By TONY LOPEZ
On Dec. 5, 2025, the Supreme Court announced that by a unanimous decision, it has ordered the Department of Finance (DOF) to return asap the P60 billion Ralph Recto dragooned from the benefits fund of PhilHealth, the state health insurance company.
The high court, by a majority vote, also ruled as a grave of abuse of discretion, amounting to a lack of, or an excess of, jurisdiction, the 2024 General Appropriations Act provision and a DOF (Recto’s) circular 003-2024 which directed the transfer of P89.9 billion to the national treasury, representing the fund balance or excess reserve funds of the PhilHealth.
In compliance with 003-2024, the PhilHealth had remitted P60 billion to the national treasury in three tranches. The SC issued a temporary restraining order (TRO) against the transfer of the remaining P29.9-billion PhilHealth funds and the further implementation of Special Provision 1(d) of the 2024 GAA and DOF Circular No. 003-2024.
Unconstitutional provision
The SC struck down Special Provision 1(d) of the 2024 GAA for being a rider – a provision not germane or related to the bill’s purpose. The Constitution requires all provisions of the GAA to be germane to its purpose to prevent surprise or fraud upon the legislature and to fairly inform the people of the bills’ subject.
DOF’s transfer authority or order promotes fraud or robbery. It has enabled senators, congressmen, other government officials and contractors to steal the money supposed to fund projects covered by unprogrammed appropriations.
The year 2024 was the peak of power of the now legendary (for corruption) Bicol party-list congressman Elizaldy Co, as chair of the powerful House appropriations committee. Zaldy Co is the poster boy of corruption who made “Congress” the synonym for “large-scale larceny” – the loss of more than P1 trillion in taxpayers’ money disguised as flood control funds.
It turns out included in the P1 trillion were monies of government-owned or -controlled corporations (GOCCs); specifically, the P60 billion of PhilHealth.
Then finance secretary now Executive Secretary Ralph Recto had argued that the funds and equity of GOCCs are tax monies and therefore, the administration can temporarily “borrow” them, without paying interest, to cover deficits in the GAA.
Identified as “excess funds,” these monies total P560.8 billion from eight government corporations – PhilHealth P203.5 billion, PDIC P184 billion, Philippine Ports Authority P131 billion, Philippine Reclamation Authority P13.2 billion, SPDA P11.2 billion, PNCC P8.8 billion, TransCo P4.3 billion and Cebu Ports Authority, P2.9 billion.
Recto did not want to resort to additional borrowings as the debt-to-GDP ratio, a measure of a government’s fiscal responsibility or reckless, meaningless spending, was reaching 63% of GDP or the value of economic output for the year. Government debt is a record P17.56 trillion, and rising.
Also in 2024, the government sustained a budget deficit of P1.484.3 trillion, or 5.6% of GDP, indicating lack of fiscal discipline and inability to finance growth targets.
The bank lending rate is 5%. So 5% of P560.8 billion is P28 billion. That is the national government’s savings if it “borrowed,” for free, the P560.8-billion GOCC money.
For PhilHealth, however, the P60 billion taken by the DOF are reserve funds. By law, under the Universal Health Care Act, PhilHealth must maintain reserve funds equivalent to twice its programmed expenses. Using the P60 billion for purposes other than health care, explained the SC, “ultimately violate(s) the people’s right to health and to an affordable, sustainable and accessible public health insurance.”
Such a policy could be fatal. If PhilHealth cannot pay the health expenditures of a dying patient for lack of funds, the patient dies.
Kidnapping PhilHealth funds amounts to double holdup or double robbery. PhilHealth first was robbed by DOF, of its P60 billion. And when the P60 billion became part of the GAA, the money was stolen by corrupt senators, congressmen, contractors and DPWH engineers.
In such cases, when the robber tries to escape, shouldn’t you shoot him? Well, the Supreme Court was rather kind in its language.
Affordable health care
First, the SC declared “while the State may adopt measures to improve the economy, such measures must not contravene what the Constitution itself guarantees: affordable health care for all Filipinos, especially the underprivileged.”
Second, the SC ruled that the finance secretary cannot, in any capacity, augment any item in the GAA because this power belongs to the President.
No grave abuse of discretion
After stating those two points, the SC then ruled: “The President did not commit grave abuse of discretion when he certified as urgent House Bill No. 8980, now the 2024 GAA, which dispensed with the requirement of reading on three separate days and the printing and distribution of copies in advance. Except in cases of grave abuse of discretion, the authority to decide whether a certification of urgency is valid rests solely with Congress. In this case, Congress approved the President’s certification to expedite the passage of the bill.”
The SC also exculpated then finance chief Recto. It denied the petitioners’ request to determine the liability of the DOF secretary for technical malversation and/or plunder, ruling that such matters are improper for resolution in this case. The only issue properly before it is the validity of the issuances and whether they were issued with grave abuse of discretion amounting to a lack or excess of jurisdiction. The justices who submitted their respective separate opinions also noted that no criminal liability can attach to the finance secretary, who they found “to have acted in good faith in implementing Special Provision 1(d).”
The SC’s unanimous decision announced Dec. 5 ruled on three cases: 1) G.R. No. 274778, Aquilino Pimentel III et al. v. House of Representatives et al; 2) G.R. No. 275405, Bayan Muna chairman Neri Colmenares et al. v. Executive Secretary Lucas P. Bersamin et al; and 3) G.R. No. 276233, 1Sambayan Coalition et al. v. House of Representatives et al.
— The Philippine Star, Dec. 9, 2025