SC Justice questions SolGen about Recto’s fund juggling
Ralph Recto is at the core of our PhilHealth’s P90-billion anomaly.
He was deputy speaker in December 2023, when Congress enacted the 2024 national budget. He became Secretary of Finance in January 2024 to enforce that budget.
That 2024 budget was irregular. It funded through political “ayuda” under Programmed Appropriations a surprise People’s Initiative for Charter Change.
To accommodate that maneuver, the 2024 budget relegated to Unprogrammed Appropriations certain projects for which loans or foreign aid had already been secured.
Examples: From Korea, the Panay-Guimaras-Negros Island bridges project. From various donors, the Management and Supervision of Comprehensive Peace Process.
Using up Programmed Appropriations for political ambition, government fell short of Unprogrammed Appropriations.
Recto bridged the fund gap in February 2024 via DOF Circular No. 003. He siphoned to the Bureau of Treasury all “fund balances” of government-owned and -controlled corporations.
Recto was the bridge between Congress and Malacañang – the collusion of the two political branches.
GOCCs include Philippine Deposit Insurance Corp., SSS, GSIS, Pag-IBIG and PhilHealth. As Finance secretary, Recto or his rep sits in GOCC boards.
PhilHealth president Emmanuel Ledesma, a Malacañang appointee like Recto, let go of our P90 billion.
Two cases were filed with the Supreme Court for unconstitutionality of the 2024 budget. And another three against the unlawful P90-billion transfer from PhilHealth.
Recto kept silent Tuesday at the SC’s second oral arguments on the PhilHealth cases.
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Justice Amy Lazaro-Javier (JALJ) questioned the transfer of PhilHealth’s P90 billion, among others, to the Panay-Guimaras-Negros (PGN) bridge work and the peace process.
Defending the government including Recto, Solicitor General Menardo Guevarra (SGMG) kept invoking “wisdom of our Congress.”
Excerpts:
JALJ: According to DOF, funds to be remitted to Treasury will finance urgent national projects. Annex A of your compliance, Nov. 8, 2024, pages 1-4, OSG enumerated some of these projects: routine maintenance of national roads, PGN bridges and right-of-way payments. All are construction projects, Mr. Solicitor General, correct?
SGMG: Not all of them, Your Honor. Some pertain to health projects.
JALJ: No, I’m talking about routine maintenance of national roads, PGN bridges and right-of-way payments.
SGMG: In a sense they are routinary, ordinary expenses.
JALJ: They pertain to construction projects, correct?
SGMG: Infrastructure, yes.
JALJ: Per DBM’s Budget of Expenditures and Source of Financing FY 2024 report, PGN bridges are fully funded by Export-Import Bank of Korea, P174.49 billion-plus. Was there an urgency to transfer PhilHealth funds when the project is already fully funded?
SGMG: Your Honor, this is a matter really of delving into the wisdom of the legislature in allocating funds.
JALJ: Korea EXIM Bank already has loaned the Philippines P174.49 billion-plus. Was there urgency to transfer PhilHealth funds when the project is already fully funded?
SGMG: I think one consideration by Congress in doing so is a determination of when a project is already implementable. If a project that has been identified and sufficiently funded is considered non-implementable for the given fiscal year, then I think it is the decision of Congress in the exercise of its policy or wisdom, so to speak, to move it to unprogrammed appropriations in the meantime.
JALJ: Has government moved this Korea EXIM bank loan to unprogrammed funds?
SGMG: We have to check that, whether that has been actually transferred or removed altogether, because there were certain removals made by Congress in the proposed infrastructure or other projects.
JALJ: How can government have removed this when it is a loan specifically for that purpose?
SGMG: It is something that can be deferred, Your Honor, even if funded.
JALJ: What is the reason for deferring it?
SGMG: Your Honor, I cannot speculate on the reasons of the congressman.
JALJ: Has government spent even a single cent from that loan, considering that the project has not even started?
SGMG: Well, there is nothing to spend for if the project has not started.
JALJ: So where is the money?
SGMG: The money went presumably to Treasury – for projects under Unprogrammed Appropriations.
JALJ: So, we have unused funds for the project, and yet we still got money from PhilHealth to supplement this fund that has been unused for years?
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Last December 2024, Congress again transferred to 2025 Unprogrammed Appropriations certain projects for which foreign loans already have been released.
Examples, rights-of-way government counterparts for the Japan-funded Metro Manila Subway and the North Luzon Railway. From ADB, the North-South Commuter Rail. From China, South Luzon Railway.
That left DOTr no rails project to implement this year. Undersecretary for rails Jeremy Regino resigned this month, followed by Sec. Jaime Bautista.
Pantawid Pamilyang Pilipino Program is funded by Republic Act, just like PhilHealth is funded by sin taxes under the Universal Health Care Act. Yet 4Ps is now also in Unprogrammed Appropriations, having given way to political “ayudas” AKAP, TUPAD and AICS in the 2025 Programmed Appropriations.
Expect more anomalous fund transfers, and departures of self-respecting bureaucrats.
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