COA affirms disallowance of P56-M incentives for PhilHealth execs

/ 06:18 PM October 08, 2019

MANILA, Philippines – The Commission on Audit (COA) has affirmed its notice of disallowance P56.57 million worth of cash grants and allowances given to officials of the Philippine Health Insurance Corp. (PhilHealth) in Eastern Visayas.

In a decision dated Sept. 19, 2019, COA denied the motion for reconsideration filed by PhilHealth’s Eastern Visayas office and its employees after it was ruled that the government-owned and controlled corporation (GOCC) had no power to fix the compensation of its personnel.


PhilHealth insists that it has the right to assigns its own compensation rates without prior approval of the Office of the President, as provided in Section 15(n) of the National Health Insurance Act of 1995 (Republic Act No. 7875).

“This contention is misplaced,” COA said in its decision, which signed by Chairman Michael Aguinaldo and Commissioners Jose Fabia and Roland Pondoc.


“The Board of Directors (BOD) may have authority to determine and fix their own compensation and classification system, but such authority is not absolute and is at all times subject to existing rules and regulations,” the COA decision said.

COA issued the original notice of disallowance after finding out that PhilHealth, in the calendar year 2012, gave the P56.57 million in benefits to its employees in Eastern Visayas (Region 8).

Of the said amount, the five highest allocations were labeled as follows:

  • Productivity Incentive Allowance: P10.97 million
  • Educational Assistance: P10.71 million
  • Christmas Package: P9.544 million
  • Welfare Support Allowance: P7.245 million
  • Shuttle Service Allowance: P5.591 million

COA also mentioned Section 9 of the Congress Joint Resolution No. 4 issued last June 2009, which requires any salary increment for government employees, including the grant of “new allowances, benefits, and incentives, or any increase thereof” to be subjected to the Department of Budget and Management (DBM) recommendation and the approval of the President.

COA hied PhilHealth for not considering its operating budget as a trust fund, especially since its operations are funded from the premium contributions of its members.

“Further, on the presumption that PhilHealth is exempt from the coverage of the Office of Compensation and Position Classification, Section 6 of PD No. 1597 also provides that it shall still report to the President, through the DBM, its position classification, and compensation plans,” COA stressed.

“The main source of PhilHealth’s operating budget comes from the contributions of its members. Like any other social insurance, the members’ contributions are treated as a trust fund, and thus, should be managed and protected with utmost integrity,” they added.


The PhilHealth officials whom COA found liable in the notice of disallowance are regional lawyer Jerry Ibay, regional vice president who served from January to May 2012; Walter Bacareza, regional vice president who served from June to December 2012; division chief IV Renato Limsiaco Jr.; officer-in-charge Arlan Granali; fiscal controller IV Archimedes Villasin; fiscal controller I Benjamin Gabrieles Jr.; planning officer III Chona Solarta, and several other PhilHealth employees.

COA issued the original notice of disallowance in May 2013, while Bacareza filed the motion for reconsideration in December 2015.


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TAGS: COA, Commission On Audit, Incentives, notice of disallowance, Philhealth
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