DOF to comply if SC orders return of PhilHealth reserve funds
MANILA, Philippines — Finance Secretary Ralph Recto on Wednesday said the government would comply should the Supreme Court direct it to return the Philippine Health Insurance Corporation (PhilHealth) reserve funds which were transferred to the national treasury.
Recto made the pronouncement during the continuation of the Supreme Court’s (SC) Oral Arguments on the controversial transfer of the P89.9 billion PhilHealth excess reserve funds to the national treasury.
During the arguments, Associate Justice Ricardo Rosario asked Recto if the government would be able to return Philhealth excess funds should the court direct it to do so, to which he responded in the affirmative.
READ: SolGen defends transfer of PhilHealth excess funds to nat’l treasury
“Naturally, if the Court were to tell the executive to return the money, we will include that in the National Expenditure Program for 2026. But having said that assuming that the ruling were for 2025, that will add a fiscal pressure to our deficit and that would entail us not hitting our deficit target this year,” he added.
According to Recto, missing the target deficit would render it unable to attain the credit rating upgrade it predicted to achieve in “the next 18 months.”
Recto also defended the move to transfer PhilHealth’s excess funds, stating that it was necessary to lower the country’s national debt—a move named as “Bayanihan 3.”
The finance chief explained that Bayanihan 3 mobilizes all available resources, including idle, excess, and sleeping public funds “to help the economy recover faster, create more jobs, increase incomes, and reduce poverty in the process.”
“This Framework ensures that we reduce our fiscal deficit from a high of 8.6 percent to GDP (gross domestic product) in 2021 to only 3.7 percent in 2028,” Recto said, referring to the Bayanihan 3.
“Last year, we already hit our target of reducing this to 5.7 percent. This will allow us to sustainably reduce our national government debt to 56.3 percent in 2028,” he added.
He then clarified that the DOF assessed all government-owned and controlled corporations, not just PhilHealth.
“And with our extensive review, we found out that PhilHealth has accumulated a very substantial excess, unused, and idle funds over the past few years,” he said.
However, Atty. Neri Colmenares, who is among the petitioners against the transfer of the PhilHealth funds, argued against Recto’s defense.
“I really commiserate with our former colleague in congress because he is in a tough position, to gather these unused funds of course is important, it’s fiscal responsibility to gather unused funds, but fiscal responsibility ends when it transgresses the constitution,” said Colmenares.
He then pointed out that if the government really intended to mock up unused funds, then it should have been included in the National Expenditures Act to be approved by Congress “rather than surreptitiously insert it through a bicameral committee.”
PhilHealth’s P89.90 billion excess funds—P20 billion has already been transferred to the national treasury on May 10 2024, followed by P10 billion on Aug. 21 in the same year.
The third tranche at P30 billion was also transferred in October, 2024, while the P29.90 billion remaining funds were supposed to be transferred in November but were halted through a temporary restraining order from the SC.
