SC justice: Return PhilHealth funds collected, overhaul leadership

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MANILA, Philippines – Maybe it is time for a leadership overhaul in the Philippine Health Insurance Corporation (PhilHealth) and ask for the return of its P60 billion from the National Treasury, a Supreme Court associate justice said on Tuesday, March 4.

“It is incumbent on the part of the government to return the P60 billion that was transmitted already,” Supreme Court Associate Justice Antonio Kho Jr. said during the third day of oral arguments on the Marcos Jr. administration’s controversial decision to transfer funds from PhilHealth to the National Treasury.

Kho’s statement came after Health Assistant Secretary Albert Domingo admitted that the issue of the PhilHealth fund transfer reaching the High Court sent a strong signal for the state insurer to increase benefit packages. As previously cited by PhilHealth leaders, its packages have not been updated for over a decade.

PhilHealth had P89.9 billion in unutilized government subsidies, which should have been used to cover for non-paying members such as indigent individuals, senior citizens, and persons with disabilities. The amount was the total left over from government subsidies in 2021, 2022, and 2023.

It was the basis of the Department of Finance’s circular in 2024 on the transfer of PhilHealth funds to the National Treasury.

The state insurer was supposed to return the funds in four tranches but a temporary restraining order from the Supreme Court halted the transmittal of the last tranche. Only P60 billion — P20 billion from May 2024, P10 billion from August, and P30 billion from October — reached the National Treasury.

“This is the start, Your Honor, if the case is allowed to proceed, if the transfer is allowed to proceed, it is a ‘use it or lose it’ signal, which all national government agencies have so that we will use our funds,” said Domingo.

“GOCCs (government-owned and -controlled corporations) like PhilHealth do not have [that] signal and they think, at least before the current CEO (chief executive officer) or the current administration, they think that just because there is an earmark, whether hard or soft, that they will get money and there is no stimulus for them to actually increase benefits,” he added.

Leadership overhaul

Domingo further elaborated on Tuesday that the state insurer had always received instruction to increase and improve benefit packages. The country already has had three presidents since 2013, he said, while PhilHealth has had over 10 leaders and yet nothing happened.

To which, Kho replied: “Probably, it’s time to overhaul PhilHealth and change the board for not complying [with] what the law requires.”

“Hindi kasalanan ng tao ‘yan for not availing all of these benefits. Apparently, from your own words, kasalanan ‘yan ng administration — this administration, last administration, or the previous administration. At kasalanan ‘yan ng PhilHealth board, ‘wag natin pahirapan ‘yung mga tao because nandiyan naman ‘yung pera,” he added.

(The people are not at fault for not availing all of these benefits. Apparently, from your own words, the administration is at fault — this administration, last administration, or the previous administration. And PhilHealth is also to blame, we should not burden our people because the money is there.)

On the morning of February 4, the first day of the oral arguments on the fund transfer, the government announced that incumbent PhilHealth chief Emmanuel Ledesma Jr. stepped down from his post. President Ferdinand Marcos Jr. would later reveal that Ledesma found the move to public service from the private sector “to be jarring” as he was not used to politics.

Aside from the fund transfer, PhilHealth faced a couple of issues during Ledesma’s term, including alloting a P138-million budget for its 30th anniversary and losing government subsidies for 2025 after it was found to not have been utilizing its funds properly.

US-trained orthopedic surgeon Edwin Mercado has since been appointed to the post vacated by Ledesma.

Domingo said that PhilHealth is currently working on correcting its mistakes.

“Maybe that’s a good point from PhilHealth,” Kho said.

“But we cannot close our eyes for the past years that it failed to give benefits so in that case, maybe PhilHealth can already request the President to return the money, the P60 billion, that were transmitted to the government for unprogrammed funds. Return it to PhilHealth and [have] PhilHealth expand its benefits, hire more people to answer for the needs of the health of our people,” he added.

Why tap PhilHealth in the first place?

On Tuesday, the DOF was also on the hot seat for tapping PhilHealth funds.

“The fault is on PhilHealth for not spending this. It is not for the government to take this away and for PhilHealth to expand its programs so that the subsidies that were allocated by government for healthcare should not be taken away,” said Kho.

“Instead of asking, directing the DOF, the national government directing PhilHealth, ’Oy PhilHealth, gastusin niyo ito para sa taumbayan,’ kinuha ninyo at binigay sa iba.”

(‘PhilHealth, use this to spend for our people,’ but you collected it and gave it to others.)

The 2024 General Appropriations Act has a special provision on government’s unprogrammed funds, which is the source of financing for projects that have no definite funds. It includes getting the fund balance of GOCCs after the “review and reduction” of their reserve funds.

This has been flagged by petitioners, citing the Universal Healthcare Act’s provisions that make it illegal. During earlier proceedings, SC Associate Justice Amy Lazaro-Javier also called PhilHealth’s reserve funds “sacred” which should be used only for healthcare.

Deputy Treasurer Eduardo Anthony Mariño III explained that PhilHealth has a “structural absorptive capacity issue.” Aside from expanding benefits, it also has to address supply side issues.

“Number 1, the insufficiency of the compensation of our healthcare workers or healthcare professionals. Number 2, hospitals, healthcare facilities — even if benefit expansions occur, if there is no hospital within the vicinity of a specific beneficiary particularly an indigent beneficiary, then they will not be able [to] avail of these expanded benefits,” Mariño cited among other issues.

But Kho pointed out that these issues are ones that the government could address by itself. “You’re just providing [an] excuse to get this money out of PhilHealth.” – Rappler.com