Finance Secretary Ralph Recto defended the transfer of PHP 89.9 billion in excess funds from PhilHealth to the national treasury, asserting that it is legal, moral, and necessary to address the growing needs of the nation, while ensuring that no member contributions were affected. He clarified that PhilHealth remains financially healthy, with significant net income growth and sufficient funds to continue enhancing healthcare services for Filipinos.
Finance Secretary Ralph Recto emphasized the legality, morality, and economic sensibility of redirecting excess funds from the Philippine Health Insurance Corporation (PhilHealth) during a recent Supreme Court hearing. He addressed concerns surrounding the transfer of PHP 89.9 billion in unused funds to the national treasury, stating, “We cannot, in good conscience, allow funds to languish in bank accounts as our nation’s needs multiply daily.”
Recto reinforced that the policy’s legality has been confirmed by several authoritative bodies, including the Office of the Solicitor General and the Commission on Audit (COA), and was also approved by the PhilHealth Board. He clarified that no contributions from PhilHealth members were affected. Of the PHP 60 billion remitted, 78 percent has been utilized for essential health projects, including paying healthcare frontliners, building hospitals, and providing medicines to the needy. He characterized the use of these funds as an exercise in fiscal justice.
Furthermore, Recto addressed misconceptions about PhilHealth’s financial health, particularly surrounding its Insurance Contract Liabilities (ICLs), which had been labeled by the COA as inaccurate. He clarified that these liabilities are not true debts but provisions for future obligations based on flawed actuarial estimates. For years, PhilHealth has generated higher revenues than expenditures, and much of its funds were underutilized due to a low absorptive capacity of about 58 percent.
Since 2019, PhilHealth’s accumulated net income has quadrupled, growing from PHP109.95 billion to PHP464.27 billion in 2023, while average benefit claims expenses remained around PHP140 billion. Despite the PHP 60 billion remittance, PhilHealth retains PHP498 billion as of 2024, ample for enhancing various health benefit packages over the next two years. Recto concluded that allowing funds to remain idle while the public suffers is not prudence but negligence.
