Government Prepared to Return PhilHealth Funds
The government is ready to comply should the Supreme Court order the return of Philippine Health Insurance Corporation (PhilHealth) funds to unprogrammed appropriations, Finance Secretary Ralph Recto confirmed. This assurance came amid ongoing petitions questioning the handling of PhilHealth’s excess reserve funds totaling around P60 billion.
During a Development Budget Coordination Committee (DBCC) briefing with the House appropriations panel, Recto addressed concerns raised by Akbayan party-list Representative Chel Diokno about the possible Supreme Court ruling. “If the Supreme Court decides that the executive branch or the national government will have to return this money, then naturally the national government will comply,” Recto said.
Fiscal Impact and Budget Timing
Recto explained that if the Supreme Court rules in favor of the petitioners, the government might have to return the funds through the next budget cycle to prevent a sudden spike in the fiscal deficit. “If the decision comes in the middle of the budget year, it could increase the deficit and potentially affect our credit rating. Therefore, compliance would likely occur in the succeeding year’s budget,” he clarified.
Diokno acknowledged the financial challenge, stating, “That would cause a huge hole in the budget if that were to be the case.” Recto agreed, underlining the significant budgetary impact.
Additional Funds Under Scrutiny
The petitions also target the return of P104 billion from the Philippine Deposit Insurance Corporation (PDIC). The Supreme Court concluded oral arguments in April 2025, with Associate Justice Rodil Zalameda questioning the legality of the fund transfers.
During the hearings, concerns emerged about whether PhilHealth’s excess funds were appropriately segregated in the national treasury and if they were used exclusively for health purposes. Recto defended the government’s actions, emphasizing the legality and moral responsibility behind reallocating idle funds. “We cannot, in good conscience, allow funds to languish in bank accounts as our nation’s needs multiply daily,” he stressed.
Shortfall in People Investment
Beyond the PhilHealth funds issue, Representative Diokno questioned the government’s consistent underinvestment in social sectors such as education and social protection. He noted, “Based on the BESF tables, the proposed 2026 budget allocates just around 3.5 percent of GDP for education versus the 4 to 6 percent recommended by UNESCO.”
Diokno added, “Why does it seem like the government always under invests in people? We lack funds for education, health, and social protection compared to the standards of other countries.”
Budget Constraints and Prioritization
Budget Secretary Amenah Pangandaman explained that although the initial proposed budget for all agencies was P10.1 trillion, fiscal limitations required trimming allocations. She warned that meeting international standards for social spending could cause the budget to exceed available resources.
“If we were to add all the recommended increases, it would surpass our budget capacity,” Pangandaman said. She emphasized prioritizing programs aligned with the Philippine Development Plan, highlighting education as a key focus for the next year. “We tried to, at least, comply with the 4 percent needed for our basic education at tertiary education,” she added.
Concerns Over Flood Control Funding
Diokno also raised concerns about the P270 billion allocation for flood control in the National Expenditures Program, which faces scrutiny amid allegations of corruption. These issues add to the broader debate on government spending priorities and accountability.
For more news and updates on PhilHealth funds, visit Filipinokami.com.
