Responding to defenses of the PhilHealth fund transfer

The third tranche of the controversial P89.9 billion in Philippine Health Insurance Corp. (PhilHealth) “unused” funds, worth P30 billion, is set to be transferred from PhilHealth to the National Treasury on Oct. 16. The last tranche worth P29.9 billion, is scheduled to be transferred in November.

In the Aug. 27 Senate hearing for the 2025 budget of the Department of Finance (DoF), Finance Secretary Ralph Recto noted that these next tranches could be transferred earlier than scheduled, depending on the cash flow of PhilHealth.

Despite the impending fund transfers, the Supreme Court scheduled oral arguments for the petition filed by Senator Koko Pimentel, the Philippine Medical Association, and other groups, seeking a Temporary Restraining Order (TRO) and a status quo ante order for the transfer to Jan. 14, 2025, by which time it may be too late to recover the money of PhilHealth members.

Over the past few months, a broad segment of society has opposed the transfer of unused PhilHealth funds to the National Treasury to fund unprogrammed appropriations, asserting that PhilHealth’s funds rightfully belong to their members: the Filipino people.

Healthcare workers were among the first to mobilize against the transfer of funds. In an open letter to President Ferdinand “Bongbong” Marcos, Jr. dated July 25, 83 medical societies and healthcare worker organizations (including the Philippine Medical Association and the professional organizations of nurses, pharmacists, physical therapists, occupational therapists, and midwives in the Philippines) called for the P89.9 billion to remain within PhilHealth, an immediate increase in the scope and coverage of PhilHealth benefits, and reforms to enhance PhilHealth’s benefit development capacity.

“The government cannot take back subsidies it used to pay for premiums of disadvantaged populations. Doing so will inadvertently lay the burden of healthcare entirely on the shoulders of formal payors, many of whom are in need of help themselves,” the healthcare workers’ letter reads. The President has yet to respond to their call.

Six former Secretaries of Health — Dr. Jaime Galvez-Tan, Dr. Manuel Dayrit, Dr. Francisco Duque, Dr. Esperanza Cabral, Dr. Enrique Ona, and Dr. Paulyn Ubial — joined the doctors and healthcare professionals in their call to stop the transfer of PhilHealth funds.

Lawmakers have also staunchly opposed the transfer of PhilHealth funds — in the Senate, Senators Koko Pimentel, Bong Go, JV Ejercito, Pia Cayetano, and Risa Hontiveros made statements calling on the DoF to stop the PhilHealth fund transfer. Meanwhile in Congress, Representatives Rufus Rodriguez, Wilbert Lee, France Castro, and Arlene Brosas denounced the unjust and immoral transfer.

Caritas, the Catholic Church’s development and advocacy arm in the Philippines, also opposed the PhilHealth fund transfer and supported the Supreme Court petition filed by Senator Pimentel’s group (“Caritas PH backs petition against PhilHealth funds transfer,” CBCP News, Aug. 19). “We appeal to the honorable justices of our Supreme Court to uphold the principles of the 2019 Universal Healthcare Law and protect every Filipino’s right to health by deciding in favor of the petition,” said Bishop Colin Jose Bagaforo in the statement.

Groups representing labor, business, senior citizens, persons with disability (PWD), and women have also joined the call to stop the transfers.

The DoF and its Secretary Ralph Recto, however, maintain that the fund transfer is sound and justifiable.

Secretary Recto argues that tapping PhilHealth’s funds will not impact its plan to expand benefit packages and that PhilHealth still has plenty of funds with which it can perform its mandate.

But PhilHealth’s remaining reserve chest does not justify the raiding of P89.9 billion worth of funds which should have otherwise been used for the healthcare of its members. Further, we cannot underestimate the huge and ever-increasing costs to implement Universal Healthcare, and even if no member’s benefits will be reduced due to the transfer of P89.9 billion, diverting funds will only take us further from our aspiration of reduced out-of-pocket payments and affordable, accessible, and quality healthcare for all Filipinos.

Seven former Finance Secretaries in a joint statement posited that mobilizing PhilHealth’s funds for public projects is more efficient than imposing additional taxes or increasing public debt. “Responsible public financing requires considering opportunity costs. If unused funds are left dormant, the potential benefits are lost. Every unused peso represents development denied for Filipinos,” the former Finance Secretaries said.

But to quote the latest statement opposing the PhilHealth fund transfer issued by 16 former government officials including former National Economic and Development Authority (NEDA) Secretaries Cielito Habito and Ernesto Pernia, it is “beyond reason to establish a trade-off between economic growth through infrastructure and social programs and public health.” The COVID-19 pandemic taught us that the health of our economy is contingent on the health of our people.

Another point that our Finance Secretary and our economic managers have yet to acknowledge is that our economic managers are doing a cash sweep of government-owned and -controlled corporations (GOCCs) like PhilHealth because Congress inserted massive pork barrel allocations in the 2024 General Appropriations Act (GAA), displacing essential priority projects which were then transferred to the unprogrammed appropriations. PhilHealth members should not have to bear the brunt of irresponsible fiscal decisions made by our Congress and approved by our economic managers.

Our economic managers are deferring to the Supreme Court to make the call as to whether PhilHealth’s funds should be returned, noting that they will follow the Court’s directives. While we pray that the Supreme Court issue a TRO before the scheduled October transfers, the DoF should make the prudent decision to immediately stop the next transfers.

Pia Rodrigo is strategic communications officer at Action for Economic Reforms.