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Dec 9, 2025
SC orders return of P60B excess funds to Philhealth
Sun.Star Network Online
THE Supreme Court (SC) has ordered the National Government to return billions of pesos in excess funds taken from the state health insurer, a decision the executive branch says it will respect.
The high tribunal voided a 2024 budget provision and a finance department circular that authorized the transfer of P89.9 billion from Philhealth to the National Treasury. While Malacañang maintains the initial transfer was a legal attempt to use idle funds for public programs, it has pledged to abide by the directive to return the P60 billion already transferred.
Why does this ruling matter for the integrity of public health funds?
Violation of health care laws. The conflict centers on whether the government can use Philhealth's savings for non-health projects. The court found that transferring these funds violated the Universal Health Care Act (UHCA). Under Section 11 of the law, Philhealth is required to maintain a reserve fund equivalent to two years of projected expenses. The law strictly prohibits transferring any portion of this reserve or its income to the National Government.
Mandate for excess funds. Instead of moving money to the treasury, the law dictates specific uses for any surplus. The high tribunal clarified that the purpose of these funds is to improve coverage for citizens, not to fund unprogrammed government appropriations.
"If the reserve funds exceed the ceiling, the excess must be used to increase benefits under the National Health Insurance Program (NHIP) and reduce members' contributions. Section 11 also expressly provides that no portion of the reserve fund or its income may be transferred to the National Government or any of its agencies," the SC said.
Government justification for transfer. Executive Secretary Ralph Recto said the administration merely complied with a congressional mandate in the 2024 General Appropriations Act. The intent was to utilize "sleeping" funds from government corporations to avoid new taxes or additional borrowing. R
