SC orders return of P60 billion ‘excess funds’ to PhilHealth

MANILA, Philippines — By a unanimous vote, the Supreme Court has ordered the return of P60 billion impounded by the government from the Philippine Health Insurance Corp. (PhilHealth), the SC announced yesterday.

The high tribunal also made permanent the temporary restraining order (TRO) it earlier issued against the transfer of the remaining P29.9 billion in supposedly unused PhilHealth funds to the national treasury.

The 136-page SC decision was promulgated on Dec. 3, but was released to the media only yesterday.

It found unconstitutional and voided a “special provision” in the  2024 General Appropriations Act (GAA), inserted during the bicameral conference, along with Department of Finance Circular No. 003-2024, which ordered the supposedly “excess reserve funds” of government-owned and controlled corporations (GOCCs) including PhilHealth to be turned over to the national treasury.

The impounded GOCC funds were used to finance the unprogrammed appropriations, seen as the new pork barrel, in the 2024 GAA.

Congress and the executive were ordered by the SC to include the P60 billion to be returned to PhilHealth in the 2026 GAA.

DOF Circular No. 003-2024 directed the transfer of P89.9 billion in balance or excess reserve funds of PhilHealth to the national treasury.

In 2024, PhilHealth transferred in three tranches a total of P60 billion to the national treasury, until the SC, later that year, issued a TRO against the transfer of the remaining P29.9 billion.

In its decision, the High Tribunal said both the Special Provision 1(d) of the 2024 GAA and the DOF Circular No. 003-2024 must be stricken down as void, for being issued and implemented “with grave abuse of discretion amounting to lack or excess of jurisdiction.”

More importantly, the SC said the assailed provision repeals Section 11 of Republic Act 11223 or the Universal Health Care Act (UHCA) which requires PhilHealth to maintain reserve funds up to a ceiling equivalent to two years of projected program expenses.

“Section 11 also expressly provides that no portion of the reserve fund or its income may be transferred to the national government or any of its agencies,” the SC pointed out.

The ruling, authored by Associate Justice Amy Lazaro-Javier, stated: “The issue was never about ‘idle’ funds; it was about funds deliberately made idle at PhilHealth, turned into a pliable ‘fund balance’ ripe for exploitation, wittingly or unwittingly.”

OSG to review SC ruling

Malacañang respects the decision of the SC declaring as unconstitutional the transfer of P60-billion unused funds of PhilHealth even as the Office of the Solicitor General will review the decision and decide whether to file an appeal.

“We respect the decision of the Supreme Court. The Office of the Solicitor General will review the ruling and decide on the appropriate course of action to take including the filing of a motion for reconsideration,” Presidential Communications Secretary Dave Gomez said on Friday.

With regards to the fund transfer, Gomez maintained the executive simply acted in accordance with the congressional mandate under the 2024 GAA.

Gomez added that the President took proactive steps to restore PhilHealth’s excess fund worth P60 billion in “recognition of the agency’s stronger performance, increased absorptive capacity and expanded benefits in line with the government’s goal of delivering universal health care for all Filipinos.”

In a separate statement, Executive Secretary Ralph Recto said 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.

“Before any remittance occurred, the Office of the Government Corporate Counsel, the Governance Commission for GOCCs and the Commission on Audit gave DOF the green light to do so. The PhilHealth board also approved the transfer,” Recto added.

The SC rejected a petition to determine if Recto can be held liable for technical malversation or plunder.

It also ruled that President Marcos, in certifying the 2024 GAA as urgent, did not act beyond his authority.

Restored in budget

The proposed 2026 budget recently approved on second reading by the Senate is already compliant with the latest SC decision ordering the return of P60 billion back to PhilHealth.

Senate finance committee chair Sherwin Gatchalian said the House of Representatives-approved General Appropriations Bill (GAB) already complied with the SC ruling after President Marcos last September said the PhilHealth fund was restored due to government savings.

“The 2026 budget proposal contains a P60-billion allocation on top of a P53-bullion regular funding for PhilHealth. The P60 billion fully complies with the SC ruling,” Gatchalian said yesterday.

According to the Senate finance committee report on its version of the GAB, PhilHealth was allocated P113.26 billion in the proposed P6.793-trillion national budget for 2026. This amount is unchanged in both House and Senate versions of the GAB.

A win for every Pinoy

The petitioners thanked the SC “for its clarity and firm commitment to the Constitution… this decision ensures that PhilHealth funds remain exclusively for healthcare services and are protected from diversion.”

“The ruling is a win for every Filipino,” according to the petitioners including former senator Aquilino Pimentel III, several labor and medical groups, Bayan Muna, 1Sambayan, University of the Philippines Law Class of 1975 and healthcare organizations.

The Department of Health thanked the SC, with Secretary Ted Herbosa saying the DOH and its attached agencies, including PhilHealth, are committed to implementing the Universal Health Care Act through sound and sustainable health financing.

PhilHealth welcomed the High Court’s decision. “We know that this decision means a challenge for us to ensure that the amount will be properly used in strengthening health services,” said PhilHealth.

Akbayan party-list Rep. Perci Cendaña welcomed yesterday the SC decision. “This is a good news to our countrymen who are lacking in good health services,” he said.

House deputy minority leader and ML party-list Rep. Leila de Lima also welcomed the decision. — Helen Flores, Marc Jayson Cayabyab, Jose Rodel Clapano, Marco Luis Beech, Rhodina Villanueva