Robbed twice over

The combination of state firm Philippine Health Insurance Corp.’s (PhilHealth) idle billions, the Unprogrammed Appropriations (UA) in the national budget and the Supreme Court’s ruling on who that money belongs to bared the brazenness of the raid on public funds intended for healthcare.

The reallocation of the funds should have embarrassed a responsible government, but this went on with impunity.

PhilHealth held P464 billion in reserves at the close of 2023, climbing to P488 billion by March 2024. In the same span, a Boston Consulting Group survey found that 64 percent of Filipino families could not absorb a P10,000 hospital bill without having to borrow money.

The 2024 General Appropriations Act (GAA) contained Special Provision 1(d) authorizing the Department of Finance (DoF) to sweep the “fund balances” of government-owned and -controlled corporations (GOCC) into the National Treasury to trigger the release of funds for the UA.

The UA was intended as standby spending, activated only if extra revenue appeared, but it was converted into a vehicle for pork-barrel spending.

PhilHealth, having the largest surplus among GOCCs, was an obvious target.

DoF Circular 003-2024 ordered the remittance of P89.9 billion from PhilHealth, P60 billion of which was disbursed in three tranches. Then Finance Secretary Ralph Recto, now the Executive Secretary, defended the reallocation, saying that 78 percent of the amount financed critical health projects.

In October 2024, the SC issued a temporary restraining order to halt the disbursement of the last P30 billion.

The petitioners who had sought to stop the raid on PhilHealth argued that it violated Section 11 of the Universal Health Care (UHC) Act, which bars treating its reserves as a general government fund.

The Act specified how to handle any surplus: excess reserves must go toward higher benefits and lower contributions for members, not transfers to the National Treasury. There was no provision in the law allowing the GAA to alter its use.

The government’s defense, or excuse, was that the swept “excess funds “ were not actually part of PhilHealth’s statutory reserve, citing evidence of an expanding PhilHealth budget and a 95-percent increase in the all-case rates package in 2024.

No one on the government side disputed that the P488 billion in reserves failed to close the gap for the 64 percent of families who couldn’t cover P10,000 in hospital fees. The argument was that the funneled money came from a separate pool.

On 5 December 2025, the Supreme Court en banc unanimously ordered the P60 billion returned and permanently barred the transfer of the remaining P29.9 billion, finding Special Provision 1(d) and DoF Circular 003-2024 void for grave abuse of discretion.

The High Tribunal highlighted two defects: the provision was an impermissible budget “rider,” and it impliedly repealed Section 11 of the UHC Act and the Sin Tax Law, which an annual appropriations act cannot strike out.

Senior Associate Justice Marvic Leonen argued that the entire UA mechanism was unconstitutional because only Congress can determine increases to the President’s proposed budget. Fellow justices called the increase a deliberate attempt to circumvent the constitutional prohibition on raising presidential appropriations.

They noted that the transfer diverted funds intended for indigents, senior citizens and persons with disability.

Still, the Court ruling went in favor of those who ransacked PhilHealth, as the P60 billion in reparations was written into the 2026 national budget, which the groups seeking justice said was, in effect, the public funds being ransacked twice — when it was pilfered and when it was reimbursed.

An ordinary Filipino can’t afford hospitalization costs of P10,000, while the system condones P60 billion to help members of Congress line their pockets.

The SC ruled that PhilHealth, and consequently the public, was robbed, yet the victim still has to pay for it.