SC justice questions transfer of PhilHealth funds to fully funded programs

An associate justice of the Supreme Court (SC) on Tuesday questioned the urgency in transferring the excess funds of the Philippine Health Insurance Corporation (PhilHealth) to the national treasury for programs that are already funded.

Justice Amy Lazaro-Javier posed this question during the resumption of the oral arguments on petitions seeking to block the transfer of the P89.9 billion PhilHealth funds to the national treasury.

“It is a fact that money was taken, billions, in fact P89 billion. Although a little was restrained by the government, by the SC. So that’s the fact that billions of pesos were taken from the reserved funds of PhilHealth," she said.

“For the construction of a bridge that has not even started and that has been funded many times over? And a right of way that is already funded… by billions, and maintenance of roads that is already funded by billions under the GAA?” she added.

She was referring to the SC issued a temporary restraining order (TRO) issued in October against the further transfer of the PhilHealth funds to the national treasury.

Lazaro-Javier cited the PGN Island Bridges project, which she said appears to be fully funded by the Export-Import Bank of Korea in the amount of P174 billion.

She said the same project received additional funding in 2022 and 2023.

Solicitor General Menardo Guevarra, who represents the respondent government agencies in the petition, said they will check the projects.

He also said there are numerous projects under the unprogrammed appropriations.

“The urgency is on the use of these available funds for all the projects listed under the unprogrammed appropriations. There are so many of them,” he said.

Guevarra also said most of the funds for the unprogrammed appropriations would go to social projects, including health projects such as the regional hospitals of the Health Department.

He said the first payment out of the unprogrammed appropriations went to the payment of health emergency allowances of nurses and other medical workers.

Lazaro-Javier, however, maintained there was an overlap between the general purpose and special purpose for unprogrammed funds.

Meanwhile, Guevarra said he cannot determine whether a certain appropriation is proper or improper.

“We, I believe, will not be in the position to say that a certain appropriation is right or wrong or proper or improper. We have to rely on the wisdom of the people who represent us,” he said.

Overstated assets

Lazaro-Javier also questioned PhilHealth for overstating its assets, citing PhilHealth’s 2021 financial statement to the Commission on Audit (COA).

She said the financial statement submitted by PhilHealth indicated total assets in the amount of P347.4 billion, its total liabilities at P1.16 trillion, while its total equity was at P816 billion.

However, she said the COA issued an adverse opinion that stated that the financial statements do not fairly present the financial position of PhilHealth.

The COA report stated: “The accounting errors in the recognition and measurement of Investment in Bonds and Accrued Interest Receivable resulted in the overstatement of Investment in Bonds, Accrued Interest Income, and Interest Income accounts by P26.429 million, P2.702 million, and P7.202 million, respectively.”

“In short, PhilHealth, apart from mistating its liabilities, also overstated its assets. Therefore, if the actual total assets are significantly less than what has been reported, the negative equity of PhilHealth is more than P816 billion,” Lazaro-Javier said.

Atty. Solomon Hermosura, the counsel for PhilHealth, said that PhilHealth appears to have more liabilities due to its provision for insurance contract liabilities, which was at P1.1 trillion as of December 2023.

“Now, you will note that this is a provision for liabilities, your honor. It is not a statement for liabilities. It is just a provision. So this is especially true for insolvency purposes,” Hermosura said.

The oral arguments on the transfer of PhilHealth funds will be on March 5, 2025. — BAP, GMA Integrated News