During the continuation of the oral arguments on the petition questioning the legality of the transfer of PhilHealth’s unutilized funds to the national treasury, Supreme Court Associate Justice Amy Lazaro-Javier asked two crucial questions:
The first question was leading: “Why is there an urgency to transfer funds when the Panay-Guimaras-Negros (PGN) Bridges project is already fully funded by the Export-Import Bank of Korea.”
The second question was globally devastating: “Where is the money?” P60 billion is a huge sum. Many eyes were on someone who was at the hearing.
The Marcos Jr. administration has been placed in an ugly situation. To many people, the fault lies with the Secretary of Finance who issued DoF Circular 003-2024 without the approval of the President.
Zy-Za Nadine Suzara, a public budget analyst, presented the broad political context. And she gave the sharpest criticism.
“The controversial transfer of PhilHealth funds to the Treasury operationalized through DoF Circular 003-2024 was a consequence of a larger and more serious problem — the new scheme to fund the pork barrel despite the Supreme Court having declared the PDAF unconstitutional.
To circumvent that SC ruling, legislators have been deliberately defunding strategic development programs and projects in the national budget’s programmed appropriations and transferring the funds to the unprogrammed appropriations, resulting in an excessive level of standby appropriations.
This way of massively funding patronage driven projects distorts the integrity of the budget and the budget process itself. “My analysis of the 2022 to 2024 national budgets reveals that the pork barrel now constitutes nearly 20 percent of the total national budget,” budget analyst Suzara concluded.
President Marcos Jr. could not have approved the ideas and practices introduced by Recto in administering the fiscal affairs of the state, which are now under question. Keen observers believe DoF Circular 003-2024 did not have the approval of the President. They believe Recto acted alone. Then he should be man enough to save the President and his administration from this difficult situation. He should resign.
On 3 September 2024, I wrote in this column that Recto was not correct, that his DoF Circular 003-2024 based on the “insertion of a general provision in the 2024 General Appropriations Act, specifically Section 1 (d) of XLII, on unprogrammed appropriations is an instrument of corruption.”
Based on our experience in the aftermath of the congressional pork barrel fund (Priority Development Assistance Fund) and the Disbursement Acceleration Program (DAP) investigations. The nature of the insertion rendered Recto DoF Circular 003-2024 is worse than Florerncio Abad’s Budget Circular 541-2012 on two counts.
First, Abad’s Budget Circular 541-2012 had a written presidential approval — but was still very bad — while Recto’s DoF Circular 003-2024 had no written approval whatsoever. Keen observers were quick to opine that this must be the reason President Marcos Jr. sought the opinion of the seven former finance chiefs on the wisdom of what Recto was doing.
Second, Recto’s circular covered what is by its nature a trust fund. It is the money of the poor for the poor, money earned with the blood of government employees for their health insurance premiums. It is for indigents, senior citizens, persons with disability, Sangguniang Kabataan officials and all Filipinos aged 21 years and above without the capacity to pay for coverage under Article II, Section 15 of the Constitution.