G.R. No. 274778, December 3, 2025,
♦ Decision,
Lazaro-Javier, [J]
♦ Separate Opinion Opinion,
Leonen, [J]
♦ Separate Opinion Opinion,
Dimaampao, [J]
♦ Separate Opinion Opinion,
Marquez, [J]
♦ Separate Opinion Opinion,
Villanueva, [J]
♦ Concurring Opinion,
Caguioa, [J]
♦ Concurring Opinion,
Rosario, [J]
♦ Separate and Dissenting Opinion,
Hernando, [J]
♦ Separate Concurring Opinion,
Singh, [J]
♦ Separate Concurring Opinion,
Lopez, [J]
♦ Separate Concurring Opinion,
Gaerlan, [J]
♦ Separate Concurring Opinion,
Inting, [J]
♦ Separate Concurring Opinion,
Zalameda, [J]
Manila
EN BANC
[ G.R. Nos. 274778, 275405 & 276233, December 03, 2025 ]
AQUILINO PIMENTEL III; ERNESTO OFRACIO; JANICE LIRZA MELGAR; MARIA CIELO MAGNO; MA. DOMINGA CECILIA B. PADILLA; DANTE B. GATMAYTAN; IBARRA M. GUTIERREZ; SENTRO NG MGA NAGKAKAISA AT PROGRESIBONG MANGGAGAWA; PUBLIC SERVICES LABOR INDEPENDENT CONFEDERATION FOUNDATION, INC.; AND PHILIPPINE MEDICAL ASSOCIATION,
PETITIONERS,
ATTY. JOSE SONNY MATULA, PRESIDENT OF THE FEDERATION OF FREE WORKERS (FFW-NAGKAISA LABOR COALITION); DANIEL EDRALIN, SECRETARY GENERAL, NATIONAL VNION OF WORKERS IN HOTEL RESTAURANT AND ALLIED INDUSTRIES (NUWHRAIN-NAGKAISA); RENATO MAGTUBO, CHAIRPERSON, PARTIDO MANGGAGAWA (PM-NAGKAISA); JULIUS CAINGLET, CHURCH-LABOR CONFERENCE, GRACE A. ESTRADA, PRESIDENT, PINAY CAREWORKERS TRANSNATIONAL (PIN@Y); ALFREDO MARANAN, FFW NATIONAL TREASURER; JUN RAMIREZ MENDOZA, UNION PRESIDENT, VISHAY EMPLOYEES PHILIPPINES UNION-FFW AND NATIONAL VICE PRESIDENT, FFW; JUDY ANN CHAN MIRANDA, CHAIRPERSON, NAGKAISA WOMEN COMMITTEE, GENERAL SECRETARY, PM-NAGKAISA; VILMA G. REYES, UNION PRESIDENT, DELA SALLE MEDICAL AND HEALTH SCIENCES INSTITUTE EMPLOYEES UNION-FFW, NATIONAL BOARD MEMBER, FFW; RENE L. CAPITO, NATIONAL PRESIDENT, ALLIANCE OF FILIPINO WORKERS (AFW); ELIJA R. SAN FERNANDO, NATIONAL VICE PRESIDENT, NATIONAL FEDERATION OF LABOR (NFL); RENE DE MESA TADLE, PRESIDENT OF THE COUNCIL OF TEACHERS AND STAFF OF COLLEGES AND UNIVERSITIES OF THE PHILIPPINES (COTESCUP); EMERITO C. GONZALES, UNION PRESIDENT UST FACULTY UNION (USTFU); DENNIES GUTIERREZ, UNION PRESIDENT, INTERPHIL LABORATORIES EMPLOYEES UNION-FFW (ILEU-FFW); ROLANDO LIBROJO, CONVENOR, KILUSANG ARTIKULO 13 (A.13); AND ATTY. DANILO C. ISIDERIO, FFW LEGAL CENTER,
PETITIONERS-IN-INTERVENTION,
vs.
HOUSE OF REPRESENTATIVES REPRESENTED BY THE SPEAKER FERDINAND MARTIN ROMUALDEZ; SENATE OF THE REPUBLIC OF THE PHILIPPINES, REPRESENTED BY SENATE PRESIDENT FRANCIS ESCUDERO; DEPARTMENT OF FINANCE SECRETARY RALPH RECTO; EXECUTIVE SECRETARY LUCAS BERSAMIN; AND PHILIPPINE HEALTH INSURANCE CORPORATION REPRESENTED BY ITS PRESIDENT, EMMANUEL R. LEDESMA, JR.,
RESPONDENTS.
[G.R. No. 275405]
BAYAN MUNA CHAIRMAN NERI COLMENARES, BAYAN MUNA VICE CHAIRMAN TEODORO A. CASIO, BAYAN MUNA EXECUTIVE VICE PRESIDENT CARLOS ISAGANI T. ZARATE, AND FORMER BAYAN MUNA REPRESENTATIVE FERDINAND R. GAITE,
PETITIONERS,
vs.
EXECUTIVE SECRETARY LUCAS P. BERSAMIN, SENATE OF THE PHILIPPINES AND THE HOUSE OF REPRESENTATIVES,
RESPONDENTS.
[G.R. No. 276233]
1SAMBAYAN COALITION; MEMBERS OF U.P. LAW CLASS 1975 NAMELY: JOSE P.O. ALILING IV, AUGUSTO H. BACULIO, EDGARDO R. BALBIN, MOISES B. BOQUIA, ANTONIO T. CARPIO, MANUEL C. CASES, JR., RICHARD J. GORDON, OSCAR L. KARAAN, BENJAMIN L. KALAW, LUCAS C. LICREIO, TOMAS N. PRADO, ELIZER A. ODULIO, OSCAR M. ORBOS, AURORA A. SANTIAGO, EMILY SIBULO-HAYUDINI, CONRAD D. SORIANO, AND JOSE B. TOMIMBANG; FORMER OMBUDSMAN CONCHITA CARPIO MORALES; SENIOR FOR SENIORS ASSOCIATION, INC., REPRESENTED BY MS. CAROL BLANCO BENAVIDES; KIDNEY FOUNDATION OF THE PHILIPPINES, REPRESENTED BY ATTY. VICENTE GREGORIO; AND ATTY. CHRISTOPHER JOHN P. LAO,
PETITIONERS,
vs.
HOUSE OF REPRESENTATIVES REPRESENTED BY THE SPEAKER, FERDINAND MARTIN ROMUALDEZ; THE SENATE OF THE REPUBLIC OF THE PHILIPPINES REPRESENTED BY THE SENATE PRESIDENT FRANCIS JOSEPH ESCUDERO; DEPARTMENT OF FINANCE SECRETARY RALPH RECTO; EXECUTIVE SECRETARY LUCAS BERSAMIN; AND PHILIPPINE HEALTH INSURANCE CORPORATION, REPRESENTED BY ITS PRESIDENT, EMANNUEL R. LEDESMA, JR.,
RESPONDENTS.
D E C I S I O N
LAZARO-JAVIER,
PREFATORY
Health is wealth, but wealth is also health.
In the Philippines, the age-old adage
health is wealth
is not just wisdomit is a warning. When 42.7% of healthcare expenses are paid directly out of pocket by Filipino families,
a painful truth emerges:
wealth is health.
And for too many, this truth decides whether life proceeds with dignity or spirals into debt, despair, and suffering.
Consider a story recently aired on national television:
A fatherworking-class and devotedsuffered a stroke worsened by diabetes. His leg was amputated. The hospital bill reached PHP 400,000.00. Even after discounts, his family was short by PHP 65,000.00. They borrowed money to be able to pay, and debt began its cruel descent. But the costs did not end at discharge. Medications, therapy, and home adjustments followed. Unable to cope, they rationed his prescriptions. Not out of neglect, but necessity. Their budget left no other option.
This is not an isolated tragedy. It echoes across thousands of Filipino householdsunheard, unseen, but no less real. It forces us to confront a chilling contradiction: What good is a constitutionally guaranteed right to life when the right to health remains financially unreachable?
A deafening silence looms between law and lived reality.
The right to health is not abstract philosophy. It is the heartbeat of the right to lifethe foundation on which all other freedoms stand. It is
primus inter pares
first among equalsin the constellation of rights that uphold human dignity.
Illness does not strike in isolation. It devours entire families. It robs children of opportunity, breadwinners of strength, and communities of resilience. Without health, our capacity to work, learn, vote, protest, parent, or even survive erodes. And with it, so does our ability to claim the other rights we hold dear.
This is why the right to health is not merely important. It is enabling, elevating, empowering. A government that protects this right affirms the value of every human life. It anchors dignity in policy. It puts compassion into practice.
But rights need resources.
We fund our courts to defend liberty. We support education to unlock potential. We invest in national defense to preserve peace. Yet health is persistently underfundeda paradox given how foundational it is. Why does the most immediate right remain the most neglected?
To remain silent is to remain complicit.
Those who are sick may not storm the halls of power, but their struggles must command equal urgency. Their pain is enduring. Their care must be treated as a core pillar of justice. Their quiet suffering demands loud, unwavering advocacy.
The Judiciary has a constitutional mandate: To protect not only the abstract right to health, but the concrete right to accessible, affordable, and sustainable public healthcare. The Universal Health Care Act (UHCA) is a landmark step. It speaks of inclusion, protection, and equity. But laws are only as strong as the commitment behind them. And commitment needs funding, structure, empathy, and vigilance.
We must demand a system that healsthen supports, prevents, and uplifts. Because when health becomes a privilege, life itself becomes a commodity. And in any society worthy of justice, neither should it ever be for sale.
Health is never abstract or theoretical. It is intimate. Immediate. Non-negotiable. It must be safeguardednot eventually, not someday, not 10 years after, but today.
A healthy population is not just the bedrock of national development; it is the highest expression of our shared humanity. When our people are protected by a just and reliable health system, we do more than survive.
We thrive. We dream. We hope.
The Cases
These three consolidated Petitions for
Certiorari
and Prohibition
and Petition-in-Intervention
assail for being unconstitutional Special Provision 1(d), Chapter XLIII of Republic Act No. 11975 [Special Provision 1(d)] or the General Appropriations Act of 2024 (2024 GAA) and Department of Finance (DOF) Circular No. 003-2024 (DOF Circular No. 003-2024) which mandated the transfer to the National Treasury of PHP 89.9 billion representing the "fund balance" of the Philippine Health Insurance Corporation (PhilHealth).
Antecedents
In 2012, Congress enacted Republic Act No. 10351
which restructured the excise tax on alcohol and tobacco products. It earmarked funds for universal healthcare and covered the subsidies of the National Government to the premium contributions of indigents or indirect contributors under the National Health Insurance Program (NHIP). Subsequently, Republic Act No. 10351 was amended to include excise tax on heated tobacco and vapor products. These taxes have since become the primary component of the government subsidy received by PhilHealth annually
pursuant to Section 8
of Republic Act No. 10351, as amended.
In 2019, Republic Act No. 11223 or the UHCA
was enacted, expanding the country's social health insurance.
Consistent with Republic Act No. 10351 as amended, Section 37 of the UHCA listed total incremental sin tax collections as one of the sources of appropriations for the implementation of the NHIP:
Section 37.
Appropriations.
The amount necessary to implement this Act shall be sourced from the following:
(a) Total incremental sin tax collections as provided for in Republic Act No. 10351, otherwise known as the "Sin Tax Reform Law:"
Provided,
That the mandated earmarks as provided for in Republic Act Nos. 7171 and 8240 shall be retained;
(b) Fifty percent (50%) of the National Government share from the income of the Philippine Amusement and Gaming Corporation as provided for in Presidential Decree No. 1869, as amended:Provided, That the funds raised for this purpose shall be transferred to PhilHealth at the end of each quarter subject to the usual budgeting, accounting and auditing rules and regulations;Provided, further, That the funds shall be used by PhilHealth to improve its benefit packages;
(c) Forty percent (40%) of the Charity Fund, net of Documentary Stamp Tax Payments, and mandatory contributions of the Philippine Charity Sweepstakes Office (PCSO) as provided for in Republic Act No. 1169, as amended:Provided, That the funds raised for this purpose shall be transferred to PhilHealth at the end of each quarter subject to the usual budgeting, accounting, and auditing rules and regulations;Provided, further, That the funds shall be used by PhilHealth to improve its benefit packages;
(d) Premium contributions of members;
(e) Annual appropriations of the Department of Health (DOH) included in the GAA; and
(f) National Government subsidy to PhilHealth included in the GAA.
The amount necessary to implement the provisions of this Act shall be included in the GAA and shall be appropriated under the DOH and National Government subsidy to PhilHealth, the DOH, in coordination with PhilHealth, may request Congress to appropriate supplemental funding to meet targeted milestones of this Act. (Emphasis supplied)
The UHCA also provided a 10-year implementation period.
Section 5 ordained the automatic coverage of every Filipino citizen in the NHIP while Section 6 enumerated the health care services that must be granted to every Filipino citizen, thus:
Section 5.
Population Coverage.
Every Filipino citizen shall be automatically included into the NHIP, hereinafter referred to as the Program.
Section 6.
Service Coverage.
(a) Every Filipino shall be granted immediate eligibility and access to preventive, promotive, curative, rehabilitative, and palliative care for medical, dental, mental and emergency health services, delivered either as population-based or individual-based health services:
Provided,
That the goods and services to be included shall be determined through a fair and transparent [Health Technology Assessment (HTA)] process;
(b) Within two (2) years from the effectivity of this Act, PhilHealth shall implement a comprehensive outpatient benefit, including outpatient drug benefit and emergency medical services in accordance with the recommendations of the Health Technology Assessment Council (HTAC) created under Section 34 hereof;
(c) The DOH and the local government units (LGUs) shall endeavor to provide a health care delivery system that will afford every Filipino a primary care provider that would act as the navigator, coordinator, and initial and continuing point of contact in the health care delivery system;
Provided,
That except in emergency or serious cases and when proximity is a concern, access to higher levels of care shall be coordinated by the primary care provider; and
(d) Every Filipino shall register with a public or private primary care provider of choice. The DOH shall promulgate the guidelines on the licensing of primary care providers and the registration of every Filipino to a primary care provider.
In 2020, Section 14 of Republic Act No. 11346
further inserted a new provision, Section 288-A, under Chapter II, Title XI of the National Internal Revenue Code (NIRC), which reserved a portion of the revenues from excise tax on sugar-sweetened beverages, alcohol products, tobacco products and heated tobacco and vapor products (sin tax) for the implementation of the UHCA.
Finally, Section 9 of Republic Act No. 11467
amended Section 288-A of the NIRC, increasing the portion of the excise or sin taxes reserved for the implementation of the UHCA.
On August 2, 2023, President Ferdinand R. Marcos, Jr. (President Marcos, Jr.) submitted to the Congress the following documents relating to the national budget for the fiscal year 2024: (a) Budget Message;
(b) Budget of Expenditures and Sources of Financing (BESF);
(c) National Expenditure Program (NEP);
and (d) Staffing Summary.
On August 30, 2023, members of the House of Representatives filed House Bill No. 8980 titled "An Act Appropriating Funds for the Operation of the Government of the Republic of the Philippines from January One to December Thirty-One, Two Thousand and Twenty-Four."
House Bill No. 8980 adopted the PHP 5.7676 trillion budget, with PHP 4.0198 trillion programmed appropriations, PHP 1.7478 trillion automatic appropriations, and PHP 281.9 billion unprogrammed appropriations, as recommended by President Marcos, Jr. in his budget submissions.
On September 4, 2023, House Bill No. 8980 was tackled on First Reading in the House of Representatives. By Letter dated September 20, 2023 addressed to Speaker Ferdinand Martin G. Romualdez of the House of Representatives (Speaker Romualdez), President Marcos, Jr. certified as urgent House Bill No. 8980.
On September 27, 2023, House Bill No. 8980 was approved by the House of Representatives on Second and Third Readings. The approved version of House Bill No. 8980 was transmitted to the Senate for its concurrence on November 4, 2023,
and tackled on First Reading in the Senate on November 6, 2023.
On November 28, 2023, the Senate approved House Bill No. 8980 on Second Reading with amendments and, on the same day, House Bill No. 8980 was approved by the Senate on Third Reading.
The Senate and the House of Representatives thereafter designated their conferees to the Bicameral Conference Committee (BCC) to tackle specific provisions of House Bill No. 8980 on which the Houses of Congress did not agree.
The BCC held two meetings for this purpose, first on November 28, 2023, and second on December 6, 2023.
On December 11, 2023, the BCC submitted its Report to both the House of Representatives and the Senate, recommending the approval of House Bill No. 8980 which:
first
, reflected an increase in the amount of unprogrammed appropriations from PHP 281.9 billion to PHP 731.4 billion; and
second
, inserted Special Provision 1(d) under Chapter XLIII on unprogrammed appropriations, ordaining the return to the National Treasury of "the fund balance of government-owned and controlled corporations (GOCCs) from any remainder resulting from the review and reduction of their "reserve funds" to reasonable levels taking into account the disbursement from prior years."
On the same day, the Report was approved by both Houses of Congress.
On December 20, 2023, the President signed House Bill No. 8980 into law, now known as Republic Act No. 11975 or the 2024 GAA.
It took effect on January 1, 2024.
Special Provision 1(d) thereof under Chapter XLIII on unprogrammed appropriations authorized the return of the "fund balance" or the excess "reserve funds" of GOCCs to the National Treasury to fund unprogrammed appropriations under the 2024 GAA,
viz
Special Provision(s)
1. Availment of the Unprogrammed Appropriations. The amounts authorized herein for Purpose Nos. 1, 3-5, and 7-51 may be used when any of the following exists:
(d) Fund balance of the Government-Owned or -Controlled Corporation (GOCCs) from any remainder resulting from the review and reduction of their reserve funds to a reasonable levels taking into account disbursement from prior years.
The Department of Finance shall issue the guidelines to implement this provision within fifteen (15) days from effectivity of this Act. (Emphasis supplied)
By virtue of this provision, the DOF issued DOF Circular No. 003-2024 on February 27, 2024, requiring GOCCs such as PhilHealth to remit their fund balance to the National Treasury, thus:
Section 5. PROCEDURE FOR THE COLLECTION AND REMITTANCE OF FUND BALANCE
1.
The DOF shall notify in writing the GOCC regarding the Fund Balance to be remitted to the Bureau of the Treasury(BTr). The date of the electronic transmission shall be considered as the date of receipt.
2.
The GOCC shall remit to the BTr the Fund Balance within fifteen (15) calendar days from the receipt of such notice. Upon remittance, the GOCC shall inform the DOF of such remittance
including the proof thereof.
3. Upon remittance,
the BTr shall issue to the Deportment of Budget and Management (DBM) a certification stating the amount of the Fund Balance remitted to the BTr by the GOCC
in accordance with these Guidelines and
copyfurnishing DOF
. The
certification shall become the basis of the DBM in the release of funds chargeable against unprogrammed appropriations
under Republic Act No. 11975, subject to applicable budgeting, accounting and auditing rules and regulations.
4.
Any remitted Fund Balance shall not be considered as a payment of any dividend arrears or advance dividend payment for the succeeding dividend years
pursuant to Republic Act No. 7656, entitled as "An Act Requiring Government-Owned Or-Controlled Corporations To Declare Dividends Under Certain Conditions To The National Government, And For Other Purposes." (Emphasis supplied)
Under Letter
dated April 24, 2024, Secretary Ralph G. Recto (Secretary Recto) of the DOF instructed PhilHealth to remit to the National Treasury its fund balance of PHP 89 billion, later clarified to be PHP 89.9 billion. These funds were supposedly the excess "reserve funds" of PhilHealth coming from the government subsidy contributions or premiums for indigents or indirect contributors which it received for the years 2021, 2022, and 2023.
In compliance, the PhilHealth Board of Directors approved the transfer of the subject funds, and remitted PHP 20 billion to the National Treasury for the first tranche on May 10, 2024;
PHP 10 billion on August 21, 2024 for the second tranche; and PHP 30 billion on October 16, 2024 for the third tranche.
On September 20, 2025, President Marcos, Jr. announced that the PHP 60 billion fund balance of PhilHealth remitted to the National Treasury will be returned to the PhilHealth.
The Present Petitions
G.R. No. 274778
Petitioners Senator Aquilino Pimentel III, Ernesto Ofracio, Junice Lirza D. Melgar, Maria Cielo Magno, Ma. Dominga Cecilia B. Padilla, Dante B. Gatmaytan, Sentro ng mga Nagkakaisa at Progresibong Manggagawa, Inc. (SENTRO), Public Services Labor Independent Confederation Foundation, Inc. (PSLINK), and Philippine Medical Association (PMA) (collectively, Pimentel III, et al.) filed the Petition for
Certiorari
and Prohibition (with Application for Status
Quo Ante
Order, Temporary Restraining Order (TRO), and/or Writ of Preliminary Injunction)
against respondents House of Representatives, Senate of the Philippines, Secretary Recto, Executive Secretary Lucas P. Bersamin (Executive Secretary Bersamin) (collectively, respondents), and PhilHealth. They seek to declare as unconstitutional Special Provision 1(d) and DOF Circular No. 003-2024 on the following grounds:
First,
Special Provision 1(d) is a prohibited rider violative of Article VI, Section 25(2) of the Constitution because it is not germane to the 2024 GAA. Specifically, it does not meet the requirements for germaneness,
i.e.
, the provision or clause must be particular, unambiguous, and appropriate. Special Provision 1(d) is inappropriate insofar as it amends the UHCA and 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 (the Sin Tax Laws), by diverting funds for the exclusive use of PhilHealth to the National Treasury. It is also ambiguous because its implementation requires reference to previous budget and non-budget legislation.
Second,
the insertion of Special Provision 1(d) exceeds the power of the Congress to appropriate funds under the Constitution as it effectively diverts, for further appropriation by the Executive, the "reserve funds" of PhilHealth earmarked for the implementation of the UHCA.
Third,
for the same reason, DOF Circular No. 003-2024 violates Article VI, Section 29(3) of the Constitution, prohibiting the transfer of special funds to purposes other than for which those funds have been created.
Fourth,
DOF Circular No. 003-2024 further violates Section 70 of Republic Act No. 11936 or the GAA of 2023 (2023 GAA) since even before the end of Fiscal Year December 31, 2024, it already ordered the return to the National Treasury of supposed unused or excess funds of GOCCs like PhilHealth.
Finally,
Special Provision 1(d) and DOF Circular No. 003-2024 violate the people's constitutional right to health by effectively depriving the Filipino people of funds that could increase their access to quality and affordable health care goods and services.
Petition-in-Intervention
Intervenors Atty. Jose Sonny Matula, President, Federation of Free Workers (FFW-NAGKAISA Labor Coalition); Daniel Edralin, Secretary General, National Union of Workers in Hotel Restaurant and Allied Industries; Renato Magtubo, Chairperson, Partido Manggagawa (PM-NAGKAISA); Julius Cainglet, Co-Convenor, Church-Labor Conference; Grace A. Estrada, President, Pinay Careworkers Transnational; Alfredo Maranan, FFW National Treasurer; Jun Ramirez Mendoza, Union President, Vishay Employees Philippines Union-FFW and National Vice President, FFW; Judy Ann Chan Miranda, Chairperson, Nagkaisa Women Committee and General Secretary, PM-NAGKAISA; Vilma G. Reyes, Union President, De La Salle Medical and Health Sciences Institute Employees Union-FFW and National Board Member, FFW; Rene L. Capito, National President, Alliance of Filipino Workers (AFW); Elija R. San Fernando, National Vice President, National Federation of Labor (NFL); Rene De Mesa Tadle, President, Council of Teachers and Staff of Colleges and Universities of the Philippines; Emerito C. Gonzales, Union President, University of Santo Tomas (UST) Faculty Union; Dennis Gutierrez, Union President, Interphil Laboratories Employees Union-FFW; Rolando Librojo, Convenor, Kilusang Artikulo 13; and Atty. Danilo C. Isiderio, FFW Legal Center (collectively, Atty. Matula et. al) moved to intervene in
G.R. No. 274778.
They did so in their respective capacities as national officers and representatives of the NAGKAISA Labor Coalition and in their individual capacities as citizens, taxpayers, and members of PhilHealth.
They claim to possess vested interests in protecting the funds entrusted to PhilHealth because they will be adversely affected by Special Provision 1(d) and DOF Circular No. 003-2024, which reduced the "reserve funds" of PhilHealth intended for the expansion of the basic health benefits and services under the NHIP.
Atty. Matula et al. join the arguments of Pimentel III et al.,
and in addition, submit that:
First,
under the Constitution, it is the President, not the Congress, who may be authorized by law to augment an item in the general appropriations law from savings coming from another item.
Special Provision 1(d) and DOF Circular 003-2024 thus unduly delegated to the Secretary of Finance the power to transfer the savings of GOCCs to the National Treasury.
Second,
the transfer of idle or unused funds from PhilHealth to the National Treasury constitutes technical malversation of public funds and plunder. The PHP 89.9 billion fund balance belongs to PhilHealth members and is not intended to augment the funds in the National Treasury.
G.R. No. 275405
Petitioners BAYAN MUNA Chairman Neri J. Colmenares, BAYAN MUNA Vice Chairman Teodoro A. Casio, BAYAN MUNA Executive Vice President Carlos Isagani T. Zarate, and Former BAYAN MUNA Representative Ferdinand R. Gaite (collectively, Atty. Colmenares et al.) filed the Petition for
Certiorari
and Prohibition
against respondents President Marcos, Jr., Executive Secretary Bersamin, the Senate of the Philippines, and the House of Representatives.
Procedurally, Atty. Colmenares et al. argue that their direct resort to the Court is proper since their Petition raises pure questions of law and important constitutional issues. Too, as citizen-taxpayers, they have legal standing to assail the use of public funds through the subject provision of the 2024 GAA. Further, their Petition was filed at the earliest opportunity,
i.e.
, during the lifetime of the 2024 GAA. Finally, the constitutionality of the actions of President Marcos, Jr. and both Houses of Congress is the very
lis mota
of the case.
As for the substantive issues, Atty. Colmenares et al. aver that:
First,
the President committed grave abuse of discretion in certifying as urgent House Bill No. 8980 sans any public calamity or emergency in violation of Section 26(2), Article VI of the Constitution. The President certified as urgent House Bill No. 8980 "in order to address the need to maintain continuous government operations following the end of the current fiscal year." This reason, however, did not justify the certification of urgency because no public calamity or emergency existed at that time.
Another, the presidential certification infringes on the constitutional power and duty of the Congress to deliberate on a bill in three readings on separate days before voting thereon. The presidential certification does not excuse compliance with the constitutional requirement that printed copies of a bill be distributed to members of the Congress before it is subjected to a vote for approval.
By virtue of such unconstitutional certification, the Congress undertook a short-cut method in enacting the 2024 GAA.
There was no point in rushing the passage of the 2024 GAA as early as September 2023 as it would not be taking effect until January 1, 2024. At any rate, Article VI, Section 25(7) of the Constitution governs in the event the Congress fails to pass a general appropriations bill for the ensuing fiscal year,
i.e.
, the general appropriations law for the preceding fiscal year shall be deemed re-enacted and remain in force until the corresponding general appropriations bill is passed by the Congress.
Second,
the constitutional prohibition against increasing the appropriations recommended by the President was violated. The Report of the BCC inserted a total of PHP 449.5 billion under unprogrammed appropriations resulting in the increase thereof from PHP 289.1 billion to PHP 731.4 billion, which is void for being substantially different from the amount contained in the NEP submitted by the President to the Congress.
Third,
increasing the unprogrammed appropriations and inserting the subject provision as a new item not found in the version of House Bill No. 8980 approved by both Houses of Congress are unconstitutional since the BCC is not a third house of the Congress; it is not empowered to perform legislative functions. If anything, the power of the BCC is only to harmonize the differences between the bills passed by each Chamber of Congress. Thus, when there is no discrepancy, there is nothing to harmonize in the bill, as here.
Finally,
Atty. Colmenares et al. pray that the Court issue guidelines on the exercise of the President's power to certify a bill as urgent. They also seek the issuance of parameters for the creation, practice, and process of a bicameral conference committee in accordance with the Constitution.
G.R. No. 276233
Petitioners 1Sambayan Coalition; Members of U.P. Law Class 1975 namely, Jose P.O. Aliling IV, Augusto H. Baculio, Edgardo R. Balbin, Antonio T. Carpio, Jr., Richard J. Gordon, Oscar L. Karaan, Benjamin L. Kalaw, Lucas C. Licerio, Tomas N. Prado, Elizer A. Odulio, Aurora A. Santiago, Emily Sibulo-Hayudini, Conrad D. Soriano, Mercy Pine, Prudencio B. Jalandoni, Nonette C. Mina, and Jose B. Tomimbang; Former Ombudsman Conchita Caprio-Morales; Senior For Seniors Association, Inc., represented by Ms. Carol Blanco Benavides; Kidney Foundation of the Philippines, represented by Jose Rafael Hernandez; Atty. Christopher John P. Lao; the San Beda College Alabang-Human Rights Center namely, Gloriette Marie Abundo, Elvie Amiscosa, Isabel Francesca Anunciacion, Aramaine Balon, Charmae Ann Maravilla, and Rhiana Isabelle Navarro (collectively, 1Sambayan Coalition et al.) filed the Petition for
Certiorari
and Prohibition (with Urgent Prayer for the Issuance of a TRO, Writ of Preliminary Injunction and/or Other Injunctive Remedies)
dated October 16, 2024 against the same respondents.
1Sambayan Coalition et al. argue that the subject provision is an invalid delegation of authority as the power to transfer savings is only vested upon those enumerated in the exhaustive list under Article VI, Section 25(5) of the Constitution, of which the Congress is not a part.
Nonetheless, even if the transfer was authorized by the President himself, it would still constitute a transfer of special funds raised for a specific purpose, violative of Article VI, Section 26(3) of the Constitution.
Too, 1Sambayan Coalition et al. argue that in issuing DOF Circular No. 003-2024, the Secretary of Finance arrogated unto himself the authority belonging to the President under Article VI, Section 25(5) of the Constitution.
They also urge the Court to find the DOF Secretary liable for malversation and/or plunder for issuing the directive to transfer PhilHealth funds to the National Treasury.
Comments on the Petitions
The Office of the Solicitor General (OSG),
on behalf of respondents House of Representatives, the DOF, Secretary Recto, and Executive Secretary Bersamin pray for the dismissal of the Petitions allegedly because:
First,
the requisites for the exercise of judicial review are absent.
Second,
there was violation of the doctrine of exhaustion of administrative remedies which include the filing of a case before the DOF itself.
Third,
the President was improperly impleaded and must be dropped as a respondent by virtue of his presidential immunity from suit.
Fourth,
Special Provision 1(d) is not a rider because it has a reasonable relation to the 2024 GAA where sources of funds for unprogrammed appropriations are necessarily included. It does not amend or repeal any provision of the UHCA and the Sin Tax Laws because: (1) the concept of "fund balance" under Special Provision 1(d) is different from the concept of "reserve funds" under the UHCA; (2) the concept of "reserve funds" remains the same even after the 2024 GAA containing the special provision took effect; (3) it does not revoke the mandate of PhilHealth under the UHCA; (3) the special provision does not authorize the withdrawal of the Investment Reserve Fund of PhilHealth; (4) the prohibition against the transfer of PhilHealth's reserve fund to the general fund remains in place; and (5) the subject matter of the Sin Tax Laws is different from the subject matter of the special provision.
Fifth,
fund balance is not the same as savings which, in the context of Section 25(5), Article VI of the Constitution, pertains to "money originally appropriated for one purpose [but] remain unspent after that purpose has been fulfilled or otherwise terminated."
Thus, Special Provision 1(d) and DOF Circular No. 003-2024, as well the DOF Secretary's directive to transfer the fund balance to the National Treasury did not emanate from the power of the President to transfer savings under Article VI, Section 25(5) of the Constitution. There is therefore no undue delegation of power to the DOF.
Sixth,
there is no violation of the right to health. The out-of-pocket expenditure of the people for healthcare has no relation to the remittance of PhilHealth funds to the National Treasury. The remittance will not necessarily hamper or disable the implementation of the UHCA. Besides, the issue on the benefit packages of PhilHealth is a question of policy beyond the jurisdiction of the Court.
Seventh,
the fund balance defined under DOF Circular No. 003-2024 does not include the special fund from sin tax collections as the fund balance can only include "unrestricted funds," hence, there is no occasion by which Article VI, Section 29(1) of the Constitution could have been violated.
Eighth,
there is no violation of the cash-budgeting system under Section 70 of the 2023 GAA. The cash-budgeting system only requires that unutilized amounts remaining at the end of the fiscal year must be returned to the National Treasury. It does not require the reversion of the unexpended balances of appropriation to be made only at the end of the fiscal year.
Ninth,
the transfer of funds from PhilHealth to the National Treasury does not constitute technical malversation or plunder. One element of technical malversation is the application of the subject funds to a purpose different from that for which they were originally appropriated by law.
The fund balance of PhilHealth, however, was not appropriated by law for a specific purpose, hence, isnota special fund. Rather, it comprises the "unexpended" or "unutilized" subsidy contributions of the National Government to PhilHealth.
On the other hand, the gravamen of plunder is the accumulation of ill-gotten wealth through a combination or series of criminal acts. Here, the fund balance of PhilHealth was clearly remitted to the National Treasury, thus, there was no acquisition of ill-gotten wealth to speak of either.
Tenth,
the President's certification of House Bill No. 8980 is in accordance with Article VI, Section 26(2) of the Constitution. A general appropriations law is not different from any ordinary statute and must be passed promptly. The timely passage of a general appropriations law ensures that the National Government's planned programs and projects within a particular fiscal year are realized; and provides a degree of stability and predictability essential to the nation's economic growth and development.
Recognizing the importance of the timely passage of the 2024 GAA, the President certified as urgent House Bill No. 8980. If the 2024 GAA were not passed by December 31, 2023, the 2023 GAA would have been deemed re-enacted. This would have resulted in the government's inability to address its specific priorities, goals, and needs for the 2024 Fiscal Year. Notably, the Congress itself did not question the President's certification of House Bill No. 8980, hence, the same must be given due deference as a valid exercise of wisdom by the Chief Executive.
Regarding the required distribution of printed copies of House Bill No. 8980 in advance,
Tolentino v. Secretary of Finance
has long settled that the President's certification for immediate enactment of a bill dispenses not only with the required reading on three separate days but also the required printing and distribution of printed copies in advance; otherwise, the time saved would be so negligible as to be of any use in ensuring the immediate enactment of the "urgent" bill.
Eleventh,
What Article VII, Section 22 of the Constitution prohibits is the increase in the President's proposed budget or the BESF; and not the increase in the unprogrammed appropriations which is in accordance with Article VI, Section 25(1) of the Constitution.
It is customary that the President submits to the Congress the following budget documents: (1) Budget Message; (2) BESF; (3) NEP; and (4) Staffing Summary. Of these documents, the BESF is the constitutionally and statutorily mandated document bearing the President's proposed budget for the ensuing fiscal year. Notably, unprogrammed appropriations are not part of the National Government Expenditures in the BESF. On the other hand, the NEP, which contains unprogrammed appropriations, does not reflect the sources of financing mandated by Article VII, Section 22 of the Constitution. Therefore, since Congress did not increase the budget proposed by President Marcos, Jr. in the BESF, there is no violation of Article VI, Section 25(1) of the Constitution.
Twelfth,
the BCC has the power to modify and add provisions to a bill under its review. The rules of both Houses of Congress in fact recognize this power. Further,
Tolentino
confirmed the BCC's power to propose amendments and even include an entirely new provision that is not found either in the House bill or in the Senate bill.
Lastly
, the Court may not make any finding of criminal liability for technical malversation and/or plunder against the DOF Secretary in a petition for
certiorari
and prohibition.
For its part, PhilHealth, through the Office of the Government Corporate Counsel (OGCC) headed by Government Corporate Counsel Solomon M. Hermosura, asserts that DOF Circular No. 003-2024 complied with the guidelines set by the 2024 GAA. The enforcement of the national budget is vested upon the executive branch and the DOF is primarily responsible for the efficient management and financial resources of the government. It also echoes the OSG's argument that the fund balance does not include special funds under Article VI, Section 29(3) of the Constitution since it only covers unrestricted funds. Assumingarguendothat the fund balance is considered a special fund, the purpose for which it was created had already been fulfilled or abandoned.
PhilHealth likewise argues that Special Provision 1(d) is not a rider and is germane to the purpose of the GAA, which is the allocation of funds for the operation and activities of the government. It simply bears the mechanism by which a source of funding for unprogrammed appropriations under the GAA is created.
Finally, PhilHealth states that the cash-budgeting system under Section 70 of the 2023 GAA does not require the government subsidy to be utilized in full by December 31, 2024. There is also no prohibition against reversion of the unutilized funds prior to December 31, 2024.
Consolidation of cases and Preliminary Conference
By Resolution
dated September 9, 2024, the Court ordered the consolidation of
G.R. No. 275405
with
G.R. No. 274778
and set the consolidated cases for oral arguments on January 14, 2025. Meanwhile, under Resolution
dated October 8, 2024, the Court granted the Motion for Intervention with Leave of Court
filed by Atty. Matula, et al.; and under Resolution
dated October 29, 2025, the Court ordered the consolidation of
G.R. No. 276233
with
G.R. Nos. 274778
and
275405
The Court thereafter held a preliminary conference on the consolidated cases on October 9, 2024, during which, petitioners were directed to file their respective compliances with the Court's directive to submit proofs of their respective legal standing and/or authorization to file the Petitions; their responses to the queries of the Court;
the specific documents pertaining to the fiscal operations of PhilHealth;
and the names andcurriculum vitaeof their proposed
amici curiae
TRO and Compliances
Under Resolution
dated October 29, 2025, the Court issued a TRO against the transfer to the National Treasury of the remaining PHP 29.9 billion PhilHealth funds; and the further implementation of Special Provision 1(d) and DOF Circular No. 003-2024.
The parties also submitted their responses to the clarifications sought by the Court on several matters. Petitioners maintain
that the DOF mistakenly deducted the benefit claims of indirect members from their premium contributions and labeled the difference as "excess funds," which may be transferred to the National Treasury. They argue that this difference still makes up the premiums of members that may not be taken by the DOF. Thus, allowing the transfer of this balance breaches the nature of PhilHealth as a public insurer that pools member contributions in order to insure against risks. These pooled contributions are held by PhilHealth in trust for its members to be used in the future should any of the insured risks,
i.e.
, illnesses and other health-related concerns, occur.
Petitioners reiterate their prayer for the issuance of a status
quo ante
order, emphasizing that though the Court may later on order the return of the transferred amount, the huge amount to be paid back to PhilHealth would require appropriations by Congress in future national appropriations statutes. Meantime, people suffer opportunity cost for this delay because PhilHealth would be giving up the value of foregone benefits that it could have otherwise immediately provided to all its members.
Petitioners emphasize that as of December 31, 2024, the balance sheet of PhilHealth reflected PHP 1.25 trillion as total liabilities, which significantly exceeds its total assets of PHP 588.5 billion, meaning, PhilHealth was already incurring a total negative equity position of PHP 663.7 billion. Petitioners argue that this negative income and negative capital of PhilHealth is inconsistent with the assertion of the DOF that PhilHealth has excess funds
as PhilHealth is balance sheet insolvent. Petitioners predict that if PhilHealth would not adjust its policies or if the government were to cease appropriating funds to address PhilHealth's reserve gaps, PhilHealth's insolvency would lead to bankruptcy.
Petitioners assert that the DOF did not consider the Provision for Insurance Contract Liabilities (ICL) in computing the fund balance of PhilHealth.
Petitioners state as well that based on the financial statements of PhilHealth in previous years, all unused portions of its income were transferred and considered "reserve funds," which could not be utilized for purposes other than those under Section 11 of the UHCA.
Atty. Matula et al. submit that if PhilHealth does not have enough assets to cover the Provision for ICL, PhilHealth would be unable to fund the claims of both direct and indirect contributors, let alone, sustain their insurance operations. They further note that as of March 31, 2024, PhilHealth had PHP 1.251 trillion contingent liabilities including pending hospital claims.
PhilHealth, for its part clarifies
that: (1) the PHP 89.9 billion fund balance of PhilHealth was intended to be remitted to the National Treasury in four tranches,
viz
Particulars
Amount
Date of Remittance
1stTranche
20.0 B
May 10, 2024
2ndTranche
10.0 B
August 21, 2024
3rdTranche
30.0 B
October 16, 2024
4thTranche
29.9 B
November 20, 2024
Total
89.9 B
(2) PhilHealth is an attached agency of the DOH; (3) all Filipinos are automatically included in the NHIP; (4) PhilHealth Board Resolution No. 2899, Series of 2024, already increased the NHIP benefit package by 30%; (5) the sources of PhilHealth funds include those enumerated under Sections 11 and 37 of the UHCA; (6) the premium subsidy for indirect contributors is included annually in the GAA; (7) PhilHealth adopts the "one fund concept",
i.e.
, a general fund that is generally available to carry out all functions and activities of PhilHealth, regardless of source; and (8) premium contributions from direct contributors are recognized under "Members' Contributions Direct Contributor" while premium contributions of indirect contributions in the form of government subsidies are recognized under "Members' Contribution Indirect Contribution."
PhilHealth admits that some of their notable liabilities are Financial Liabilities, 95% of which pertains to Accrued Benefit Payables (i.e., claims in process at a given period), and Provision for Health Benefits (i.e., benefit claims already incurred but still in the possession of the health facilities and have yet to be submitted to PhilHealth). PhilHealth explains that the insufficiency of assets to cover the Provision for ICL means that the current contribution scheme of PhilHealth is insufficient to sustain the benefits and administration of the benefits availment of members in the future.
Even then, PhilHealth maintains that the fund balance transfer is not part of the "reserve funds" referred to under Section 11 of the UHCA.
None of its "reserve funds" or unused portion thereof is currently invested. It employs a laddering strategy in the investment of the National Health Insurance Fund (NHIF) to ensure that there are steady maturities occurring over a period of time. The cash flow streams from its investments are the main source of PhilHealth funding. After deducting its daily funding requirements, the remaining net invisible funds are reinvested by PhilHealth. For 2023, PhilHealth's investment portfolio stood at PHP 498.3 billion and earned PHP 20.7 billion. As of June 30, 2024, its investment portfolio was valued at PHP 504 billion with PHP 12.9 billion earnings.
The OSG, on the other hand, explains
that PhilHealth is an attached agency of the DOH. PhilHealth delivers individual-based health services, while the DOH is responsible for population-based health services under Sections 17 and 18 of the UHCA,
but no portion of the budget appropriated to the DOH is directed towards the programs of PhilHealth.
The OSG further informs the Court that the fund balance transfer shall be used to fund certain projects and programs under the unprogrammed appropriations of the 2024 GAA, such as:
(1) maintenance, repair, and rehabilitation of infrastructure facilities (routine maintenance of national roads);
(2) the Panay-Guimaras-Negros (PGN) Island Bridges Project;
(3) government counterpart of foreign-assisted projects;
(4) payment of right-of-way;
(5) strengthening assistance for government infrastructure and social programs;
(6) public health emergency benefits and allowance for health care and non-healthcare workers;
(7) management and supervision of peace process;
(8) payment of personnel benefits;
(9) priority social programs for health, social welfare and development, higher education, and technical and vocational education;
(10) revised Armed Forces of the Philippines modernization program;
(11) pension and gratuity fund; and
(12) financial subsidy for purchase of photovoltaic mainstreaming (solar home system) for rural electrification.
The OSG also clarifies that the PhilHealth fund balance, in particular, was computed by deducting the average two-year actual expenditure of PhilHealth in the amount of PHP 280.6 billion from PhilHealth's accumulated net income of PHP 463.7 billion, leading to the difference of PHP 183.1 billion. The entire sum of PHP 183.1 billion, theoretically, may be transferred to the National Treasury but the DOF exercised prudence by directing PhilHealth to simply return the smaller amount of PHP 89.9 billion, which represents the unutilized government subsidies to PhilHealth from 2021 to 2023:
In PHP Billions
FY 2021
FY 2022
FY 2023
TOTAL
Premium for indirect contributors
80.2
80.1
78.8
239.1
Less:
Benefit claims for indirect contributors
53.1
56.1
40.0
149.2
Net Flow Fund Balance
27.1
24.0
38.8
89.9
On PhilHealth's liabilities, the OSG expounds that the Provision for ICL is the difference between the Present Value of Future Outflows (i.e., benefit payments plus administrative expenses) and the Present Value of Future Inflows (i.e., premium collections plus interest earnings). It is not an actual obligation incurred by PhilHealth but an accounting construct to provide an estimate of potential obligations of PhilHealth in the future.
Thus, the Provision for ICL was not considered by PhilHealth and the DOF in computing the fund balance of PhilHealth, albeit this accounting construct represents PhilHealth's contingent liabilities. In any case, the OSG posits that there is no tangible operational or financial implication for PhilHealth if it does not have enough assets to cover the Provision for ICL.
The OSG points to the inordinately high levels of the Investment in Time Deposits (PHP 134 billion) and Investment Securities at Amortized Costs (PHP 336 billion) in the 2023 financial statements of PhilHealth, as sources of its "idle funds." The existence of these "idle funds" allegedly justified the transfer of PhilHealth's PHP 89.9 billion fund balance to the National Treasury.
Oral Arguments, Memoranda of the Parties, and Amici Curiae
By Resolution
dated November 12, 2024, the Court reset the oral arguments to February 4, 2025. Meanwhile, under its Revised Advisory
dated December 13, 2024, the Court appointed the following as
amici curiae:
(1) Former Secretary of Finance Mr. Margarito Teves (Secretary Teves), nominated by respondents; (2) Dr. Orville Jose C. Solon, Ph.D. (Dr. Solon), nominated by PhilHealth; (3) Mr. Sonny Africa (Mr. Africa), nominated by Atty. Colmenares et al.; (4) Dr. Beverly Lorraine C. Ho, M.D. (Dr. Ho), nominated by Pimentel III et al.; and (5) Ms. Zy-za Nadine N. Suzara (Ms. Suzara), selected
motu proprio
by the Court.
The Court held the first oral arguments on February 4, 2025, during which, each party was given an opportunity to present their arguments. Interpellations by Members of the Court took place on February 4 and 25, 2025, March 4, 2025, and April 2 and 3, 2025. On the last day of the oral arguments, the Court directed the parties to submit their respective memoranda within a nonextendible period of 30 days therefrom.
In compliance, the parties filed their respective memoranda,
essentially reiterating the arguments in their earlier pleadings.
In its memorandum, the OSG notably prays that should the Court strike down Special Provision 1(d) and DOF Circular No. 003-2024 as unconstitutional, the doctrine of operative fact be applied considering that the PHP 60 billion remitted by PhilHealth to the National Treasury was already utilized in good faith by the National Government for various health-related projects which can no longer be undone.
The OSG also submits that ordering the return of this amount would add fiscal pressure to the national deficit and would prevent the country from achieving its covered credit rating upgrade.
On the other hand, the
amici curiae
filed their respective memoranda, as follows:
Secretary of Teves
(Secretary Teves) emphasizes the need for a reasonable amount of unprogrammed appropriations to cover unforeseen events, given that the national budget is prepared one year in advance. Accordingly, unprogrammed appropriations allow projects to be potentially funded in the future, instead of being removed outright from the GAA. As such, the use of unprogrammed funds gives the national budget the flexibility to fund projects without resorting to additional borrowing.
He concludes that the secretary of finance complied with Special Provision 1(d) in issuing DOF Circular No. 003-2024 since it was done in close coordination with the relevant GOCCs to determine a reasonable amount called the "fund balance" that can be remitted to the National Treasury without jeopardizing the latter's operations.
In the case of PhilHealth, he believes that PHP 183.1 billion falls under the definition of a "fund balance," which represents the difference between PhilHealth's accumulated revenue of PHP 464.3 billion and its estimated two-year average projected expenditures of PHP 280.6 billion as determined by the PhilHealth Board. More, the remittance followed proper procedure as the PHP 89.9 billion was only remitted by PhilHealth after securing a favorable opinion from the OGCC, Governance Commission for GOCCs, and the Commission on Audit (COA).
On the economic and social justification, he posits that the PHP 89.9 billion was taken from the unutilized government subsidy in previous years and not from the members' contributions. Nonetheless, despite the decision to return PHP 89.9 billion to the National Government, PhilHealth recorded PHP 443.5 billion in accumulated revenues in 2024, which will be sufficient to cover the benefit packages to be given to the contributing members and indigents over several years. Therefore, on balance, the remittance of PhilHealth's funds was beneficial as it will enable some of the health-related and growth enhancement projects in the unprogrammed appropriations to be funded without having to resort to borrowing, which increases projected deficits and debt to the gross domestic product ratios. Indeed, of the first PHP 60 billion remitted by PhilHealth, 75% was spent on health-related needs and projects such as the public health emergency benefits, and allowances for health care and non-healthcare workers, while the balance of PHP 15 billion was used as counterpart funds for foreign-assisted projects.
He also points out that the Provision on the ICL amounting to PHP 1.1 trillion and PHP 266.9 billion for 2022 and 2023, respectively, are only part of the requirements of the Philippine Financial Reporting Standards (PFRS) and were based on a 40 to 50-year projections. In other words, the ICL does not represent the actual debts or liabilities of PhilHealth and is only used to reflect the worst-case scenario, which has never, and will never happen, since PhilHealth has never even incurred a loss.
He explains that the assailed government actions are being implemented to maximize the use of unutilized or idle funds to support the country's fiscal needs and have historical precedents from the time of the administration of then President Fidel V. Ramos (President Ramos)
and carried over to the administrations of former Presidents Gloria Macapagal-Arroyo (President Macapagal-Arroyo)
and Rodrigo Roa Duterte (President Duterte).
This system of fund management directs national agencies to operate with the understanding that they must fully use their budgets in accordance with their respective mandates. This management understanding allows the National Government to restore or even increase subsidies for PhilHealth in the future provided PhilHealth can demonstrate improved absorptive capacity to implement more generous benefits for the members.
Dr. Ho
explains that uncertainty in the health system before the advent of the UHCA, particularly the lack of transparency and predictable financing, prevents the full realization of universal health care in the country. The UHCA was enacted precisely to address this challenge of uncertainty by explicitly prescribing (1) benefits to every Filipino, (2) payment mechanisms for healthcare providers, and (3) identified and stable sources of financing.
She summarizes the 25 years' worth of benefit expansion of PhilHealth, as follows:
(1) on the average, only 40% of the total hospital expenses is covered by PhilHealth albeit covered inpatient diseases are broad. Of the 9,000 case rate packages, only 17 have been upgraded to Z benefits;
(2) covered outpatient diagnostic tests are only at 13 tests or around 7% of the 183 tests considered by the World Health Organization (WHO) as essential;
(3) covered outpatient drugs total to only 21 molecules or around 11% of the 189 drugs in the Philippines' Primary Care Formulary;
(4) covered primary care benefit package is limited;
(5) covered outpatient specialist care is also limited to certain conditions
and
(6) emergency services were only recently covered in 2024.
She opines that a stable source of financing is critical in reducing the uncertainty of benefit expansion or timely payout. The UHCA enabled PhilHealth to accumulate resources for aggressive benefit expansions, but to do so, PhilHealth must disavow any inaccurate and unfair claim of "savings" until its mandate shall have been accomplished. The opportunity to have a healthcare system that Filipinos can be proud of must be seized with urgency and decisiveness.
Mr. Africa,
executive director of IBON Foundation, emphasizes
that under the International Covenant on Economic, Social, and Cultural Rights of 1996 (ICESCR), the Philippines as a State Party has the duty to use all its available resources for the progressive realization of the people's right to health.
Under General Comment No. 14 (The Right to the Highest Attainable Standard of Health), a State which is unwilling to use the maximum of its available resources for the realization of the right to health violates its obligations under the covenant. Too, there is a violation of the right to health when the State adopts
"legislation or policies which are manifestly incompatible with pre-existing domestic or international legal obligations in relation to the right to health. . . violations of the obligation to fulfill occur through the failure of the States parties to take all the necessary steps to ensure the realization of the right to health by individuals or groups, particularly the vulnerable or marginalized."
He explains why PhilHealth must retain the PHP 89.9 billion to increase its benefits and programs under the UHCA:
First,
privatization has made health care more expensive, along with the rising cost of confinement in public facilities, the alarming trajectory of rising health care costs, and the worsening poverty in the country. In all, the share of household spending for health has dramatically increased since the enactment of the UHCA.
Second,
reducing PhilHealth funds has made it more difficult to achieve its already unmet targets under the UHCA. Rather than limiting its resources, the problem on PhilHealth's absorptive capacity should be addressed directly.
Third,
the resources of PhilHealth have been greatly diminished not only by the transfer of the PHP 89.9 billion, but also by the allocation of only PHP 61.5 billion under the 2024 GAA, the smallest amount appropriated for PhilHealth since 2018. Worse, the BCC struck out the proposed subsidy of PHP 74.4 billion for PhilHealth in the 2025 GAA.
Fourth,
the drastic budget cuts for PhilHealth and the depletion of PhilHealth's "reserve funds" prove the growing trend in the GAA of decreasing budgetary priority for health services and social services. It is unconscionable to prioritize infrastructure projects and divert scarce government resources away from socially critical spending, especially amid growing poverty and hunger in the country.
Fifth,
the use of fund balances of GOCCs arose from the substantial increases made by Congress to the amounts allocated for unprogrammed appropriations in the budget. From 2016 through to 2021, the allocations for unprogrammed appropriations reflected the amounts submitted to Congress through the NEPs. The Congress, however, recently increased by leaps and bounds this amount for unprogrammed appropriations by PHP 10 billion in 2022, PHP 219 billion in 2023 and PHP 449.5 billion in 2024. This trend raises the suspicion that allocations for programmed appropriations are purportedly transferred to unprogrammed appropriations to create fiscal space in the programmed appropriations for projects identified by legislators during the budget process and in whose implementation the legislators may be allegedly directly or indirectly involved.
Unprogrammed Appropriations
are part of the "budget" mentioned in Article VI, Section 25(1) of the Constitution whose appropriations Congress may not increase. This view is supported by Chapter 3, Sections 11 to 14 and Chapter 4, Section 24 of the Administrative Code of 1987.
Finally, the principle of rights-based budgeting should be institutionalized. The budget process is flawed since it is
"unable to systematically uphold the interests of the poor and low-income majority of Filipinos while, it is strongly suspected, open to abuse by narrow and self-serving interests."
Dr. Solon
states
that the amount to be transferred from PhilHealth to the National Treasury under the 2024 GAA and DOF Circular No. 003-2024 is not substantial enough to significantly affect the ability of PhilHealth to implement and improve the NHIP because:
one,
the amount is equivalent to only a small part of the total national health care spending;
two,
the amount represents excess revenues accumulated during the period 2021 to 2023, which remains unused; and
three,
PhilHealth is unlikely to spend this amount in 2025, given its sizeable reserves and especially when a medium-term benefit development plan is still in the works.
Dr. Solon notes that the accumulation of funds in PhilHealth can be attributed to PhilHealth's higher estimates of reserve ceilings than the previous years' average benefit spending while claim payments and operating expenses have marginal increases compared to accumulated reserves.
He thus submits that it may not be prudent to set reserve ceilings significantly more than the previous years' average benefit spending.
In his view, huge reserves reflect lost opportunities to deliver social risk protection or provide for public investments.
As regards PhilHealth's declared Provision for ICL, Dr. Solon states that this amount is typically part of reserves for insurance.
Based on standard practice, the Provision for ICL is the present value of future cash outflows (benefits and expenses)lessthe present value of future cash inflows (premiums),
which is based on assumptions on certain factors, such as, mortality and morbidity rates, relevant beneficiary behavior, asset default, expenses and inflation.
However, Dr. Solon observes that PhilHealth apparently based its Provision for ICL on the aspirations of the UHCA,
i.e.
, the cost of covering
all
services for
all
members thus setting its ICL approximately equal to the total national health expenditures. He posits that this target is absurd given that PhilHealth's share in the total national health spending is only about 11%.
Too, PhilHealth may have underestimated its future cash inflow considering its sovereign guarantee and provisions for financing under the UHCA. The Provision for ICL, based on PhilHealth's estimation, should not be used as an excuse to prevent benefits improvement or the accumulation of reserves.
Excluding its Provision for ICL, Dr. Solon states that PhilHealth, even without any additional premium collection, can sustain its operations for at least another 3.6 years based on the average claims for the last three years and its operating expenses.
Dr. Solon likewise underscores that while the NHIP has failed to become a major payor of health care in the country,
PhilHealth continues to accumulate
excess and unutilized
funds.
The accumulation of unused funds can be attributed to the following causes, among others: (i) gaps in PhilHealth's administrative capacity since its infrastructure is inadequate for it to undertake its roles as beneficiary representative and bulk payor of health services;
(ii) lack of alignment between incentives and benefit delivery since PhilHealth's operating budget is not linked to benefit delivery but is pegged to premium collections;
(iii) operational challenges in the implementation of the UHCA given that not all Filipinos are able to fully utilize the services under the NHIP albeit being covered because health care providers are inaccessible or unavailable;
and (iv) gaps and bottlenecks in the Philippine health care delivery system, which remains highly fragmented.
The persistence of excess funds,
i.e.
, accumulated revenueslessreserve funds, should serve as a strong indicator that PhilHealth is
"unable to provide the best level of protection against the financial burden of health care services."
Ultimately, underspending on public subsidies at the expense of benefit delivery, as in the case of PhilHealth, "represents missed opportunities in paying for health services and in providing financial risk protection, especially for the poor and vulnerable." The transfer of unused funds from PhilHealth to the National Treasury should send a signal to relevant government agencies to effectively spend public subsidies for their intended purpose.
Should these funds be retained by PhilHealth, the retention of these funds should be conditioned on structural reforms, otherwise excess funds would just continue to persist. Conversely, should the transfer of funds be allowed, said funds should nonetheless be utilized to address supply-side constraints in the healthcare delivery system.
Dr. Solon brings to the fore the following three reform actions: (i) the creation of a competent and technically equipped actuarial departn1ent in PhilHealth; (ii) linkage of its corporate budget to benefit delivery; and (iii) the channeling of the excess funds to support the establishment of health care providers in remote areas and the enhancement of their capacities.
In her Brief,
Ms. Suzara
discusses in detail the Philippine budget process. She explains that the technical process of formulating budget commences prior to the Budget Call issued by the DBM. Before the Budget Call, the Development Budget Coordinating Committee (DBCC)
formulates the medium-term fiscal program of the government and approves the annual fiscal program to support the Budget. The fiscal program consists of the aggregate level of revenues from both tax and non-tax revenues, disbursements (or expenditures), and financing level that is needed to plug the budget deficit. Based on the fiscal program, the DBCC advises the President on the appropriate level of the government's expenditure program; and recommends to the President a proper allocation of expenditures for each development initiative. The approved fiscal program by the DBCC becomes the framework on how the NEP will be formulated.
At the start of the fiscal year or in the last quarter of the previous fiscal year, the Budget Call is issued by the DBM through the National Budget Memorandum (NBM), as well as a separate NBM outlining the Budget Priorities Framework. These two issuances set the parameters, procedures, and timeline to guide the National Government agencies and departments in preparing their respective budget proposals. Also, a Budget Forum is conducted by the DBM to brief agencies about the fiscal program. Departments and agencies of the National Government will then formulate their budget proposals, ensuring alignment to the development priorities of the President, and national plans and programs based on their respective mandates. Thereafter, these budget proposals are submitted to the DBM through an online facility.
Once the DBM receives all budget proposals from departments and agencies of the National Government, the DBM will conduct two levels of technical budget hearings:
first,
an agency will present its budget proposal to the DBM technical bureau in charge of its budget; and
second,
the DBM technical bureaus will present their recommendation to the DBM secretary and senior officials.
The
budget preparation
spans around six monthsfrom the Budget Call to the consolidation by the DBM of the proposed Budget, until its presentation by the DBCC to the President and the members of the Cabinet for discussion and approval.
When the President approves the Budget, the respective agency budgets are confirmed by the heads of the agencies and departments of the National Government. These confirmed agency budgets will be consolidated into the NEP and the BESF. The NEP and the BESF will then be submitted by the President to Congress.
Our budget process may be visually summarized, as follows:
Ms. Suzara clarifies that the annual budget is composed of (1) Automatic Appropriations;
(2) New General Appropriations,
which consist of (i) Programmed Appropriations
and (ii) Unprogrammed Appropriations.
Ms. Suzara observes that historically, the level of Unprogrammed Appropriations in the enacted version of the Budget does not deviate from its proposed level in the NEP, except for fiscal years 2022, 2023, and 2024. Specifically, in the 2024 Budget, Congress fully or partially defunded multiple programs of various departments and agencies of the National Government from the Programmed Appropriations and reallocated them to the Unprogrammed Appropriations. This budget reallocation resulted in an excess of PHP 450 billion worth of programs and projects under the Unprogrammed Appropriations. Thus, from a proposed level of PHP 282 billion in the 2024 NEP, the Unprogrammed Appropriations ballooned to PHP 732 billion in the 2024 GAA.
Ms. Suzara opines that the 2024 Budget showed that the freed up fiscal space in the Programmed Appropriations went to departments where the hard and soft projects of legislators are traditionally lodged, such as local infrastructure projects of the Department of Public Works and Highways (DPWH).
She describes this as a "new scheme of massively funding pork barrel" and circumvents the Court's ruling inBelgica v. Ochoa.
Finally, Ms. Suzara submits that Special Provision 1(d) and DOF Circular 003-2024, should be declared unconstitutional. Special Provision 1(d) violates both the earmarking provision of the Sin Tax Laws and the prohibition against transferring any portion of PhilHealth's "reserve fund" under the UHCA.
On October 8, 2025, the OSG submitted its Motion for Leave to File and Admit Manifestation and Motion, praying that the Petitions be dismissed for mootness in view of the announcement of President Marcos, Jr. that the PHP 60 billion excess funds of PhilHealth will be returned to the latter, and that the DBM is currently working with the Congress and the Executive to implement such restoration.
Issues
First.
Are the requisites for a valid exercise of the expanded power of judicial review present?
Second.
Is the 2024 GAA unconstitutional for bearing the certification of urgency by the president despite the alleged absence of a public calamity or emergency?
Third.
Are Special Provision No. 1(d) and its implementing DOF Circular No. 003-2024 unconstitutional?
a) Is Special Provision No. 1(d), as implemented by DOF Circular No. 003-2024, an unconstitutional rider or inappropriate provision in the 2024 GAA?
b) Does the transfer of PhilHealth funds to the National Treasury violate the people's right to health, Section 11 of the UHCA, the Sin Tax Laws, and Article VI, Section 29(3) of the Constitution?
c) Is the DOF authorized to direct the transfer of savings of GOCCs back to the National Treasury under Article VI, Section 25 of the Constitution?
Fourth.
Does DOF Circular No. 003-2024 violate Section 70 of the 2023 GAA insofar as it orders the transfer of PhilHealth funds the National Treasury before December 30, 2024?
Fifth.
May alleged culpability for technical malversation and/or plunder in the so-called illegal transfer of PhilHealth funds be adjudged in the present cases?
Sixth.
May petitioners properly seek guidelines from the Court on how and when the President may exercise his or her power to certify a bill for immediate enactment?
Seventh.
Assuming that Special Provision 1(d) and DOF Circular No. 003-2024 are declared unconstitutional, may the Court order the return of the PHP 60 billion PhilHealth funds that have already been transferred to the National Treasury in 2024?
There are other issues raised in the petitions specifically pertaining to the creation, powers, and actions of the BCC vis--vis the enactment of the 2024 GAA, including the inclusion of unprogrammed appropriations or budgetary allocations for items or amounts not provided in the NEP. Significantly, the same legal questions are the core issues involved in G.R. No. 277975 titled
Rodriguez, et al. v. House of Representatives, Senate of the Philippines, and Executive Secretary Lucas P. Bersamin;
and G.R. Nos. 271059 & 271347 titled
Lagman v. Congress, et al.
Thus, in order not to preempt our actions on these twin cases, the Court defers its full discussion and resolution of the aforesaid legal issues in G.R. No. 277975 and G.R. Nos. 271059 & 271347, respectively.
Our Ruling
At the outset, the Court has resolved to drop the President as a respondent in G.R. No. 275405
Foremost, the Court has resolved to drop President Marcos, Jr. as a respondent in G.R. No. 275405. He is immune from suit. We have so decreed in our Resolution
dated February 11, 2025. In
De Lima v. President Duterte,
the Court has lengthily discussed the origin and concept of presidential immunity from suit and affirmed that in the Philippines, the incumbent President may not be sued during his or her tenure, regardless of whether the suit arose from his or her official acts.
As the incumbent sitting president, therefore, President Marcos, Jr. should not be sued as a respondent here. So must it be.
We now tackle the aforestated procedural and substantive issues.
All requisites for the exercise of the expanded power of judicial review are present
Once again, the Court is called upon to exercise its extraordinary power of judicial review as part of the grand design of the Constitution's principle of checks and balances to determine the constitutionality of the assailed acts of its co-equal branchesthe Legislative and the Executive.
Article VIII, Section 1 of the Constitution vests the Judiciary with the expanded power of judicial review, empowering courts not only to settle actual controversies but to also determine grave abuse of discretion by any government branch or instrumentality, thus:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and
to determine whether or not there has been a grave abuse of discretion amounting to Lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
(Emphasis supplied)
This expanded jurisdiction was enacted into the constitutional framework not only as a power but also as a
duty
which cannot be abdicated when the political question doctrine is invoked.
The Court has enforced this constitutional mandate of curbing grave abuse of discretion by any branch of government.
A Rule 65
certiorari
petition is the remedy for invoking this mandate.
Consistent with the requisites of a Rule 65 petition, the Court's exercise of this expanded power of judicial review is limited to a determination of grave abuse of discretion. It does not contemplate errors of law
but palpable errors of jurisdiction, violations of the Constitution, the law and jurisprudence, and gross misapprehension of facts.
Indeed, the Court's expanded power of judicial review is so extraordinary that the mere invocation of the political question doctrine does not bar the Court from exercising this power. A political question exists when the issue does not call on the Court to adjudicate legality but to determine the wisdom or unwisdom or the desirability or undesirability of a law or a governmental act.
In several cases, the Court even disregarded the plea for judicial restraint arising from the invocation of the political question doctrine when constitutional boundaries must be properly allocated.
For instance, the Court in
Belgica v. Ochoa
ruled on budget-related reforms legislated by political branches despite objections based on the political question doctrine, thus:
It must also be borne in mind that
"when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; does not in reality nullify or invalidate an act of the legislature [or the executive], but only asserts the solemn and sacred obligation assigned to it by the Constitution."
To a great extent, the Court is laudably cognizant of the reforms undertaken by its co-equal branches of government.
But it is by constitutional force that the Court must faithfully perform its duty.
Ultimately, it is the Court's avowed intent on that a resolution of these cases would not arrest or in any manner impede the endeavors of the two other branches but, in fact, help ensure that the pillars of change are erected on firm constitutional grounds. After all, it is in the best interest of the people that each great branch of government, within its own sphere, contributes its share towards achieving a holistic and genuine solution to the problems of society.
For all these reasons, the Court cannot heed respondents' plea for judicial restraint.
(Emphasis supplied)
Francisco, Jr. v. House of Representatives
ordained that the standard by which to determine if a case is justiciable despite the invocation of the political question doctrine is to inquire whether the power or functions have been conferred upon political bodies; and if so, the courts are duty-bound to examine whether the branch or instrumentality of the government properly acted within these limits.
Here, the issues require the Court to determine the constitutional boundaries set on the power of the purse lodged exclusively in the Congress and the power of the President to faithfully execute the laws and certify urgent bills. The Court's exercise of its expanded judicial power to review the acts of political bodies does not offend the separation of powers, but in fact upholds the Court's duty to ensure that pillars of change are erected on firm constitutional grounds.
As such, we cannot sustain respondents' argument that the current issues are beyond the jurisdiction of the Court for being allegedly allocated to the wisdom of political bodies alone. For whether there are already boundaries set by law regarding the exercise of the powers of political bodies and whether these boundaries have been breached are issues open to our expanded power of judicial review.
However, our jurisdiction to adjudicate the issues in these cases does not mean that we have to exercise the same. There are requisites for the exercise the Court's expanded power of judicial review,
viz
.: (1) an actual case or controversy; (2) a personal and substantial interest of the party raising the constitutional question; (3) the exercise of judicial review is pleaded at the earliest opportunity; and (4) the constitutional question is the verylis motaof the case. Only when these requisites are satisfied may the Court rule upon the constitutionality or unconstitutionality of an assailed act.
The Court holds that the four requisites for the exercise of its expanded power of judicial review are all present here.
One.
An actual case or controversy exists when there is a conflict of legal rights or an assertion of opposite legal claims between the parties that is susceptible or ripe for judicial resolution. The contrariety of legal rights must be one that can be interpreted and enforced on the basis of existing laws including jurisprudence. This controversial status should be distinguished from a hypothetical or abstract difference or dispute when the litigants simply have a difference of