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SC hit transfer of PhilHealth funds

By J.Lo

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“And as a matter of fact, as of December of 2024, total amount of P46 billion pesos, thereabouts, more or less, had been devoted under  unprogrammed appropriations for social,more particularly, health projects,” Supreme Court (SC) Associate Justice Amy Lazaro-Javier has questioned government’s transfer of unutilized funds of Philippine Health Insurance Corp. (PhilHealth) to national treasury to finance projects already fully funded in 2024 budget, including those not related to health care.

Lazaro-Javier raised questions during resumption of oral arguments on controversial P89.9-billion PhilHealth fund transfer to national treasury to fund unprogrammed appropriations in 2024 national budget.

Citing Department of Finance (DOF), she said  funds remitted to  national treasury were meant to fund “urgent” national projects, and among those identified as such were routine maintenance of national roads and  Panay-Guimaras-Negros (PGN) Island bridges project.

However, Lazaro-Javier pointed out that PGN project already received full funding from Export-Import Bank of Korea, amounting to P174.49 billion, as well as additional allocations from the 2022 and 2023 national budgets.

“Is there  urgency to transfer  PhilHealth funds when  project is already fully funded?” she asked Solicitor General Menardo Guevarra, represented  respondents,  House of Representatives and  Senate.

In response, Guevarra said Congress factors in whether  project can already be implemented in  given fiscal year.

“If  project that has already been identified and sufficiently funded is considered to be non-implementable for the given fiscal year, I think it is the decision of Congress in the exercise of its policy or wisdom, so to speak, to move it to  unprogrammed appropriations in the meantime,” he explained.

Lazaro-Javier then asked Guevarra if government had already spent any of  funds from  Korean loan for  PGN project, to which Guevarra said:

“There is nothing to spend for if  project has not even started.”

“So where is the money?” Lazaro-Javier asked.

Guevarra presumed that  money went to national treasury for use in unprogrammed projects, not clearly outlined in the budget.

On the issue of road maintenance funds, Guevarra admitted that  government did not specify  roads would be repaired using  unprogrammed funds, saying  decision is left to the implementing agency.

Lazaro-Javier also raised that  2024 General Appropriations Act (GAA) already allocated  P459-million budget under  Office of the Presidential Adviser on Peace, Reconciliation, and Unity for the management and supervision of a comprehensive peace process.

However,  additional P688 million was placed under unprogrammed appropriations for this purpose.

“Is  peace process part of  mandate of PhilHealth?”  SC associate justice said.

Guevarra declined to speculate on why lawmakers allocated  project under unprogrammed funds, but said  inclusion of such projects in  unprogrammed appropriations was merely  list and actual use of funds would still depend on  implementing agencies.

Citing Universal Health Care Act, Lazaro-Javier said funds appropriated for PhilHealth should be exclusively used for PhilHealth purposes” and “not for operations of any other department of government.”

She also noted that national government subsidy, identified as  source of appropriations for PhilHealth, is meant to specifically benefit indirect contributors, such as senior citizens and indigents.

Guevarra however assured  SC that most of  P60 billion excess funds remitted by PhilHealth to the national treasury were allocated to critical health and social service programs.

During  second round of oral arguments Guevarra said 2024 GAA directed  use of these funds for social and health-related projects.

PhilHealth’s remittance followed implementation of Special Provision 1(d) of  2024 GAA,  permits  utilization of government-owned and controlled corporations’ excess funds for priority programs in health, social services and infrastructure.

DOF executed  provision by issuing DOF Circular 003-2024, ensuring  proper allocation of  funds.

Based on DOF data, P46.61 billion out of  P60 billion was funneled into key health and social service initiatives.

Significant  portion, amounting to P27.45 billion, was used to pay  long-overdue public health emergency benefits and allowances for health care and non-health care workers who served during  COVID-19 pandemic.

Another P10 billion was allocated for medical assistance to indigent and financially incapacitated patients, while P4.10 billion was used to procure medical equipment for Department of Health hospitals, local government unit hospitals as well as primary care facilities.

Further, P3.37 billion was spent on construction of three new DOH health facilities and P1.69 billion was allocated to health facilities enhancement program.

Remaining  P13 billion was utilized for government counterpart financing of infrastructure projects designed to improve social determinants of health, such as food security and health care accessibility in remote areas.

Guevarra also noted that PhilHealth’s financial standing remained strong despite  remittance, allowing it to expand its benefit packages.

Supreme Court is set to resume oral arguments on the case on March 4. 

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