The alarm raised by health sector advocates over the redirection of nearly P90 billion in Philippine Health Insurance Corp. (PhilHealth) funds to the national treasury underscores a grave issue of governance and public trust.
This controversial move, ordered by the Department of Finance (DOF), appears to contravene laws designed to protect the interests of PhilHealth members, who have already seen their contributions rise from 4 percent to 5 percent of their monthly income.
Questions and Clamor
Dr. Anthony C. Leachon, a former special adviser to the Department of Health, has rightly pointed out that transferring P89.9 billion in unused PhilHealth funds to the national budget undermines the intent of the Universal Health Care (UHC) Act.
The UHC Act clearly states that excess PhilHealth funds should be used to enhance the program’s benefits and reduce members’ contributions.
The law unequivocally prohibits any portion of the reserve fund from being transferred to the general fund of the national government.
Yet, this is precisely what has occurred under the DOF’s directive.
Filomeno Sta. Ana III, executive director and co-founder of Action for Economic Reforms, has echoed Leachon’s concerns, vehemently opposing the transfer of PhilHealth funds.
Sta. Ana has also criticized PhilHealth management for failing to utilize these excess funds to improve member benefits and reduce premiums, describing this as gross negligence and incompetence.
At the heart of this issue is Circular No. 003-2024, issued in line with a contentious provision in the 2024 General Appropriations Act (GAA).Â
This provision permits the return of excess funds from government-owned and -controlled corporations (GOCCs) to the national treasury for “unprogrammed” projects. Dr. Leachon has argued that reallocating health funds for unrelated government expenses is a misappropriation of contributors’ money.
PhilHealth has defended the transfer, citing board approval and adherence to the 2024 GAA and DOF directives.
The DOF has justified its action by claiming that the national government can better utilize these funds for programs that directly benefit the Filipino people and advance UHC goals, highlighting the allocation of P27.5 billion for COVID-19 service allowances for frontliners.

Image screenshot from Philippine Daily Inquirer
However, what is legal is not always moral or appropriate.Â
This is particularly true given the 25 percent increase in member contributions and PhilHealth’s ongoing challenges in expanding its benefits.
Redirecting PhilHealth funds for other purposes undermines the sacrifices of its members, many of whom are financially strained citizens relying on these contributions for their healthcare needs.
Using PhilHealth funds to pay the long-overdue COVID-19 benefits of medical frontliners is unjustifiable, as it is the national government’s responsibility, not that of PhilHealth’s paying members, to cover these expenses.
The Marcos administration should reconsider this approach.
By removing the controversial GAA provision in the 2025 budget, clearly defining high-impact projects with specified funding, and respecting the designated use of GOCC funds like those of PhilHealth, the government can help restore public trust.
PhilHealth members, especially the poorest who depend on it for their healthcare, deserve no less.