A synopsis of the two Supreme Court (SC) sessions held on 4 and 25 February to hear oral arguments on the contentious transfer of excess funds from government-owned and controlled corporations (GOCC) indicated a sinister plot to revive the outlawed pork barrel system.
The SC issued a temporary restraining order on the remaining P29.9 billion in unremitted funds of the Philippine Health Insurance Corp. (PhilHealth).
In an intricate maneuver involving members of Congress, primarily the select legislators in the Bicameral Conference Committee that came up with the final draft of the 2024 national budget, the pork barrel system was brought back to life.
The Supreme Court had ruled in 2013 that the Priority Development Assistance Fund, legislative lump sums and similar pork barrel allocations in the budget were unconstitutional.
Since then attempts had been made in Congress to revive the illegal scheme but it was only in 2024 that a systemic effort involving members of the legislative and executive branches was contrived.
Legislators inserted Special Provision 1(d) in the 2024 General Appropriations Act allowing for GOCC fund balances to finance unprogrammed appropriations (UA).
The Department of Finance then issued Circular 003-2024 authorizing the transfer of excess GOCC funds to the National Treasury.
The process was necessary to create sources for the UA funds. Items listed in the UA were projects that were deprioritized to make way for pork barrel insertions in the 2024 GAA.
During the SC proceedings, Associate Justice Amy Lazaro-Javier questioned the legality of diverting PhilHealth funds, intended for healthcare under the Universal Health Care Act (RA 11223), to non-health projects like road maintenance and the Panay-Guimaras-Negros Island (PGN) bridges.
The law mandated that the funds be used exclusively for PhilHealth’s beneficiaries, including indirect contributors such as seniors and indigents, not for other fiscal operations.
Budget analyst Zy-za Suzara, invited as an amicus curiae, provided details showing the UA ballooning from P281.9 billion in the National Expenditure Program (NEP) to P731.4 billion in the 2024 GAA, for an increase of P449.5 billion.
The UA was made the conduit for a “new pork barrel scheme,” circumventing the 2013 SC ruling against the PDAF. The transfer of PhilHealth’s P89.9 billion, with P60 billion already remitted, and PDIC’s P107 billion was used to fill the funding gap.
Lazaro-Javier noted that fully-funded projects, such as the P459 million undertaking for the peace process, were duplicated in the UA.
In its defense, the executive branch through Solicitor General Menardo Guevarra said the transfers were part of a “common sense” fiscal policy, contending that the P89.9-billion excess fund in PhilHealth was unutilized subsidies from 2021 to 2023 and not member contributions.
Raised in the two SC sessions was an “avalanche of funding” in agencies like the Department of Public Works and Highways, which gained P176 billion that went to legislators’ “hard and soft” projects.
The Bicameral Conference Committee was pinpointed as the culprit behind the opaque P449.5-billion surge in the UA.
Guevarra termed the bumping off of funded projects in the UA as a “congressional policy choice.” He also confirmed that, as of December 2024, much of the P60 billion transferred from PhilHealth had been spent.
The two SC sessions provided a window to how the UA, backed by GOCC funds, created a new avenue for discretionary spending akin to the banned PDAF, especially given the timing near the 2025 midterm elections.
The ongoing bet is that the SC would rule against the conspiracy of the DoF and the bicameral conference committee to create a slush fund to bankroll the campaigns of administration allies in the May polls.
The pork barrel projects were already funded under the 2024 GAA; what Finance Secretary Ralph Recto is now scrounging around for is money for the displaced vital projects.
The SC will likely junk the fiscal sleight of hand and order the return of the money to the GOCCs since it was an attempt to bypass the High Tribunal’s own 2013 ruling outlawing the PDAF.