MANILA — The Commission on Audit (COA) has pointed out that the P89.9 billion in unutilized funds held by the Philippine Health Insurance Corporation (PhilHealth) could have been used to expand benefits for its members.
In its annual audit report, COA emphasized that the proper use of these funds would have helped PhilHealth achieve the objectives of the Universal Health Care Act (Republic Act No. 11223), which aims to provide Filipinos with equitable access to quality and affordable healthcare.
The audit report stated that the unused subsidies from the national government could have been directed toward expanding benefit programs, especially for marginalized groups such as senior citizens, persons with disabilities (PWDs), and those included in the National Household Targeting System for Poverty Reduction (NHTS).
In February, the Department of Finance issued Circular No. 003-2024, instructing government-owned and controlled corporations (GOCCs), including PhilHealth, to remit unused and idle funds to the Bureau of the Treasury.
As a result, the P89.9 billion in unutilized funds is now being redirected to cover unprogrammed appropriations in the 2024 national budget.
Finance Secretary Ralph Recto defended the move, citing the mandate under the General Appropriations Act (Republic Act No. 11975).
However, various groups have filed petitions with the Supreme Court, seeking to halt the transfer and arguing that the funds should instead be used to expand PhilHealth’s member benefits.
PhilHealth has already transferred P30 billion of the unused funds, with plans to remit another P30 billion in October and the remaining P29.9 billion in November.
However, in October, the Supreme Court issued a temporary restraining order to stop the further transfer of PhilHealth funds to the National Treasury.
The Court also rescheduled the oral arguments on the issue from January 14, 2025, to February 4, 2025, although no reason was given for the delay.
State auditors raised concerns that PhilHealth’s management of its reserve fund did not comply with the provisions of the Universal Healthcare Act. The issues included:
- Investing funds without considering the projected two-year program expenditures.
- Delays in the expansion of benefits programs and the underutilization of subsidies, resulting in the planned return of P89.9 billion in unutilized funds to the Bureau of the Treasury. This has deprived members of additional and more adequate benefits.
COA recommended that PhilHealth prioritize the projected program expenditures for the next two years before investing any unused reserve funds.
It also urged PhilHealth to revise its policies to ensure that investments are made only after expanding benefit programs or reducing premium contributions.
The audit body further suggested that PhilHealth accelerate the expansion of its benefit programs by effectively utilizing the unused portion of its reserve fund and subsidies from the national government.