Finance Secretary Ralph Recto defended the government’s decision to transfer idle and unused funds from the Philippine Health Insurance Corp. (PhilHealth) and other government-owned and -controlled corporations (GOCCs) to the national treasury. Speaking before the Supreme Court, Recto characterized this move as a “common-sense approach” designed to avoid incurring additional foreign debt for key government projects.
Recto emphasized the economic challenges stemming from the pandemic, which resulted in a significant contraction of the economy. He highlighted the substantial increase in national debt inherited by the current administration, noting that by 2022, the debt had risen by PHP7.47 trillion. He argued that the government has a responsibility to reduce this debt burden.
He explained that the 2024 General Appropriations Act mandated the transfer of unused, idle, and excess GOCC funds to support priority programs and economic recovery efforts, amidst global economic uncertainties. He reiterated that this action is a temporary and legal measure to fund critical government initiatives. Recto stressed the importance of utilizing all available public funds, arguing that idle funds are a disservice to the Filipino people.
Recto cited the 2024 GAA, which allocated PHP5.76 trillion, while only PHP4.27 trillion was supported by revenues. He detailed the daily expenditure and revenue figures, highlighting the necessity of loans to cover the deficit. He further stated that the transfer of GOCC funds aligns with the Medium-Term Fiscal Framework, which aims to ensure macro-fiscal stability and reduce the national debt.
Recto likened the measure to the Bayanihan laws during the pandemic, describing it as a “Bayanihan 3” funded by existing resources rather than new taxes, aimed at accelerating economic recovery and job creation. He defended the government’s decision as a matter of fiscal prudence and common sense.
The Supreme Court is currently hearing oral arguments challenging the Department of Finance’s transfer of PHP89.9 billion in excess PhilHealth funds to the national treasury.
A portion of these funds remains subject to a temporary restraining order.