Return excess funds to PhilHealth, says SC justice

MANILA, Philippines — Supreme Court Associate Justice Antonio Kho said the P60 billion in excess funds transferred from the Philippine Health Insurance Corp. (PhilHealth) to the National Treasury should be returned to the state insurance provider.

During the third round of oral arguments on the petition challenging the transfer of PhilHealth’s excess funds, Kho argued that if PhilHealth cannot utilize its funds, the money should instead be allocated to increase contributors’ benefits.

He also criticized the government’s allocation practices, emphasizing that if taxes collected for PhilHealth are not fully transmitted, the remaining balance should be released.

“We cannot close our eyes for the past years na hindi nabigay in benefits (We cannot close our eyes for the past years when benefits were not given),” Kho said after his interpolation.

“So in that case maybe PhilHealth can already request the president to return the money, the P60 billion that was transmitted to the government for unprogrammed funds, return that to PhilHealth. [For] PhilHealth to expand its benefits, hire more people to answer for the needs of the health of our people,” he added in a mix of English and Filipino. 

He also questioned whether PhilHealth considers the taxes allocated by Congress for subsidies when making its budget requests.

“So therefore, when you come up with your budget request for the subsidy, you don't actually consider the taxes being collected that Congress passed for purposes of subsidy for indirect contributors?” Kho asked during his interpellation with Health Assistant Secretary Albert Domingo. 

Domingo then responded with: “Your honor, budget principles require that it's needs-based. If we follow it based on the projected fund ceiling or availability, it might not match certain needs."

In response, Kho expressed concern that PhilHealth was restricting its funding, suggesting that the state insurer was arbitrarily setting limits without considering the subsidies allocated by Congress through collected taxes.

“Now, when you request money for subsidy, are you saying you won’t take that into account? Will you create your own formula? Because you have limited understanding, there's a limited need of our people for health,” Kho asked in a mix of English and Filipino. 

Financial stability and fund utilization. According to Domingo, despite the transfer of excess funds to the National Treasury, PhilHealth’s ability to provide benefits remains secure.

“Your Honor, if it pleases the court, Section 58, the sovereign guarantee, even without this maneuver of the P89.9 billion, the government can and always will increase the benefits,” Domingo said.  

The health assistant secretary cited Section 58 of the National Health Insurance Act, which ensures the financial viability of the National Health Insurance Program administered by PhilHealth.

Domingo also argued that the ongoing legal proceedings were crucial as they reinforced a "use-it-or-lose-it" principle, which is commonly applied to national government agencies to encourage fund utilization.

He emphasized that government-owned and controlled corporations such as PhilHealth do not operate under the same incentive.

“If the case is allowed to proceed, if the transfer is allowed to proceed, it is a use-it or lose-it signal, which all national government agencies have, so that we will use our funds. GOCCs like PhilHealth do not have that signal,” he said.

Next steps. The Supreme Court previously issued a restraining order on Oct. 29, 2024, halting the transfer of the remaining P29.9 billion in unused PhilHealth funds.

Earlier transfers included P20 billion on May 10, P10 billion on August 21, and P30 billion on October 16, prompting several individuals to file petitions challenging the legality of the fund transfers.

The oral arguments for the petitions will continue on April 29.