The Philippine Supreme Court has permanently blocked the transfer of 89.9 billion pesos ($1.5 billion) in surplus funds from the state health insurer PhilHealth to the National Treasury and ordered the return of 60 billion pesos already remitted, in a ruling hailed by the agency as vital for sustaining universal healthcare.
In a 136-page en banc decision released Friday, the high court declared unconstitutional a provision in the 2024 national budget and a related Finance Department circular that authorized the redirection of excess funds from government-owned corporations, including PhilHealth. The court found the measures constituted “grave abuse of discretion amounting to lack or excess of jurisdiction.”
The ruling voids Special Provision 1(d) of the 2024 General Appropriations Act and Finance Circular 003-2024. It permanently enjoins the government from transferring the remaining 29.9 billion pesos that had been frozen by an earlier temporary restraining order and directs Congress, the Department of Finance, and the Office of the Executive Secretary to appropriate the already-transferred 60 billion pesos as a specific line item in the 2026 national budget for return to PhilHealth.
PhilHealth spokesperson Israel Francis Pargas welcomed the decision in a radio interview Saturday, saying it “makes sure that our universal healthcare program would be sustainable and we would be able to expand and improve our benefits and services.”
Pargas noted that despite the earlier remittance of 60 billion pesos, PhilHealth’s benefit payments reached 250 billion pesos from January to October 2025 — an 83% increase from the same period in 2024. “Even though 60 billion was taken, we continued to expand and improve services,” he said.
Executive Secretary Lucas Bersamin, through a statement issued by former Finance Secretary Ralph Recto, said Malacañang respects the Supreme Court’s ruling.
Recto, who was finance secretary when the transfer was ordered, maintained that the executive branch “simply complied with the congressional mandate” and that the move had been cleared by the Office of the Government Corporate Counsel, the Governance Commission for GOCCs, the Commission on Audit, and PhilHealth’s own board.
He insisted that PhilHealth’s service delivery was never compromised and that the fund realignment actually coincided with “the agency’s largest expansion of benefit packages in Universal Health Care history,” including the rollout of zero-balance billing for indigent patients.
The controversy began last year when the Department of Finance sought to sweep 89.9 billion pesos in PhilHealth reserves deemed “excess” under the 2024 budget law to help plug the national deficit without new taxes or borrowing. Lawmakers and health advocates challenged the transfer, arguing it violated PhilHealth’s mandate and endangered the financial viability of universal healthcare.
With the Supreme Court’s final ruling, the 60 billion pesos already in the Treasury must now be returned to PhilHealth, ensuring the agency retains full control of its actuarially determined reserves.
