Supreme Court issues TRO vs PhilHealth fund transfer

The Supreme Court (SC) issued on Tuesday a temporary restraining order (TRO) on the further transfer of excess funds of Philippine Health Insurance Corp. (PhilHealth) to the National Treasury.

“The TRO is effective immediately,” SC Spokesperson Camille Sue Mae L. Ting said. “The TRO is just really to prevent the further transfer of more funds from PhilHealth to the National Treasury.”

The SC consolidated the petitions filed by 1SAMBAYAN Coalition, a group led by Senator Aquilino Martin “Koko” D. Pimentel III and another group led by Bayan Muna Chairman Neri J. Colmenares.

The three petitions were filed to stop the transfer of PHP 89.9 billion in excess funds from PhilHealth to the National Treasury.

“All three petitions challenge the return of excess reserve funds from government-owned and -controlled corporations to the National Treasury to fund unprogrammed appropriations,” the SC public information office said in a statement.

The TRO was issued after P60 billion in PhilHealth funds have already been transferred to the Treasury in three tranches since May.

A fourth and final tranche worth PHP 29.9 billion was scheduled to be transferred to the Treasury in November.

Ms. Ting said it is still possible for the High Court to tackle the plea for a status quo ante order, which could allow the return of the PHP 60 billion to PhilHealth’s coffers.

The oral arguments scheduled for Jan. 14, 2025, would push through, she added.

A copy of the TRO had yet to be released.

In a statement, Finance Secretary Ralph G. Recto said the department “respects the Supreme Court’s intervention.”

“I recognize the right of every citizen to seek redress from the courts. Rest assured that the DoF (Department of Finance) will fully comply with the order of the Supreme Court,” he said.

“We give our full cooperation to the Supreme Court as we look forward to the opportunity to shed light on the issues presented during the oral arguments.”

A provision included in the 2024 General Appropriations Act allowed the DoF to issue Circular No. 003-2024, authorizing PhilHealth and the Philippine Deposit Insurance Corp. to transfer PHP 89.9 billion and PHP 110 billion, respectively.

These would help fund unprogrammed appropriations worth PHP 203.1 billion, which would support government programs in health, infrastructure and social services.

“We reiterate that before proceeding with the utilization of GOCC (government-owned or -controlled corporation) idle funds, our agency exercised due diligence and consulted extensively with the government’s legal experts,” Mr. Recto said.

“These include the Governance Commission for GOCCs, the Government Corporate Counsel and the Commission on Audit. These efforts were undertaken to ensure full compliance with our laws,” he added.

In a statement, PhilHealth said it fully respects and will abide by the ruling.

PhilHealth said it remains focused on its mission to provide healthcare to Filipinos through “better and responsive benefit packages and availment policies that ensure greater access to healthcare services.”

Solicitor-General Menardo I. Guevarra, whose office represents government agencies in legal cases, said they would “respect the TRO,” noting that it is “limited to PhilHealth funds only.”

One of the petitioners, former SC Senior Associate Justice Antonio T. Carpio, said the TRO “saves the poorest of the poor of Filipinos… whose only source of life-saving medicine is PhilHealth.”

“We hope that the Executive branch will return all the transferred funds back to PhilHealth pending the final decision of the Supreme Court,” he said in a Viber group chat message with reporters.

Mr. Carpio, along with 1SAMBAYAN, said in their petition that since PhilHealth funds are “special funds,” they cannot be transferred unless their purpose has been abandoned or accomplished.

They added that the fund transfers violated Article VI, Section 25 (5) of the Constitution. Under the Charter, “no law shall be passed authorizing any transfer of appropriations.”

Former Finance Undersecretary Cielo D. Magno, who filed the first petition questioning the transfer with Mr. Pimentel, said they are hoping the top court would declare the fund transfer as unconstitutional.

“This measure will temporarily stop the financial hemorrhage of PhilHealth,” she told BusinessWorld in a Viber message. – Chloe Mari A. Hufana, Reporter