By Ding I. Generoso
THERE is a raging debate on whether the funds given by the national government to PhilHealth–if they are unused–may be taken back by the government and returned to the National Treasury.
Finance Secretary Ralph Recto argues that based on the General Appropriations Act, unused or excess funds of all government-owned and controlled corporations or GOCCs–PhilHealth included–must be returned to the National Treasury.
Sen. Win Gatchalian says that he will scrutinize the proposed 2025 budget of PhilHealth and ask why a subsidy should be given when PhilHealth has not fully spent this year’s and last year’s subsidies.
Sen. Aquilino Pimentel III does not wish to argue in the Senate and instead filed a case before the Supreme Court, seeking to stop the transfer, and for the Treasury to return whatever funds PhilHealth has already remitted.
This issue began when Recto ordered PhilHealth to return P89.9 billion in “unused funds”, which he said could be used to finance “unfunded programs” in the 2024 GAA.
Sans a scintilla of a whimper, much less an ounce of protest, PhilHealth president Emmanuel Ledesma Jr. simply bowed to Recto’s command, stressing that PhilHealth will simply obey what the SC says. Said Ledesma: “I’m just echoing what [Recto] keeps mentioning, if there’s a TRO or if the Supreme Court asks us to do otherwise, we, of course, will abide.”
Of the P89.9 billion Recto ordered to be returned, Ledesma remitted P20 billion in May and P10 billion on August 21. The rest will be remitted in October and November unless the SC issues a TRO.
There is absolutely no basis for debate, no reason for Pimentel to go to the SC and waste valuable time and resources of the government if only–and only if –Recto, Ledesma and Gatchalian bothered to read and understand the PhilHealth law, Republic Act 7875, as amended by RA 10606 and RA 11223.
Recto argues that the national government is giving subsidies to PhilHealth as a GOCC, in the same way that the government subsidizes, say, the National Food Authority or the National Power Corporation.
But it is not. And PhilHealth is not like any other GOCC except the Government Service Insurance System, Social Security System and Home Development Mutual Fund.
Just like the GSIS, SSS and HDMF or the Pag-Ibig Fund, PhilHealth is a government-controlled corporation but not government-owned. These four corporations are owned by the members who contribute money to their respective funds. And as the SC has ruled, these funds are not public or government funds; they are private funds imbued with public interest.
And these funds, according to the charters of these four corporations, are earmarked for specific uses and purposes. As such they cannot be used for purposes other than those enumerated in their charters.
That’s why the funds of GSIS and SSS cannot be used to fund Maharlika without violating the charters of GSIS and SSS.
And that is why, no matter what Rector says, and no matter what the GAA says about GOCCs being mandated to turn over unused funds to the Treasury, not one peso of PhilHealth fund can be used to finance unfunded programs in the GAA.
Here’s why.
The PhilHealth law classifies its members into two: direct contributors and indirect contributors.
Direct contributors are those who are gainfully employed (whether in the government or the private sector), self-employed, professionals who derive income from the exercise of their profession, and migrant workers who are volunteer members. They pay for their premium contributions, although in the case of those employed, their employers have a corresponding share.
Indirect contributors are those who cannot afford to pay (or who are not required to pay) the premium contributions–the indigents and senior citizens who are deemed permanent non-paying members.
The law requires that, in their case, the government (national and local) shall “subsidize” their premium contributions. The law also provides that the “premium subsidy” shall be “gradually adjusted and included” in the GAA, every increase in premium contribution, whether by direct or indirect contributors, shall be used by PhilHealth for a corresponding increase in benefits.
The question is: what do we make of the “premium subsidy”? Me says that because they are payments for premiums, the “public” nature of the funds used to pay them automatically dissolves the moment the fund is remitted to PhilHealth.
This is what happens when the Department of Budget releases to the GSIS the premium contributions of all government employees. This is what happens when a company releases to the SSS its share of contributions.
Ownership of the fund changes. Ownership is transferred to the members to which the fund has been contributed. Like when you donate to a charitable institution, the money that you donated is no longer yours; it becomes owned by the charity institution.
That being the case, the government loses any and all rights to the fund. Only PhilHealth members, whether direct or indirect contributors have the right to the fund, be they “excess” or “unused” or what.
Plus, note this. The same PhilHealth law prescribes the manner any excess funds are to be used in the following manner:
First, to be put in “reserve funds” to make sure it can meet future obligations (read, benefits)–up to two years of “actuarial” projections;
Second, after the reserve funds are set, to increase the program benefits and decrease the members’ contributions;
Third, if there still is excess, to be placed in investments to earn income (this is the PhilHealth Investment Reserve Fund).
Nowhere does it say that any excess funds may or shall be returned to the National treasury.
But Recto argues that the GAA mandates that excess GOCC funds shall be returned to the Treasury.
Ah, Secretary, you should have read pertinent Supreme Court decisions.
As far back as 1948, and in many decisions throughout our history as a Republic, the SC has ruled that “a special law prevails over a general law;” and that “a special law is not regarded as having been amended or repealed by a general law unless the intent to alter or repeal is manifest.”
The PhilHealth law is special. The GAA is a general law.
Sec. Recto, don’t touch PhilHealth money. It doesn’t belong to you or the government.
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Conrado I. Generoso is a seasoned expert in media and communications, political campaigns and consulting, advocacy and public-policy development. His experience in media spans four decades in various capacities as a reporter, editor and columnist, as well as public relations and advertising executive.
