The Supreme Court (SC) has unanimously ordered the return of P60 billion in excess funds to the Philippine Health Insurance Corporation (PhilHealth) through the 2026 General Appropriations Act (GAA).
In a 136-page en banc decision, the Court voided Special Provision 1(d), Chapter XLIII of the 2024 GAA; Department of Finance (DOF) Finance Circular No. 003-2024; and the subsequent transfer of P60 billion from PhilHealth.
The struck-down budget provision allowed the government to sweep “excess” funds from state-owned corporations back into the Treasury, while the DOF circular directed PhilHealth to remit P89.9 billion.
Former Finance Secretary and now Executive Secretary Ralph Recto previously ordered the transfer, maintaining that the DOF directive was lawful and supported by the same budget provisions now invalidated by the Court.
“We reiterate that the Executive simply complied with the congressional mandate under the 2024 GAA, and that the Department of Finance’s role is solely in revenue generation and debt and deficit management. We believed then, and still believe, that the directive was a common-sense approach to optimize government coffers without resorting to additional borrowing or new taxes,” Recto said.
He added that the Office of the Government Corporate Counsel (OGCC), the Governance Commission for GOCCs (GCG), and the Commission on Audit (COA) all cleared the remittance before it proceeded, and that the PhilHealth board also approved it.
Recto stressed that PhilHealth’s services were never impaired and that no member contributions were touched.
President Ferdinand R. Marcos Jr. had already ordered the return of the P60 billion in September — a move Recto previously described as a “proactive step.” Marcos had earlier authorized the transfer in 2024.