The practice of relocating idle government funds to respond to national emergencies is not new, former Finance Secretary Margarito Teves, one of the amici curiae, told the Supreme Court.
This was ventilated by Teves during the oral arguments on the petitions assailing the transfer of P89.9 billion in unutilized funds of PhilHealth to the national treasury, explaining that similar fund sweeps were carried out under past administrations to address fiscal crises.
When asked by Justice Ricardo Rosario on Wednesday if this had been done in the past, Teves answered, “Yes, Your Honor. These situations took place under very difficult circumstances.”
“In the case of President Ramos, it was done during the time when the Philippines and Asia were actually confronted with the Asian financial crisis. I recall he said, ‘Let’s try to get all the balances from different institutions that are now in the different banks and utilize this to address the crisis.’”
The former finance secretary, who served under President Gloria Macapagal-Arroyo, said the Ramos administration was able to address the fiscal challenge and even recorded a surplus following the reallocation of idle funds.
Teves said the Arroyo administration also used a similar approach, as it recognized that “special funds tend to have a tendency to increase” and that “there probably should be a way of making use of these funds if they’re not utilized.”
He added that under the Duterte administration, government balances were again reallocated as part of the COVID-19 response. “These circumstances, in fact, were already there,” Teves explained, adding that even in 2024, the lingering effects of the pandemic necessitated the expansion of unprogrammed appropriations.
The context presented by Teves lent further weight to the arguments presented by current Finance Secretary Ralph Recto, who stood firm on the constitutionality and economic wisdom of transferring idle, unused, and excess government subsidies from PhilHealth back to the National Treasury.
Recto, for his part, told the SC that every peso unused is a benefit denied to a Filipino citizen.
The current finance secretary pointed out that it is the DOF’s responsibility “to put every peso to work for the people. Hindi po pwede na kapag may nakita ang malaking pondo na natutulog at hindi nagagamit para sa kapakanan ng taong bayan, hahayaan na lang. Sleeping funds serve no one.”
Recto said, “We wouldn’t be doing our job, Your Honors, if we willfully neglect our duty to exercise fiscal prudence in this matter just because it is unusual. We wouldn’t be doing our job if we clung to convention over common sense.”