MANILA, Philippines – A group of petitioners led by Senator Aquilino “Koko” Pimentel III has filed a petition with the Supreme Court (SC), seeking to block the transfer of P89.9 billion of PhilHealth funds to the national budget.

The petitioners, who filed a petition for certiorari and prohibition with the High Court on Friday, August 2, included former Department of Finance (DOF) undersecretary Cielo Magno, constitutional law expert Dante Gatmaytan, and the Philippine Medical Association, among others.

“The pilfering of the reserve funds is a grave disservice to the Filipino people who depend on PhilHealth for financial risk protection from illness and who are still heavily burdened by out-of-pocket health expenditure. With consistently rising inflation and worsening social conditions, it is imperative that these funds be used exclusively for the implementation of the Universal Health Care (UHC) Act, the expansion of benefit packages, and the reduction of premium contributions,” the group said.

In their petition, the group asked the SC to issue a temporary restraining order to prevent the transfer. They also want the High Court to declare DOF Circular No. 003-2024 unconstitutional. Aside from these, they also want the DOF to return to PhilHealth any funds that the government corporation has already transferred to the agency after the circular took effect.

Under the 2024 General Appropriations Act (budget law), the government can get unprogrammed funds from four sources, which includes the fund balance of government-owned or controlled corporations (GOCCs) like PhilHealth. Unprogrammed funds are standby funds that the government can use when unexpected situations happen. (READ: The unprogrammed funds issue in the Marcos admin’s 2024 budget, simplified)

Now, under the 2024 budget law, the government can get the fund balance of GOCCs for its unprogrammed funds “from any remainder resulting from the review and reduction of their reserve funds to reasonable levels taking into account the disbursement from prior years.”

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In April, the DOF asked the PhilHealth to remit P89.9 billion to the Bureau of Treasury within 15 days. However, experts warned that the government corporation’s money cannot be reallocated that easy.

During a Senate hearing on July 30, finance chief Ralph Recto defended the transfer and said his agency was just doing what the law empowers them to do. When asked if the PhilHealth can be spared from the transfer, Recto said they would if the legislature compels them.

In their petition, Pimentel and his group argued that the inclusion of the provision on unprogrammed funds in the 2024 budget law is unconstitutional and exceeds the Congress’ power to allocate funds. They added that the DOF circular also violates article VI, section 29 (3) of the 1987 Constitution, which states that “all money collected on any tax levied for a special purpose shall be treated as a special fund and paid out for such purpose only.”

“Despite Congress being vested with the powers of appropriation, the Constitution demands that the expenditure of these funds have distinct ‘items,’ qualifications, limitations, or conditions to which they are subject. The provision fails to meet this criteria, making it unconstitutional,” the group added.

The group also argued that the provision in the 2024 budget law on unprogrammed funds cannot amend the provisions of the UHC act on PhilHealth.

“By diverting the funds to the unappropriated programs of the national budget, the Congress has given the Executive Branch the discretion to decide how to spend funds which have been earmarked specifically for the implementation of the UHC Act,” they said. – Rappler.com