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MANILA, Philippines — A portion of the excess funds of the state-owned Philippine Health Insurance Corp. (PhilHealth) transferred to the national treasury was used to finance the recently released health emergency allowance (HEA) for health-care workers, the Department of Health (DOH) said on Wednesday.
DOH Assistant Secretary Albert Domingo told reporters that about P20 billion of the P89.9 billion of PhilHealth’s unused government subsidy was used to settle the unpaid HEA.
“We agree with our civil society organizations and individuals who say that health funds should be used for health purposes. As we understand it, and as stated by the [DOH], the funds taken from PhilHealth were used to fund the HEA for our health-care workers. So, in a sense, the money just moved from the bank to the people,” he explained.
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On July 5, Budget Secretary Amenah Pangandaman approved a special allotment release order amounting to P27.453 billion to settle the remaining unpaid HEA, upon the directive of President Marcos.
This was the same amount the DOH was requesting under its proposed 2025 budget for HEA claims to finally cover some five million remaining validated unpaid HEA claims and 4,283 COVID-19 sickness and death compensation claims of eligible health-care and nonhealth-care workers who served at the height of the pandemic.
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“This is a promise fulfilled,” said Pangandaman, adding that while the DOH had requested the money in its 2025 budget, her department exerted extra effort to find funds for the unpaid claims of health-care workers.
Congress probe
Lawmakers are divided on the controversial transfer of the P90 billion in unused funds of the state insurer to the national treasury for “unprogrammed appropriations.”
While House Assistant Minority Leader Arlene Brosas sought a congressional inquiry on the “irregular” transfer of PhilHealth’s unused funds, Ako Bicol party list Rep. Elizaldy Co, chair of the appropriations panel, backed the Department of Finance’s (DOF) move.
In the Senate, some lawmakers have expressed concerns on the “transfer and utilization of the reserve funds” of PhilHealth and Sen. Pia Cayetano, chair of the finance subcommittee on the DOH and the education sector, vowed to look into the matter.
In question is Circular No. 003-2024 issued by the DOF in February this year directing PhilHealth to remit the unused subsidies to the national treasury.
This, the DOF said, was in compliance with the provision in the 2024 General Appropriations Act, which was approved by Congress, allowing excess funds of government-owned and -controlled corporations (GOCCs) to be returned to the national coffers.
On Monday, independent health reform advocate Dr. Tony Leachon, former Finance Undersecretary Cielo Magno and Filomeno Sta. Ana III, executive director and cofounder of local think tank Action for Economic Reforms, warned that the new DOF circular might be a new way for the government to misappropriate funds.
They argued that it violated Republic Act No. 11223, or the Universal Health Care (UHC) Act of 2019, Section 11 of which says that whenever actual reserves exceed the required ceiling at the end of the fiscal year, the excess can be used only to increase the program’s benefits and decrease the members’ contribution amounts. It also notes that no portion of the reserve fund or income can go to the general fund of the national government or any of its agencies or GOCCs.
State subsidies, not reserves
However, Finance Secretary Ralph Recto quickly responded to say that the remittances being referred to by the circular are not from their member contributions, but from the billions in unused subsidies from the national government.
In the case of PhilHealth, he said the unutilized government subsidies were not part of its reserve funds, nor income that is being restricted by the UHC law.
“Overall, the move complies with all laws, specifically the General Appropriations Act of 2024,” Recto noted.
Co, for his part, also stressed that the funds being transferred to the treasury were excess funds of GOCCs and were “not derived from member contributions. It is essential to understand that these funds are distinct and separate from any contributions made by PhilHealth members.”
“This initiative will rechannel billions of dormant funds to help millions of Filipinos enjoy better health care and social services, and bolster economic activity by investing more in social services and infrastructure projects at no extra cost to the government,” he said.
The lawmaker likewise noted that putting “dormant” funds to better use would reduce the pressure on the government to borrow more and for Congress to pass new tax measures.
Need for transparency
Brosas, the Gabriela women’s party list representative, warned PhilHealth to expect to be thoroughly scrutinized in the hearings for the 2025 general appropriations bill.
House Deputy Minority Leader and ACT Teachers party list Rep. France Castro also demanded “that the Marcos administration immediately return these funds to PhilHealth, where they rightfully belong and should be used for the benefit of its members.”
In the Upper Chamber, Cayetano said she would study the matter carefully and would consider the DOF’s claim that the funds were government subsidy and not actual revenues of PhilHealth nor revenues from the contribution of its members.
“We just need to be transparent and responsible to the public. If it’s the members’ contribution, we follow the law that this is only for the use of PhilHealth to fund additional programs and services,” she said.
“If it’s a government subsidy, then I think that’s an interesting question,” she added.
Cayetano noted that there were unprogrammed funds every year under the national budget.
“So, can they get the funds allocated for PhilHealth? Because it was not used, PhilHealth being a GOCC (government-owned and -controlled corporation), is it covered? But the funds have already been mingled with that of the contributions of the members,” she said.
“I don’t have the answer but like the health advocates, I’m very concerned. I don’t want the funds for health care be reduced,” she stressed.
Sen. Joseph Victor Ejercito, author and sponsor of the UHC Act in the Senate, added that “the health fund should be used for health. Let’s prioritize improving the quality of benefits and reducing the contribution paid by our citizens.” INQ