By Noriko Yamamoto

Supreme Court (SC) spokesperson Atty. Camille Ting announced on Friday, December 5, that the SC has directed the government to return the P60 billion that was initially moved to the national treasury back to the Philippine Health Insurance Corporation (PhilHealth) under the 2026 General Appropriations Act (GAA).

The directive came after the Court, in a decision penned by Associate Justice Amy C. Lazaro-Javier, nullified Special Provision 1(d), Chapter XLIII of the 2024 GAA and Department of Finance (DOF) Circular No. 003-2024 for grave abuse of discretion. 

The provision authorized the transfer of excess reserve funds of government-owned or controlled corporations (GOCCs) to the National Treasury for unprogrammed appropriations.

Furthermore, the issuance of DOF Circular No. 003-2024 is what prompted the four-tranche transfer of P89.9 billion to the national treasury.

However, only P60 billion was remitted to the national treasury after the SC issued a temporary restraining order (TRO) that blocked the release of the final tranche worth P29.9 billion.

The TRO stemmed from petitions challenging the constitutionality of the transfer, and Ting said that SC has barred any further remittance of the remaining P29.9 billion.

Finance Executive Secretary Ralph Recto defended the move, saying “We reiterate that the Executive simply complied with the congressional mandate under the 2024 GAA, and that the Department of Finance’s role is solely in revenue generation and debt and deficit management.”

He added, “We believed then, and still believe, that the directive was a common-sense approach to optimize government coffers without resorting to additional borrowing or new taxes.”

Recto further noted that the Office of the Government Corporate Counsel (OGCC), the Governance Commission for GOCCs (GCG), and the Commission on Audit (COA) had been consulted in conducting the transfer.

Additionally, the Court ruled that Special Provision 1(d) is void as it violates Section 11 of the Universal Healthcare Act (UHCA) and the Sin Tax Laws — explaining that Section 11 requires PhilHealth to maintain reserve funds capped at two years of projected program expenses, with unused funds invested and earnings added back to the reserves.

The Court explained that excess reserves must be used to expand benefits under the National Health Insurance Program (NHIP) and reduce member contributions, and that no portion of the reserve fund or its income is permitted to be transferred to the national government.

The SC also emphasized that the Congress cannot repeal or amend Section 11 through the GAA, which may only provide allocations aligned with existing laws.

Moreover, the Bureau of the Treasury (BTr) must set aside these amounts for UHCA implementation, and the Congress must fully allocate these funds to PhilHealth through the GAA without reduction, suspension, or withholding.

The Court stressed that while the State may pursue economic pressures, these must not override the constitutional guarantee of affordable healthcare for all Filipinos, while also declaring that the Finance Secretary has no authority to augment any item in the GAA, a power reserved solely to the President.

The SC clarified that President Ferdinand “Bongbong” Marcos Jr. did not commit the grave abuse of discretion when he certified House Bill No. 8980, now the 2024 GAA, as urgent to fast-track its passage.

It was further explained that the validity of a presidential certification of urgency is a matter for the Congress alone, except in cases of grave abuse of discretion.

The Congress, in this case, approved the certification to expedite the bill’s passage.

Ultimately, the Court denied the petitioners’ bid to hold the Finance Secretary liable for technical malversation or plunder, saying such issues are outside the scope of the case.