PhilHealth fund transfer and the Ombudsman decision

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The Philippines’ outstanding public debt, actual plus guaranteed debt, has been rising fast since the lockdown dictatorship of 2020-2021.

From only P8.22 trillion in 2019,  it rose to P10.25 trillion in 2020, P12.15 trillion in 2021, P14.97 trillion in 2023 and P18.05 trillion in 2025 — a P10.2 trillion increase in just six years. Latest data showed our debt at P18.85 trillion in April 2026.

Our budget deficit also increased from an average of P0.61 trillion a year in 2018-2019 to P1.54 trillion a year in 2020-2025.

Our interest payment alone for the public debt is rising from P360.9 billion in 2019 to P429.4 billion in 2021, P628.3 billion in 2023 and P864.1 billion in 2025, or an average of P2.37 billion a day.

In January-April 2026, our interest payment amounted to P336.7 billion or an average of P2.8 billion a day. Principal amortization is not yet included.

With this kind of ever-rising public debt stock and ever-rising interest payment alone, fiscal managers are expected to find ways to reduce the debt burden. A P1 billion reduction in interest payment is P1 billion that can be used for other economic and social spending.

That is one of the fiscal pressures when former  finance secretary and now Executive Secretary Ralph Recto issued a DOF circular in 2024 that transferred P60 billion in excess funds of PhilHealth back to the National Treasury.

Recto was sued by some doctors and lawyers with malicious and delusional accusations of “Illegal use of public funds or property” and “plunder.”

At first glance, these two accusations are already wrong and fictitious, allegations that are based on emotion and not reason.

One, there was a legal order from Congress via RA 11975 or the General Appropriations Act of 2024, Special Provision 1(d) saying that “Availment of Unprogrammed Appropriations… Fund balance of GOCCs… The Department of Finance shall issue the guidelines to implement this provision…”

So Congress ordered the DOF. The DOF cannot disobey Congress so Recto issued DOF Circular 003-2024 that remitted the PhilHealth excess funds back to the National Treasury. The accusation of “illegal” use of public funds is fictitious because there is legal basis, a budget law enacted by Congress.

Two, “plunder” means “use of high office for personal enrichment.” There was only movement of funds from PhilHealth to the National Treasury, from one government agency to another agency and not from government to him or his family, subordinate or business associate. The accusation of “plunder” is fictional.

See these reports in The STAR this year: “Doctors, lawyers file plunder, graft complaints vs Recto.” (Jan. 15), “Plunder raps filed vs Recto, ex-PhilHealth boss” (Jan. 16), “Health reform advocate files plunder raps vs Recto, Go over PhilHealth fund” (May 26). And just the other day, “Ombudsman dismisses plunder, malversation raps vs Recto over PhilHealth funds” (June 9).

The Ombudsman headed by former Justice secretary Boying Remulla dismissed the criminal and administrative complaints against Recto and (Emmanuel) Ledesma of PhilHealth. Good ruling, Ombudsman Boying.

Back to fiscal economics. By transferring P60 billion back to the Treasury,  Recto has reduced government borrowing by the same amount in 2024. The average rate of government 10-year Treasury bonds in 2024 was 6.27 percent. So the government has was able to save interest payments of (P60 billion) x (6.69 percent) = P3.76 billion.

The government avoided borrowing P60 billion plus it avoided interest payment of P3.76 billion. This equals P63.76 billion of avoided increase in our public debt stock in 2024. That is a significant amount of savings. The emotional complainants are incapable of comprehending this side of the issue.

On the report of “Health reform advocate files plunder raps vs Recto, Go over PhilHealth fund,” just two weeks ago, it refers to Dr. Tony Leachon. The “health reforms” that he advocates are actually the same health reforms pushed by so many other health groups and  NGOs, like more money for DOH and PhilHealth, more sin tax hike.

My impression is that the “health reform” that really differentiates his agenda with the agenda of other health groups and NGOs is that he wants to be the next DOH Secretary. I could be wrong in this impression but that is how I see his continued high-profile political actions.

He has coined the “health reform advocate” since about 2012 to present. Too bad he has been ignored many times by four presidents. The DOH Secretaries from 2010 to present are Ennrique Ona, Janette Garin, Paulyn Ubial, Francisco Duque III,  Maria Rosario Vergeire and Teodoro Herbosa.

So I think Recto’s statement that Leachon’s political and legal actions are part of his “political audition” for the next administration is correct.

Consider also that during the lockdown dictatorship, the Philippine economy contracted by -9.5 percent in 2020 – the worst in Asia that year and the worst in the Philippines’ economic history since post-WW2.

Our public debt/GDP ratio also jumped big time from an average of 37.4 percent in pre-lockdown 2017-2019 to an average of 55.3 percent in 2020-2022.

The political tyranny during the lockdown was enabled and supported by medical tyranny, that people must be prevented from going out to work or travel unless they are “vaxxed-vaxxed-vaxxed.” COVID vaccination became mandatory, choice was zero because people cannot even enter schools, malls, office buildings, ride planes or boats unless they have a vax card.

Many of the high profile doctors and medical tyrants that period have since become silent, they must have realized the economic sabotage they have done to the country.

But Mr. Tony Leachon continues with his high profile action.