Malacañang a blank check while robbing Congress of its oversight powers.

The constitutionality of the UA in the 2025 and 2026 budgets is being challenged in the SC.