FINANCE Secretary Ralph Recto yesterday said there was a lot of money “sleeping” in the Philippine Health Insurance Corp. (PhilHealth) amid the agency’s low absorptive capacity, which he said was only about 58 percent.
“It is clear and obvious that if PhilHealth were managing its funds correctly and efficiently, the government would not be requesting the return of any of its excess funds. Because such would not exist in the first place,” Recto said yesterday during oral arguments on consolidated petitions challenging the constitutionality of the transfer of idle funds of the state insurer to the Treasury.
Recto was referring to the P89.9 billion idle funds which was ordered remitted back to the national government, of which only P60 billion has actually been remitted to the National Treasury, as the Supreme Court issued a temporary restraining order late last year against the transfer of the remaining dormant funds of P29.9 billion.
Recto said that even after remitting its excess government subsidies, implementing approved increases in benefit packages and operating without government subsidy this year, PhilHealth is still sitting on nearly half a trillion pesos in cash.
“Even as we took P60 billion out of the P89.9 billion excess government subsidies, PhilHealth is still left with P498 billion of cash in its war chest as of last year,” Recto said.
“This is more than enough to continue increasing its inpatient, outpatient and special benefit packages over the next two years. And even without subsidy from the government, PhilHealth is still on a strong financial footing,” he added.
‘USE IT OR LOSE IT’
Recto said PhilHealth’s accumulated net income has grown more than four times since 2019, from P109.95 billion to P464.27 billion in 2023 while its average benefit claims expenses only amounted to an average of P140 billion.
“This just follows the same principle applied to all government agencies: use your budget or lose it. Any unspent funds revert back to the National Treasury. So, if PhilHealth can demonstrate improved absorptive capacity, surely, the government will not think twice about providing budgetary support for them,” Recto said.
“What, then, should we do with these unutilized funds? If we had not looked into PhilHealth’s excess funds, they would likely still be sitting idle to this day. To let billions sleep while our people suffer is not prudence — it is negligence,” he added.
Recto said the P60 billion remitted by PhilHealth went directly to critical health-related projects.
“When the P60 billion was returned, the government did not turn its back on its mandate to prioritize public health; we fulfilled it,” he said.
According to the DOF, the largest chunk worth P27.45 billion was used to settle the Public Health Emergency Benefits and Allowances for Health Care and Non-Healthcare Workers who served and risked their lives during the COVID-19 pandemic.
Meanwhile, P10 billion was used for Medical Assistance to Indigent and Financially Incapacitated Patients while P4.1 billion financed the procurement of various medical equipment for hospitals of the Department of Health (DOH) and local government units, and for primary care facilities.
About P3.37 billion funded the construction of three DOH health facilities, while P1.69 billion went to the Health Facilities Enhancement Program.
“The rest, or about P13 billion, were used to fund government counterpart financing for foreign-assisted infrastructure and “social determinants for health” projects. These will accelerate the delivery of healthcare services to remote areas and enhance the health and well-being of Filipinos by ensuring food security,” Recto said.
“The P60 billion that was returned didn’t vanish — it paid frontliners, built hospitals and gave the poor access to medicine. Every centavo remitted was converted into service,” he added.
DONE BEFORE
Former Finance chief Margarito Teves on Wednesday said during the oral arguments reallocating idle funds is nothing new.
Teves, who appeared as one of the “amici curiae,” or friends of court, told the magistrates that similar fund transfers were made by past administrations to address fiscal crises.
“In the case of President Ramos, it was done during the time when the Philippines and Asia were actually confronted with the Asian financial crisis. I recall he said, ‘Let’s try to get all the balances from different institutions that are now in the different banks and utilize this to address the crisis,” Teves told Associate Justice Ricardo Rosario when he was asked if this had been done in the past.
According to Teves, the Ramos administration was able to address the fiscal challenge and even recorded a surplus following the reallocation of idle funds.
The Arroyo administration, under which Teves served as finance secretary, did the same thing. Teves said the Arroyo government recognized that “special funds tend to have a tendency to increase” and that “there probably should be a way of making use of these funds if they’re not utilized.”
Under the Duterte administration, Teves said, government balances were reallocated as part of the response to the COVID-19 pandemic. – With Ashzel Hachero
