Awash with unused funds

There has been much hue and cry over the Philippine Health Insurance Corp. (PhilHealth)’s transfer of P89.9 billion back to the National Treasury and no amount of explanation or justification could get the attention and understanding of the public. The real issues and the hard facts have been messed up with half-truths, if not distorted presentation of data. 

“Use it or lose it,” the Department of Finance (DOF) invoked existing laws and fiats to get back the monies that are not being used for their intended purposes. After all, Finance Secretary Ralph Recto pointed to a lot of foreign-assisted programs (FAPs) and projects lined up for this year but remain in the pipeline waiting for peso counterpart funding from the Philippine government.

Recto thus issued on Feb. 27 DOF Order 003-2024 that provided the guidelines on how to comply with and implement the “special provision” of Republic Act (RA) 11975, or the General Appropriations Act (GAA) of 2024. But not before the DOF first sought the legal opinions of the Office of the Solicitor General, the Government Commission for Government-Owned and Controlled Corporations (GOCCs) or the GCG and the Commission on Audit (COA), Recto stressed.

During our Kapihan sa Manila Bay forum last Wednesday, Recto cited all three independent bodies upholding as legal the DOF’s invoking “special provision 3 (D), XLIII” to fully carry out the letter and spirit of RA 11975. So whether this “special provision” was inserted or not during the bicameral conference meeting of the 2024 budget, the law is the law. Covered by DOF Order 003 are, namely, all GOCCs like PhilHealth; government financial institutions (GFIs) under the supervision of the Bangko Sentral ng Pilipinas (BSP) and government instrumentalities with corporate powers like the Philippine Deposit Insurance Corp. (PDIC).

However, the strong push back against the DOF Order 003 rode on allegations that PhilHealth money is being diverted to “unprogrammed appropriations” where a lot of FAPs are in the long “wait-listed” items in the Congress-approved 2024 budget. The “unprogrammed appropriations” have been notoriously associated with “insertions” of the so-called “pork barrel” funds of lawmakers. But there is a Supreme Court ruling that declared unconstitutional and illegal the inclusion of “pork-barrel” funds in the annual budget. Our lawmakers though have since then found other ways to “park” them under “unprogrammed appropriations” in the GAA.

Recto admitted the P89.9 billion of unused national subsidies found lying idle at the PhilHealth was just the tip of the iceberg, so to speak. Recto disclosed bigger amounts of unused national subsidies were also discovered, like the P110 billion at the PDIC. 

“It’s our own people who pay for it (unused national subsidies) in terms of interest rates,” Recto pointed out. To date, Recto cited, the PhilHealth has returned P20 billion that was used to augment the P27 billion owed to the five million health care workers who served as the “frontliners” during the COVID-19 pandemic. 

As it turned out, the PhilHealth has amassed quite a sizeable amount of unused funds out of its annual allocations earmarked under RA 11223, or the Expanded Universal Health Care (UHC). The PhilHealth gets 50 percent of the national government’s yearly share from the Philippine Games and Amusement Corp. and 40 percent from the Philippine Charity Sweeptakes Office. In addition to these sources of funding, RA 11223 earmarked to the UHC “the incremental revenue collections of the government from RA 10351, or the ‘Sin Tax Reform Act’ that raised taxes on all cigarettes, tobacco, liquor and alcoholic products. 

“We must make money work for us,” the finance secretary declared pragmatically.

Although these laws were approved by the previous Congresses, a number of lawmakers have been among the loudest naysayers denouncing DOF Order 003. Tactlessly for them, Recto is either one of the principal authors or co-authors in all of these mentioned laws that the present 19th Congress and the past Congress approved. 

The 60-year-old Recto is a veteran lawmaker who criss-crossed the Senate and the House of Representatives as well as the executive branch of government in his career as a public servant. As the former congressman from Batangas, Recto was the House Deputy Speaker when President Ferdinand “Bongbong” Marcos Jr. recruited him to join the Cabinet in January this year.

According to Recto, the PhilHealth actuarial study showed that it has enough funding to pay member-benefits in the years ahead. After eight years since the UHC Law was passed, almost 100 percent of Filipinos, even non-paying ones, are now covered by PhilHealth funded by government subsidies, Recto noted.

The bleeding hearts for PhilHealth emotionally argue the fund transfer is taking away from the members’ monthly contributions in favor of greedy lawmakers. “That’s fake news,” Recto tersely quipped. On appeals to suspend the increase in the monthly premium contributions, Recto countered it would be preferable to increase coverage of medical benefits of members that the PhilHealth is now doing upon PBBM’s directives. 

Recto advised advocates of such moves to push the present Congress to amend the UHC Law. After all, it was the previous Congress that mandated the scheduled annual increase in members’ premium contribution from four to five percent starting January 2024. Recto could not agree more on the proposed bill to lighten premium contributions of members for a few years more that is now going through the deliberations in Congress. 

Incidentally, Recto sits as ex officio board member of the PhilHealth and 199 other GOCCs and GFIs. Deputy Treasurer Ed Marino sits as “alternate” of Recto on the PhilHealth board. For now, Recto suggested to the state insurer to simplify case rates and boost PhilHealth package benefits as previously promised by PBBM during his State of the Nation Address in Congress last month.

Instead of spending these public monies to better improve available public services, these GOCCs, GFIs, etc. have been awash with unused funds. But obviously, these public funds were invested in higher-yielding money market activities. So who have been earning a lot out of our people’s money?