Department of Finance Secretary Ralph Recto defended the government’s transfer of excess funds from the Philippine Health Insurance Corp. (PhilHealth), describing it as legal, economically sound and a “moral duty.”
Recto told the Supreme Court during oral arguments that the move, mandated by Congress, was necessary to use idle funds for national development.
“We cannot, in good conscience, allow funds to languish in bank accounts as our nation’s needs multiply daily,” Recto said.
He said the funds would support the government’s Medium-Term Fiscal Framework, which aims to reduce the fiscal deficit from 8.6 percent of gross domestic product (GDP) in 2021 to 3.7 percent by 2028, and cut national debt from 60.9 percent of GDP in 2022 to 56.3 percent in 2028.
Recto said the transfer allowed the government to raise funds “without raising taxes and adding more borrowings.”
He also addressed concerns that the move harmed PhilHealth members, stating “not a single centavo” from member contributions was touched. The funds transferred were government subsidies, he said.
Recto dismissed claims PhilHealth was bankrupt, attributing confusion to “inaccurate and unreliable” Insurance Contract Liabilities (ICLs) flagged by the Commission on Audit (COA). He said ICLs were not actual debts but future obligation provisions based on flawed estimates.
He said PhilHealth, as a state health insurer, is backed by the government and cannot go bankrupt.
Recto noted PhilHealth’s “low absorptive capacity” and significant accumulated net income, which grew from P109.95 billion in 2019 to P464.27 billion in 2023. Even after transferring P60 billion , PhilHealth retains P498 billion, he said.
“To let billions sleep while our people suffer is not prudence—it is negligence,” Recto said.