MANILA — The Supreme Court’s landmark ruling invalidating the government’s transfer of P60 billion from the Philippine Health Insurance Corp. (PhilHealth) has reshaped the debate over public health financing, with the state insurer insisting the decision is crucial to protecting and sustaining Universal Health Care (UHC).
The high court on Tuesday struck down as unconstitutional a provision in the 2024 national budget and a Department of Finance (DOF) circular that compelled government-owned and -controlled corporations to remit “excess” funds to the National Treasury — including PhilHealth’s P60 billion. The SC said the measures were issued with “grave abuse of discretion amounting to lack or excess of jurisdiction.”
PhilHealth spokesperson and Senior Vice President for Health Finance Policy Israel Pargas said the ruling directly strengthens the country’s health financing system.
“This will make sure that our [Universal Health Care] program would be sustainable and we would be able to expand and improve our benefits and services,” Pargas said.
SC Orders Government to Return Funds
In its 136-page decision, the SC en banc voided Special Provision 1(d) of Chapter XLIII of the 2024 General Appropriations Act (GAA), Finance Circular 003-2024, and the subsequent fund transfer.
The DOF had ordered PhilHealth to remit P89.9 billion, but only P60 billion was actually transferred after the high court issued a temporary restraining order on the remaining P29.9 billion during the pendency of constitutional challenges.
In the same ruling, the SC permanently barred the transfer of the P29.9 billion and directed Congress, the DOF, and the Office of the Executive Secretary to itemize the P60 billion in the 2026 GAA so it can be returned to PhilHealth.
“We welcome, of course, the decision of the court,” Pargas said.
PhilHealth: Services Continued Despite Fund Loss
Pargas said PhilHealth’s operations did not stall even after the P60 billion was taken.
“In our payment of benefit payment expense… we’ve reached P250 billion as of October [2025], 83% more compared to 2024,” he said. “So even though P60 billion was taken, we continued to expand and improve services.”
He added the ruling now challenges PhilHealth “to match its available funds with improved services.”
Recto: Executive Branch Only Followed GAA Mandate
Executive Secretary Ralph Recto, who was Finance secretary when the transfer was implemented, said Malacañang respects the SC decision but stressed the Executive merely complied with the congressional mandate.
“We reiterate that the Executive simply complied with the congressional mandate under the 2024 GAA, and that the DOF’s role is solely in revenue generation and debt and deficit management,” Recto said. “We believed then, and still believe, that the directive was a common-sense approach to optimize government coffers without resorting to additional borrowing or new taxes.”
He noted that the Office of the Government Corporate Counsel, the Governance Commission for GOCCs, and the Commission on Audit all cleared the DOF to proceed, and that the PhilHealth board also approved the remittance.
Recto maintained there was no adverse effect on PhilHealth’s performance.
“In fact, the correction led to the agency’s largest expansion of benefit packages in Universal Health Care history, alongside the rollout of Zero Balance Billing to protect Filipino families from rising medical costs,” he said.
What Comes Next
With the Supreme Court’s directive, lawmakers must now ensure the P60-billion item appears in the 2026 budget — a move that would restore one of the biggest funding infusions into the UHC system in years.
PhilHealth, meanwhile, is positioning the ruling as an opportunity to further broaden benefits, expand coverage, and strengthen financial protection for millions of Filipinos./PN
