FUNDS OF AND FOR THE PEOPLE

November 9, 2024 Opinion

The Supreme Court (SC) recently issued a temporary restraining order (TRO) on the transfer of ‘excess’ or unused funds of the Philippine Health Insurance Corp. (PhilHealth) to the national treasury. The decision which was made in full court is to be effectively immediately and also requires to conduct of oral arguments on January next year. The TRO by the SC may have come a little late considering that several billions of the unutilized funds from the Philhealth have already been transferred to the national treasury with 20 billion transferred in May 2024, 10 billion in august, 30 billion during the second week of October and the remaining fund of 30 billion was to be transferred this November.

All in All a total amount of 89.9 billion pesos of unused funds is deposited in the coffers of Philhealth and which was later identified by the Department of Finance and the Department of Budget and Management as funds which can be transferred to the national treasury to be utilized and augment the government’s unprogrammed appropriations. This is the gist of DOF Circular No. 003-2024 which directed the transfer to the national treasury of unused subsidies from government owned and controlled corporations (GOCC). As to the legal basis of using unutilized funds from GOCCs to finance projects under unprogrammed appropriations Finance Secretary Ralph Recto clarified that this can be found in Republic Act 11975 or the General Appropriations Act (GAA) of 2024.

The finance secretary likewise clarified that what will be transferred from Philhealth to the national treasury are those funds that are subsidies given by the government and will not include the benefits and contribution of Philhealth members. In the website of the DOF we can find the full explanation of Finance Secretary Recto on the transfer of funds with the added clarification that these funds will be used for, but not limited, t the following programs and projects: Davao City By-Pass Construction Project; Samal Island Davao City Connector Project; Panay-Guimaras-Negros Island Bridges; Bataan-Cavite Interlink Bridge Project; Metro Manila Subway Project; and the Salary Standardization VI for government employees.

Of course, others have a different understanding regarding the transfer of these excess funds from the Philhealth
hence the three petitions filed by several legal luminaries, lawmakers and other personalities seeking to prevent such transfer and the eventual issuance by the SC of the said TRO. But the more pressing issue that must be resolved is
why does Philhealth have in its coffers billions of pesos which it has not used for its members? Were not these funds allocated by Philhealth during the past years for there various programs and projects that should have redound to the benefit of their members? These funds are subsidies given by the national government to Philhealth based on Republic Act 10351 which is an Act restructuring the Excise Tax on alcohol and tobacco products or otherwise known as the sin tax law.

Now paragraph (c) Section 8 of the said law provides the following: Incremental Revenues from the Excise Tax on Alcohol and Tobacco Products. “After deducting the allocations under Republic Act Nos. 7171 and 8240, eighty percent (80%) of the remaining balance of the incremental revenue derived from this Act shall be allocated for the universal health care under the National Health Insurance Program, the attainment of the millennium development goals and health awareness programs; and twenty percent (20%) shall be allocated nationwide, based on political and district subdivisions, for medical assistance and health enhancement facilities program, the annual requirements of which shall be determined by the Department of Health (DOH).”

Take note that 80% of the remaining balance of the incremental revenue derived from the said law is given to the
universal health care under the National Health Insurance Program which is basically the Philhealth. So I guess Philhealth should be put to task in explaining why they have almost 90 billion pesos in excess funds which they were not able to utilized under the universal health care program. Perhaps either or both houses of Congress can initiate a
legislative inquiry on the matter, even after the SC shall have made a decision on whether the transfer of these funds to the national treasury is valid.