Government corporate counsel Solomon Hermosura defended the Philippine Health Insurance Corp.’s (PhilHealth) transfer of its excess funds to the National Treasury, arguing that it was lawful and does not impair the constitutional right to health.
Hermosura said the petitions against the fund transfer should be dismissed by the Supreme Court.
“PhilHealth’s remittance of its fund balance to the National Treasury, in compliance with Department of Finance Circular 003-2024, is lawful,” Hermosura said in his opening statement at the oral arguments at the Supreme Court on Feb. 4, 2025.
“It is lawful because, contrary to the claims of petitioners, the fund balance is not part of PhilHealth’s reserve fund. And the funds of PhilHealth, including that part sourced from sin taxes, are not a special fund under the Constitution,” he said.
Hermosura said PhilHealth’s return of fund balance “does not impair the constitutional right to health,” noting that despite remitting P60 billion in excess funds last year, the agency’s operating budget for 2025 increased to P284 billion or P25 billion more than its 2024 budget.
“The operating budget of PhilHealth has increased by 58 percent during this administration from the 2022 budget of P166.5 billion. While advancing universal healthcare, PhilHealth observes fiscal accountability and good governance as an essential prerequisite for our national development,” he said.
“PhilHealth’s board and management are doubling their efforts to advance universal health coverage. In 2024, PhilHealth increased the all case rates package by at least 95 percent. PhilHealth also approved and implemented massive enhancements in outpatient packages for chronic conditions to offer greater coverage for critical and life-saving treatments,” he said.
Special Provision 1(d) of the General Appropriations Act (GAA) of 2024 authorizes the utilization of government-owned and -controlled corporations (GOCC) fund balances to finance key programs in health, social services, and infrastructure under the Unprogrammed Appropriations. It mandates the DOF to implement this provision, which led to the issuance of clear guidelines through DOF Circular No. 003-2024.
Solicitor General Menardo Guevarra also defended before the Supreme Court the legality and necessity of Special Provision 1(d) of the General Appropriations Act (GAA) of 2024 and the Department of Finance (DOF) Circular implementing it, describing the move as a temporary and common sense approach within legal bounds to finance critical government programs for Filipinos.
“The money needed to provide these essential services does not come easy in our side of the world. But as they say, scarcity breeds creativity––and oftentimes, creative and innovative solutions are borne out of something as common as common sense,” the Guevarra said in his opening statement at the oral arguments.
Guevarra pointed out the wisdom behind the special provision and the DOF circular, emphasizing that these were the Executive and Legislative departments’ way of creating and implementing a fiscal policy to boost economic growth without bloating the government’s indebtedness or burdening the people with new tax measures. It does not violate any law, much less the Constitution in any way, he said.
“It might have been less complicated if the national government simply borrowed money. But then, we must consider that, as of the end of February 2024, the national government debt was already recorded at P15.8 trillion,” he said.
“[O]ur government will not be acting with common sense if it shelved other much-needed projects because one pocket is short on funds, while knowing fully that there is abundance in the other. Using the petitioners’ own words, there can be no greater act of “negative social justice” and “disservice to Filipinos” if that were to be the case,” he said.
