Some of the amici curiae or “friends of the court” told the Supreme Court (SC) yesterday of a possible violation of the Constitution in the transfer of the Philippine Health Insurance Corporation’s (PhilHealth) unutilized funds amounting to P89.9 billion to the national treasury.
This was tackled during oral arguments on three consolidated petitions challenging the constitutionality of Special Provision No. 1(d) of the Unprogrammed Appropriations in the 2024 General Appropriations Act and Department of Finance (DOF) Circular No. 003-2024. Public budget analyst and amicus curiae Zy-za Nadine Suzara told the magistrates that the enactment of the national budget under the present administration has introduced a new pork barrel scheme, which was declared unconstitutional by the Court in 2013.
Suzara argued that the new scheme circumvents the Court’s previous ruling in Belgica vs. the Executive Secretary (2013), which declared unconstitutional any form of post-enactment authority in the budget by legislators.
She claimed that Congress deliberately defunded strategic infrastructure and development programs and transferred the funds to unprogrammed appropriations. In the 2024 GAA, Congress either fully or partially defunded multiple programs of various departments and agencies, including the Metro Rail Transit Line 4, the Revised Armed Forces Modernization Fund, Universal Access to Tertiary Education, Cold Storage Expansion, Social Pension for Indigent Senior Citizens, and the Pension and Gratuity Fund, among others.
From a proposed level of P282 billion in the National Expenditure Program (NEP), unprogrammed appropriations ballooned to P732 billion in the 2024 GAA, resulting in an excess of P450 billion.
The Court noted that Congress introduced Special Provision No. 1(d), authorizing the fund balance of government-owned and controlled corporations (GOCCs), including PhilHealth, as a source of financing to provide cash cover for the “bloated unprogrammed appropriations.”
Suzara added that the 2024 GAA shows an “avalanche of funding” allocated to departments where the hard and soft projects of legislators are traditionally lodged. These include the budgets of the Department of Public Works and Highways (DPWH), Department of Social Welfare and Development (DSWD), Department of Agriculture (DA), Department of Health (DOH), and Department of Labor and Employment (DOLE).
She stressed that unprogrammed funds, previously used as standby appropriations, have now become a long list of line items eliminated by Congress in favor of pork barrel funding in programmed appropriations. Suzara argued that Congress has found a way to circumvent the prohibition on post-enactment intervention, undermining the budget process.
“Worse, Congress authorized a questionable measure to finance hundreds of billions worth of programs and projects that were defunded in favor of pork,” she said.
Meanwhile, IBON executive director and fellow amicus curiae Sonny Africa supported the petitioners' position that PhilHealth’s excess reserve funds should be used to increase program benefits and reduce member contributions as mandated under Section 11 of the Universal Health Care Act (UHCA).
Africa also shared Suzara’s concerns about higher budget allocations for infrastructure projects compared to health and education.
“Infrastructure spending is over three and a half times higher than health spending and even surpasses education, which arguably breaches the constitutional provision that health and education should receive the highest budget allocation,” he said.
He further argued that unprogrammed appropriations are part of the budget mentioned in the Constitution, whose appropriation may not be increased by Congress.
“There is much reason to conclude that the budget process is flawed and needs fixing. So much needs to be done to institutionalize a process toward a budget that addresses the most urgent needs of the economy and the people,” he added.
Dr. Beverly Ho, another amicus curiae, asserted that instead of diverting its funds, PhilHealth should "maximize" its legal instruments and financial resources, not only to provide insurance coverage to every Filipino but also to expand benefits to adequately finance healthcare.
She emphasized that PhilHealth should use this financial cushion to rapidly increase benefits and invest in technical resources, whether by retaining in-house talent or securing partnerships with academic and research institutions, similar to health insurance bodies in other countries.
“The opportunity to have a healthcare system that Filipinos can be proud of is here. We just need to ensure that resources are translated into tangible benefits for the people,” she said.
On the other hand, Solicitor General Menardo Guevarra assured the magistrates that there is no “dark or sinister plan” behind the transfer of PhilHealth’s unused funds to the national treasury, contrary to the petitioners' claims.
Guevarra insisted that the transfer was only a “temporary measure” to address concerns about fund availability for important government projects and programs under the mandate of the executive and legislative branches. He maintained that the transfer of PhilHealth’s unutilized funds to the national treasury is “within legal bounds.”
He described Congress’ inclusion of Special Provision No. 1(d) in the 2024 General Appropriations Act and the DOF’s issuance of Circular No. 003-2024 as a “common-sense approach” to securing the necessary funds for the national government’s priority programs.
The constitutionality of Circular No. 003-2024 and Section 1(d) of XLIII of the 2024 GAA are among the provisions being challenged in the three consolidated petitions.
The DOF Circular mandates the transfer of unused subsidies from GOCCs, specifically PhilHealth’s P89.9 billion, to the national treasury to bolster unprogrammed appropriations.
It was issued in line with Section 1(d) of XLIII of the 2024 GAA, which the petitioners argue was an “inserted” provision on unprogrammed appropriations.
Under Special Provision No. 1(d), Unprogrammed Appropriations shall be sourced from “any remainder resulting from the review and reduction of the GOCC’s reserve funds to reasonable levels, taking into account the disbursements from prior years.”
Guevarra explained that PhilHealth’s P89.9 billion fund balance was accumulated from three years’ worth of government subsidies that remained unexpended as of the end of 2023.
He noted that the P5.7 trillion budget for 2024 could only fund programmed appropriations for specific priority projects aimed at fostering economic and social transformation, mitigating inflation, and advancing the government’s 8-Point Socioeconomic Agenda.
However, other important programs — including government infrastructure and social programs — were placed on standby until new or additional financial resources became available.
“These projects fall under Unprogrammed Appropriations. Indeed, our government would not be acting with common sense if it shelved much-needed projects simply because one pocket is short on funds, while knowing fully that there is an abundance in the other,” Guevarra said.
He maintained that Special Provision No. 1(d) in the 2024 GAA and DOF Circular No. 003-2024 are valid, as they do not violate any constitutional provision.
The SC is set to continue oral arguments on the petitions on 25 February.
The petitions were filed by Senator Aquilino Pimentel III, Bayan Muna’s Neri Colmenares, and the 1Sambayanan Coalition.