“We often measure leadership by what leaders say. Perhaps it is time to measure it also by what leaders repair”
EXECUTIVE Secretary Ralph Recto now finds himself having to answer allegations of wrongdoing during his previous stint at the Department of Finance after the Supreme Court struck down his move as Finance Secretary to transfer P60 billion of PhilHealth funds to the national treasury.
But what’s the real story here?
The transfer of PhilHealth funds to the national treasury was legal as the 2024 General Appropriations Act (GAA) authorized it through a special provision allowing excess or idle funds from government-owned and controlled corporations (GOCCs), including PhilHealth, to be remitted to the national treasury to finance “unprogrammed appropriations.”
In hearings before a Senate committee, Recto said the DOF consulted with the relevant legal offices—the Office of the Government Corporate Counsel (OGCC) and the Commission on Audit (COA)—and obtained favorable legal opinions before proceeding with the transfer.
Recto and the DOF argued that the transferred funds were not guaranteed benefit or reserve funds belonging to members’ contributions.
Rather, these were unused portions of government subsidies (e.g., for “indirect contributors”) or idle funds that were not currently being used by PhilHealth.
The DOF said leaving huge amounts “sleeping” in accounts—while many urgent needs exist (especially after the pandemic)—was wasteful.
Therefore, redirecting “idle savings” to urgent national programs was a way to maximize resources.
Recto called the transfer a “common-sense approach” during a time of economic strain (after the COVID-19 pandemic).
He pointed out that the government inherited large debts and rising debt-to-GDP ratio, and that using idle funds helps avoid new borrowing or raising taxes.
According to him, every “idle peso” not used was a “disservice to every Filipino.”
The DOF explained that the move was part of efforts to maximize existing public resources (“mobilized and utilized”) for the greatest benefit, in line with the government’s medium-term fiscal framework.
Recto said the transfer did not affect PhilHealth’s services or mandate.
In fact, he said, it coincided with what he described as the “largest expansion of benefit packages” and implementation of a “zero-balance billing policy” in public hospitals under the Department of Health.
The reasoning was that the transferred funds came from surplus or excess—not from membership contributions, hence no danger to insured members’ benefits.
Recto framed the transfer not only as legal and economical, but also as a moral imperative.
He argued that it would be irresponsible to hoard money in PhilHealth’s coffers while many Filipinos suffer hardship, especially in the context of pandemic recovery and broader social needs.
In his own words, idle funds “serve no one.”
What the fund transfer achieved is important.
For the first time in years, government was able to settle billions worth of unpaid Health Emergency Allowances—obligations inherited from a pandemic-era backlog.
These benefits gave justice to health workers who had waited far too long, and whose sacrifices cannot be repaid merely with a thank-you.
This is the part critics often omit. It is easy to attack a process; harder to acknowledge the people it helped.
As then Finance Secretary, Recto chose responsibility over rhetoric.
He acted not to diminish PhilHealth, but to strengthen the national capacity to deliver on urgent obligations.
And even before any controversy erupted, President Marcos Jr. had already directed the restoration of the P60 billion to PhilHealth, underscoring full support to universal healthcare and reaffirming trust in institutional safeguards.
The Supreme Court has now spoken, and its ruling will reshape future fiscal tools.
But the response of the national government has been exemplary: respect for the Court, commitment to compliance, and assurance that public funds will always serve public interest.
We often measure leadership by what leaders say. Perhaps it is time to measure it also by what leaders repair.
In this case, the DOF repaired trust, restored obligations, and reinforced the public health system—quietly, lawfully, and in service of the Filipino.
(Email: ernhil@yahoo.com)
