Petitioners' Statement on the Supreme Court Ruling on the Philhealth Fund Transfer

We, the petitioners of GR No. 274778, thank the Supreme Court for ruling that Special Provision 1(d), Chapter XLIII of the 2024 General Appropriations Act (GAA), and the Department of Finance (DOF) Circular 003-2024 are void, and ordering the return of the PhP60 billion funds of the Philippine Health Insurance Corporation (PhilHealth).

The Supreme Court ruling is a victory for all Filipino people and their right to health. It is timely, for it will influence the outcome of the Congress’s deliberation on the budget for the fiscal year 2026.

The PhP 60 billion diverted funds should be returned by strictly following the parameters set by the Supreme Court decision. That is, it should be returned to PhilHealth through a specific item in the 2026 GAA in accordance with Section 8 of Republic Act No. 10351, as amended by Section 14 of Republic Act No. 11346 and Section 9 of Republic Act No. 11467. Congress should return the PhP60 billion without setting conditions or limitations on its use by PhilHealth. This is to ensure the restoration of the status quo before the Department of Finance ordered its illegal transfer to the National Treasury.

The Supreme Court decision is clear: Sin taxes earmarked for PhilHealth’s implementation of universal healthcare (UHC) are inviolable and cannot be diverted for other purposes. The earmarking of sin tax revenues according to the main decision “constitutes an automatic appropriation in favor of PhilHealth,” that is, Congress has no discretion to exclude the earmarked sin taxes from PhilHealth’s annual budget. Thus, with the said Supreme Court ruling, it is high time that Congress and the Executive Department strictly followed the letter of the law— that PhilHealth received its full share of the sin taxes and those from the legally mandated share from PAGCOR and PCSO since the UHC Act implementation in 2019. From 2020-2025, PhilHealth received PhP 179.35 billion less than its earmarked funds from sin tax revenues. Additionally, from 2019 to 2025, PhilHealth did not receive any portion of its PhP 107.66 billion allocation from PAGCOR and PCSO shares. The cumulative deficiency of PhP 287.01 billion should be allocated to PhilHealth, along with the PhP 60 billion transferred funds, and the legally mandated allocations for the fiscal year 2026.

Finally, we note that the Supreme Court voided the transfer of PhP 60 billion and found that Special Provision 1(d) and its implementing Circular No. 003-2024 were issued with “grave abuse of discretion amounting to lack or excess of jurisdiction.” The SC said that this “financial misalignment is not merely a budgeting error – it is a breach of our constitutionally guaranteed right to health.” The “people’s right to health was not merely deprioritized,” but “brazenly disregarded.”

Considering the serious breach of the Constitution and its negative impact on the health of our people, we call for the immediate resignation of former DOF Secretary, and now Executive Secretary, Ralph Recto – the concrete and visible representation of the implementation of the fund transfer scheme. It was then Finance Secretary Recto, through his letter to PhilHealth on April 24, 2024, who directed then PhilHealth President and CEO Emmanuel Ledesma, Jr. to remit Philhealth’s fund balance amounting to PhP 89 billion to the Bureau of the Treasury (BTr), stating that “PhilHealth's substantial contribution will support the funding of priority infrastructure and social projects of the National Government.”

The actions and proceedings that led to the transfer of PhilHealth funds and how the said funds were used should be investigated so that the other people responsible for the hijacking of the people’s PhilHealth funds will be held accountable.

Petitioners:

Aquilino Pimentel III

Cielo Magno

Ernesto Ofracio†

Dante Gatmaytan

Ibarra Gutierrez

Junice Melgar

Minguita Padilla

Sentro ng mga Nagkakaisa at Progresibong Manggagawa (SENTRO)

Philippine Medical Association (PMA)

Public Services Labor Independent Confederation Foundation, Inc. (PSLINK)

†This statement is issued in honor of one of the petitioners, Ernesto Ofracio (Dec. 13, 1940 - Sept. 18, 2025), a staunch advocate for the right to health. We mourn the fact that Ka Erning did not live to witness the people's victory in this fund transfer case.