G.R. Nos. 274778, 275405 & 276233 - Separate Opinion Concurring

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]

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.

BAYAN MUNA CHAIRMAN NERI COLMENARES, BAYAN MUNA VICE CHAIRMAN TEODORO A. CASIÑO, 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.

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.

I concur with the ponencia that the reversion of the Philippine Health Insurance Corporation (PhilHealth) funds to the National Treasury under Special Provision No. 1(d) of the 2024 General Appropriations Act (GAA), as implemented by Department of Finance (DOF) Circular No. 003-2024, is unconstitutional. Aside from being inappropriate, I submit that Special Provision No. 1(d) is a prohibited rider under Section 25(2), Article VI of the Constitution because it is also ambiguous. I also write separately to underscore the implications of this case on health system governance and fiscal discipline.

PhilHealth was created under Republic Act No. 7875,1 or the National Health Insurance Act of 1995, as the national health insurance agency mandated to ensure that all Filipinos are automatically covered by the National Health Insurance Program (NHIP).2

More than two decades later, the Congress enacted Republic Act No. 11223, or the Universal Health Care Act (UHCA),3 instituting comprehensive healthcare reforms and strengthening PhilHealth's role within the broader goal of universal healthcare. The law set out the following general objectives:

(1) Progressively realize universal health care in the country through a systemic approach and clear delineation of roles of key agencies and stakeholders towards better performance in the health system; and

(2) Ensure that all Filipinos are guaranteed equitable access to quality and affordable health care goods and services and protected against financial risk.4

Under Section 8 of the UHCA, membership in the NHIP is of two types – direct and indirect contributors. Direct contributors are those with capacity to pay premiums, are gainfully employed or are self-earning, lifetime members, and their dependents;5 while indirect contributors are those not included in the foregoing and whose premiums are subsidized by the government because of financial incapacity or by reason of coverage by special laws.6 The law emphasizes the principles of equity and solidarity in health care financing, and access to health for vulnerable populations.7

The UHCA reiterates PhilHealth's duty to ensure the automatic inclusion of every Filipino into the NHIP and mandates the development of a comprehensive benefit package, as recommended by the Health Technology Assessment Council (HTAC).8 PhilHealth is also tasked to regulate, in coordination with the Department of Health (DOH), the co-payments and co-insurance for amenities in public hospitals;9 oversee the quality, safety and equity of services through rating systems and incentives; and monitor health facilities' compliance with co-payment and quality standards.10 Meanwhile, the PhilHealth Board is responsible for policy direction, budgeting, financial oversight and personnel management, with the President executing day to day operations under Board supervision.11

Section 10 of the UHCA, which provides for a staggered increase in premium rates from years 2019 to 2025, mandates PhilHealth to provide direct contributors with a corresponding increase in benefits for every increase in the rate of contributions. It further obliges the State to fully subsidize the premium contributions of all indirect contributors, which subsidy shall be included annually in the General Appropriations Act (GAA), the funds to be released to PhilHealth.

The funds reverted under the questioned DOF Circular No. 003-2024 were part of the appropriations for premium subsidies for indirect contributors12 – typically the poorest and marginalized Filipinos, namely, indigents,13 senior citizens14 and persons with disability.15 The DOF Letter, dated April 24, 2024, instructed PhilHealth to remit the fund balance of PHP 89.9 Billion to the Bureau of Treasury (BoT), the same being alleged excesses for the years 202 I to 2023 from the government subsidy for the premium contributions.16 Said subsidies, which the National Government appropriated for PhilHealth for payment of the premium contributions of indirect members, are from excise tax collections earmarked for PhilHealth and the implementation of universal healthcare, as provided in Section 3717 of the UHCA; and Section 8 (C) of Republic Act No. 1035118 and Section 288-A of Republic Act No. 1134619 (the Sin Tax Laws). Such funds, appropriated and earmarked for a statutory purpose, are thus impressed with a trust character,20 meant exclusively to fulfill the State's constitutional and statutory obligation to provide healthcare.

The impact of the fund reversion is severe. By removing critical financing for premium subsidies, the State effectively undermined PhilHealth's capability to deliver on its universal healthcare obligations, disenfranchising millions of indirect contributors.

As of December 21, 2023, PhilHealth reported a total of 108,505,167 beneficiaries (members and their dependents),21 consisting of 66,666,112 direct contributors and 41,839,055 indirect contributors.22 This means indirect contributors make up about 38.6% of the total PhilHealth beneficiaries. The indirect contributors comprise of 26,190,883 indigent beneficiaries,23 12,583,683 senior citizens,24 and 3,064,489 sponsored program beneficiaries.25

In identifying the indigent persons to be enrolled under the NHIP, PhilHealth adopted the Department of Social Welfare and Development (DSWD)'s National Household Targeting System for Poverty Reduction (NHTS-PR) otherwise known as the Listahanan.26 Listahanan 3 (2021),27 the most recent nationwide household assessment completed and the basis for PhilHealth's 2023 indigent classification,28 identified 30,397,224 individuals residing in a poor household, or 45% of the 67,011,704 individuals assessed.29 Of these 30,397,224 poor individuals, 15,698,419 are male and 14,698,805 are female, while 45.2% or 13,739,545 individuals were identified as dependents below 15 or above 64 years old.30

Considering the 26,190,883 indigent beneficiaries reported by PhilHealth, it is apparent that PhilHealth has not yet achieved full coverage of the poor as identified by the latest Listahanan. This leaves a coverage gap of approximately 4,206,341 poor Filipino men, women and children who remain without subsidized PhilHealth protection. This coverage gap may be even wider, as the Listahanan does not yet assess all Filipinos, and more households may have fallen into poverty since the last assessment in 2021. The reverted funds could have enrolled millions more indigent families, senior citizens and other vulnerable groups, thereby closing a significant portion of the coverage gap among Filipinos living below the poverty line.

To put things into perspective, the Philippines spent over PHP 1 trillion in health care services in 2022. A bulk of this total health spending is paid from family out-of-pocket sources, which is an inefficient and inequitable health financing source.31

ln 1999, the DOH Health Sector Reform Agenda set a target that within five years, or by 2004, the Philippine National Health Insurance Program should have been paying for at least 30% of total health spending. When the target was missed, the DOH Health Care Financing Strategy 2023-2028 lowered the target to 27% by 2028 – a much lower figure which is still yet to be achieved.32

Thus, while the amount may pale in comparison to the country's total health care spending, had the PHP 89.9 billion in PhilHealth reserve funds been utilized in accordance with law, the amount could have been deployed directly for the expansion of health coverage and the payment of legitimate obligations to service providers.

Further, according to the Amicus Curiae Brief of Prof. Orville Solon, the PHP 89.9 billion is equivalent to 50%, 27% and 24% of the government premium subsidies for indirect contributors for 2021, 2022 and 2023, respectively.33 Thus, funds taken from PhilHealth and reverted into the national fund could have had a direct impact on the health care needs of indirect contributors – indigents, senior citizens and persons with disabilities – whom the UHCA prioritizes as subsidized members due to heightened barriers to care.

To further illustrate the impact of the fund transfer, one may look to the Amicus Curiae Brief of Sonny Africa, which referenced the mean cost of confinement in hospitals according to the 2022 National Demographic Health Survey.34 For private hospitals it was PHP 70,568.00, while public facilities have a mean cost of PHP 27,136.00, with the overall mean cost of hospital bills coming out to PHP 46,640.00. However, the mean costs paid by PhilHealth are only around PHP 17,507.00 for hospital bills regardless of the type of facility. At an average of PHP 46,640.00 per person for a single hospital bill, the PHP 89.9 billion equates to free hospital confinement for nearly 2 million Filipinos.35 As the Amicus Curiae Brief of Dr. Beverly Ho (Dr. Ho) underscored, PhilHealth covered only about 40% of in-patient bills in 2022,36 a shortfall that these funds could mitigate.

From another perspective, the Amicus Curiae Brief of Prof. Orville Solon presented data showing that, setting aside Insurance Contract Liabilities, PhilHealth reserves and investments alone can sustain at least 3.6 years of benefit payments and operations on average claims plus operating expenses, without any additional premium collection from direct contributors or government subsidiaries.37

Apart from subsidizing additional members, the PHP 89.9 billion could also have been lawfully applied to expand the benefit packages under the NHIP, consistent with Section 1138 of the UHCA, which requires that excess reserves be used either to increase benefits or reduce contributions.

In her Brief, Dr. Ho highlighted the material limitations of PhilHealth's coverage.39 Of the roughly 9,000 case rate packages, a mere 17 have been upgraded to Z benefits, which support the entire clinical pathway from diagnosis to recovery. Outpatient coverage is even narrower: only 13 diagnostic tests are included, representing just 7% of the 183 diagnostic tests that the World Health Organization (WHO) identified as "essential" in 2023. Similarly, only 21 drug molecules are covered – about 11% of the 189 listed in the Philippines' Primary Care Formulary. The primary care benefit package itself is confined to fever, allergic reactions, dehydration and common conditions such as hypertension, diabetes, dyslipidemia and asthma. Specialist outpatient care is restricted to physical medicine and rehabilitation, assistive mobility devices, mental health, oral health, HIV, tuberculosis, malaria, children with visual and developmental disabilities, hearing and mobility impairments, and surgical contraception such as vasectomy and ligation.40

The effect of PhilHealth's fiscal strain is not limited to the care it provides. Even healthcare providers accredited by PhilHealth are affected, since they are currently paid only after each service has been rendered. This results in uncertain revenues, which are, in turn, caused by an unorganized patient base, variable duration of payment and non-certainty as to the approval of claims. Once again, the burden ultimately falls on the patients, who bear the brunt in the form of higher out-of-pocket payments levied to augment whatever amount PhilHealth is able to cover.41

PhilHealth's Audited Financial Statements as of December 31, 2023 disclosed that one of the accounting estimates made is the setting up of accrued benefit expense for Incurred But Not Yet Paid (INBP) claims.42 These claims are categorized as follows:

Based on the foregoing, the 2023 PhilHealth Audited Financial Statements reflects an Accrued Benefits Payable balance of PHP 37 billion. According to Note 17.4 of PhilHealth's Notes to the Financial Statements for the year 2023, this amount represents accrued expenses from claims filed by members or HCIs that have been received by PhilHealth but remain unprocessed and unpaid.44

Of the PHP 37 billion, PHP 32.037 billion pertains to ICS or estimated benefit claims still in process, while PHP 132 million represents the amount actuarially estimated to be outstanding claims. The remaining balance consists of claims awaiting payment.

ln addition to Accrued Benefits Payable, the Audited Financial Statements also present a Provision for Health Benefits amounting to PHP 57.507 billion as of December 31, 2023. Of this amount, PHP 54.994 billion corresponds to IBNR claims which are actuarially estimated to be in the possession of HCIs as of the end of the month and have yet to be submitted to PhilHealth within the allowable 60-day period after the date of discharge per Corporate Order (CO) No. 2015-0017, dated December 8, 2015.45 The remaining PHP 2.5 billion represents provisions for denied claims, which are actuarially estimated and may still be paid pending motions for reconsideration filed by health facilities.46

However, the COA noted that the reported amounts for Accrued Benefit Claims Payable and Provision for Health Benefits were unreliable due to inadequate monitoring and reporting mechanisms.47

Despite this concern, PhilHealth recognized a reduction in its Benefit Claims Expenses following adjustments to INBP, as computed by its Actuary.48 The DOF subsequently deducted the Benefits Claim Expenses for Indirect Contributors from the Premium for Indirect Contributions to arrive at PhilHealth's Fund Balance, which totaled PHP 89.9 billion.

Given the substantial obligations of PhilHealth and the uncertainty surrounding the estimates for unpaid claims, a more prudent action would have been to address the potential misstatements in the reported balances and reserve sufficient funds to ensure the timely payment of its claims.

In this context, the reversion of PhilHealth funds, despite their clear earmarking for the NHIP, is not only legally impermissible but fundamentally disruptive to the UHCA's framework. The core mechanism through which the State fulfills its healthcare obligations is undermined, and the financial integrity of the UHC System threatened, at a time when public reliance on PhilHealth's services remains critical.

The subject reversion of PhilHealth's funds not only undermines the fulfillment of universal healthcare, it also contravenes existing law.

As established during the Oral Arguments on this case,49 PhilHealth's funds are created by law as a special fund dedicated exclusively to financing universal healthcare for Filipinos. The statutory sources of PhilHealth's funding underscore its special and protected character, distinct from the general funds of the government. These sources include:

These funding sources all feed into the National Health Insurance Fund administered by PhilHealth, expressly established to provide for universal healthcare coverage. By statutory design, it is clear that PhilHealth's funds are special funds devoted solely to health insurance purposes. As such, under Section 29(3),54 Article VI of the Constitution, said funds cannot be diverted to any other end until the purpose for which the special fund was created 1s fulfilled or abandoned.

Section 1155 of the UHCA governing PhilHealth's "reserve funds" provides even stricter parameters for its use. PhilHealth is required to set aside a portion of its accumulated revenues, not needed to meet the cost of the current year's expenditures, as a reserve for anticipated claims, with a maximum ceiling equivalent to two years' worth of projected program expenditures. If reserves exceed this ceiling at the end of a fiscal year, Section 11 expressly provides that the excess must be used to increase the Program's benefits and to reduce the amount of members' contributions. Any unused reserves are to be invested following strict guidelines, primarily in government securities, high-quality corporate bonds, deposits and selected stocks, subject to risk management and oversight by the PhilHealth Board.56

Critically, Section 11 explicitly prohibits any part of the reserve or its income from accruing to the general fund of the National Government, or any of its agencies or instrumentalities, including government-owned and -controlled corporations.57 This categorical proscription reflects the legislature's intent to shield PhilHealth funds from being absorbed into the Treasury or repurposed elsewhere.

Thus, by both constitutional principle and statutory command, PhilHealth's monies are segregated for healthcare use and protected from reallocation.

The special fund nature of PhilHealth's budgetary resources has been consistently recognized. They are funds held in trust for the health needs of the Filipino people, not a surplus fiscal pool to be tapped at will. The Congress itself, in crafting the UHCA and Sin Tax Laws earmarks, has legislated that these monies be used exclusively for improving health services and achieving universal health coverage. There is no doubt that the purpose for which these funds were appropriated – universal healthcare – remains urgent and ongoing, and has neither been accomplished nor abandoned. Indeed, universal healthcare is a continuing program, far from "fulfilled" in a country still striving to extend basic health services to all citizens. Absent a fulfillment or lawful abandonment of the UHC Program, the undersigned concurs with the ponencia that diverting PhilHealth's dedicated funds violates the constitutional injunction that special funds be used solely for their intended purpose.58

Reallocation of "excess fund balances" or "unutilized funds" under Special Provision 1 (d)

The Executive Branch, through the Department of Budget and Management (DBM) and the DOF, categorized a portion of PhilHealth's money as "excess fund balances" or "unutilized funds" that could be swept back into the National Treasury. The DOF determined that about PHP 89.9 billion of PhilHealth's resources constituted an "accumulated surplus" from prior years' budgetary subsidies. This figure was computed by totaling the national government subsidy releases to PhilHealth for the premiums of indirect contributors from 2021 to 2023 and subtracting the amount of PhilHealth benefit payments made for those members in the same period. The remainder, PHP 89.9 billion, was deemed an unutilized balance of government funds, allegedly sitting idle in PhilHealth's coffers.

DOF Circular No. 003-2024 accordingly defined "fund balance" as the unrestricted cash and investments of GOCCs, including government subsidies that remain unspent. By this definition, the unused portion of the government subsidies given to PhilHealth was classified as part of the corporate "fund balance" that could be tapped. The DBM and the DOF essentially characterized these amounts as surplus pubIic funds, analogous to year-end "savings" of an agency, which they argued could be mobilized for other urgent programs.

This characterization is flawed both in law and fact. Labeling PhilHealth's unexpended funds as "savings" or general "fund balance" ignores the distinct legal status of those monies as trust funds for a continuing purpose. In budgetary parlance, "savings" refers to portions of appropriations that officially remain unused after the completion, discontinuance, or abandonment of the work or purpose for which the funds were allocated. Here, the appropriations in question were the annual subsidies intended to finance health insurance coverage for certain population sectors, i.e., indirect contributors. These appropriated amounts were released to PhilHealth and formed part of the National Health Insurance Fund to pay for future claims for covered beneficiaries. Again, at no point has the purpose of the appropriation been completed or abandoned – the insured beneficiaries continue to exist, and their medical needs are ongoing. The fact that some of the funds were not immediately spent within the fiscal year does not mean they are "excess" in an absolute sense; rather, they are allocated to pay for future or still-pending claims and to ensure actuarial stability of the insurance program. Under the UHCA, PhilHealth must carry over such unspent subsidies to succeeding years as part of its reserves to guarantee that it can pay claims and expand benefits.

The Executive Branch's own recent fiscal jurisprudence underscores that funds cannot be declared "savings" arbitrarily or prematurely. In Araullo v. Aquino III,59 the Court struck down the practice of declaring unobligated appropriations as "savings" in the middle of the fiscal year without the authorized conditions being met. The Court emphasized that the power to juggle appropriated funds is tightly constrained: only when the intended programs have been fulfilled or legitimately discontinued can leftover funds be considered savings available for augmentation. By analogy, PhilHealth subsidies at issue here cannot be deemed "free" or "unobligated" funds while the very purpose for which they were appropriated—universal health coverage—remains in progress.

The respondents contend that what they swept were not technically "savings" as defined in the GAA, but "unutilized fund balances," implying a category of idle GOCC cash outside the usual budget execution rules. This is a distinction without difference. The constitutional prohibition on unauthorized fund transfers is not confined to items formally labeled as "savings;" it broadly forbids any reallocation of appropriated monies absent legal authority and compliance with strict conditions. The Executive cannot circumvent constitutional spending limits by simply inventing new labels for public funds. Whether termed "excess fund balance" or "savings," the fact remains that these PhilHealth monies were appropriated by Congress for a specific purpose – funding the NHIP, were released to fulfill that purpose, and have not been used up solely because the need they address is ongoing and longitudinal. They are committed funds, not windfalls.

Indeed, PhilHealth's supposed "excess" reserve must be viewed in light of its actuarial obligations. PhilHealth is required by law to maintain reserves up to a two-year buffer of projected expenditures. The PHP 89.9 billion identified as "unused" corresponds to roughly the amount needed to cover a little over one year of PhilHealth benefit payments, given its expenditure levels. Thus, that money is hardly excessive or unneeded; rather, it shores up the Fund's stability and permits the expansion of benefits mandated by the UHCA when reserves exceed the ceiling. In truth, the only lawful way to handle true excess beyond the reserve ceiling is already provided by the UHCA: increase benefits and reduce premiums, thereby plowing the surplus back into improving UHC coverage. The Executive Branch's re-characterization of the funds as generic "balances" available for reallocation runs afoul of this clear statutory directive.

In sum, the classification of PhilHealth's unspent funds as disposable surplus or "savings" is contrary to the UHCA and the constitutional definition of savings. These monies are not idle funds of a GOCC that can be plucked for unrelated uses, but funds in trust for a dedicated public health purpose. Rebranding them as "fund balance" does not erase the legal conditions attached to their use.

As to Special Provision No. 1(d) which defined the concept of "fund balance," the same qualifies as a prohibited rider under Section 25 (2), Article VI of the Constitution:

Section 25. [...] (2) No provision or enactment shall be embraced in the general appropriations bill unless it relates specifically to some particular appropriation therein. Any such provision or enactment shall be limited in its operation to the appropriation to which it relates.

In Atitiw v. Zamora,60 the Court explained that the prohibition against. riders in appropriations bills mirrors the "one subject in the title" rule in Article VI, Section 26(1), which mandates that all provisions in a bill must be germane or relate to its stated subject. This rule ensures legislative unity, prevents log-rolling, and protects against surprise or fraud, while keeping the public informed of proposed legislation.61

Thus, all provisions in a general appropriations bill must either be appropriation items or directly relate to them. Non-appropriation clauses are permissible only if they impose conditions or restrictions on how the appropriated funds are to be used.

To determine whether a provision or clause in a general appropriations bill is germane, the Court declared in Atitiw that it must be particular, unambiguous, and appropriate. A provision or clause is particular if it relates specifically to a distinct item of appropriation in the bill and does not refer generally to the entire appropriations bill. It is unambiguous when its application or operation is apparent on the face of the bill, and it does not necessitate reference to details or sources outside the appropriations bill. It is an appropriate provision or clause when its subject matter does not necessarily have to be treated in a separate legislation.62

Applying these standards, I respectfully submit that while Special Provision No. 1(d) is particular, it is neither unambiguous nor appropriate. The assailed provision reads:

Special Provision No. 1(d) satisfies the requirement of particularity as it specifically relates to additional sources of revenue for unprogrammed appropriations. It is my humble view that the assailed provision is ambiguous as it requires reference to sources outside of the appropriations bill.

Critically, Special Provision No. 1(d) introduces the concept of "fund balance" which is not defined in the 2024 GAA. It was simply described as the "remainder" which will be obtained after the review and reduction of the GOCC's reserve funds to reasonable levels taking into account disbursement from prior years. The components of the so-called "fund balance" are unclear. First, the concept of "reserve funds" of GOCCs is undefined. Additionally, the term "reasonable levels" is vague and lacks objective criteria and the process for reviewing and reducing reserve funds is unspecified. The ambiguity is further underscored by the requirement to the DOF to issue guidelines to implement this provision. Notably, this mandate was not required for Items (a) to (c). This leads to no other conclusion than that the so-called "fund balance" in Special Provision No. 1(d) is ambiguous.

In Philippine Constitution Association v. Enriquez,63 the Court held that unconstitutional provisions and those intended to amend other laws are considered inappropriate, as they have no place in an appropriations bill.64

On this point, I concur with the ponencia in finding that Special Provision No. 1(d) effectively amends the provisions of the UHCA and the Sin Tax Laws. Its description of what constitutes "fund balance" also alters the existing laws and charters of GOCCs, which are required to review and reduce their reserve funds.

The general concept of "reserve fund" may be gleaned from the Revised Implementing Rules and Regulations of Republic Act No. 7656, which define reserves as "the portion of Retained Earnings of a GOCC that has been appropriated by its governing board for a specific purpose, i.e., legal or contractual obligation, plant expansion, and other contingencies."

Simply stated, reserve funds or reserves are set aside to cover future financial liabilities or emergencies – they serve as a financial safety net.

In the case of PhilHealth, the allocation of its reserve fund is pursuant to its legal obligation as explicitly declared in Section 11 of the UHCA, which pertinently provides:

From the foregoing, the source, usage, ceiling and limitations of PhilHealth's reserve funds are clearly defined. Most notably, Section 11 categorically states that the reserve fund consists of a portion of PhilHealth's accumulated revenues not needed to meet the cost of the current year's expenditures.

According to the respondents, PhilHealth's Accumulated Revenues refers to the totality of (i) government subsidies, (ii) premium contributions, and (iii) income from its investments less the totality of its normal operating and administrative expenditures and claims benefits. From the Accumulated Revenues, the "cost of the current year's expenditures" is subtracted before a portion can be set aside as reserve fund.65

The respondents argue that PhilHealth's "fund balance" was not part of PhilHealth's reserve fund and, therefore, there was no violation of Section 1166 of the UHCA. They assert that, as indicated in Section 11, the reserve fund is only a portion of the difference between the Accumulated Revenues and the Cost of Current Year's Expenditures. The fund balance which was ordered to be transferred pertained to the other portion not allocated for the reserve fund. Since Section 11 does not prescribe any specific treatment for this remaining portion not allocated to the reserve fund, the respondents claim that it should be considered an unrestricted fund of PhilHealth. Consequently, they argue that the remittance of PhilHealth's "fund balance" did not violate Section 11 of the UHCA.

As comprehensively discussed in the ponencia, PhilHealth's practice in determining its reserve fund begins with identifying the ceiling. The reserve fund is then computed by carrying over the amount of reserve funds from the preceding fiscal year plus PhilHealth's net income for the current year plus adjustments during the prior year, if any.67 This computation method is reflected in PhilHealth's Audited Financial Statements.

Based on this, "the accumulated revenues not needed to meet the cost of the current year's expenditures" referred to in Section 11 of the UHCA effectively refers to PhilHealth's net income for the current year. Notably, instead of allocating only a portion of its net income, PhilHealth adds the entire amount to the beginning balance of the reserve fund to determine the reserve fund for the current year. Thus, there is no "other portion" to speak of from which the "fund balance" could be derived.

Furthermore, the ponencia astutely pointed out that in defining the source of the "fund balance," Special Provision No. 1(d) of the 2024 GAA expressly states that it is the "remainder resulting from the review and reduction of [the GOCC's] 'reserve funds' to a reasonable level taking into account the disbursements from prior years." This provision clearly implies that to derive the "fund balance," the reserve funds of the GOCCs should first be "reviewed and reduced." From this reduction, results the remainder, and from this remainder, the "fund balance" is obtained.68

If the fund balance were truly sourced from the other portion of the excess of the Accumulated Revenues and the Cost of Current Year's Expenditures not allocated to the Reserve Fund, then why would Special Provision No. 1(d) require a review and reduction of the GOCC's reserve funds?

The answer is straightforward: the remittance pertains to the difference between the original and reduced reserve fund, which is then designated as "fund balance." I concur with the ponencia's observation that the PHP 183.1 billion "fund balance," out of which the PHP 89.9 billion amount remitted formed part, was actually sourced from and was part of the reserve funds of PhilHealth. Clearly, this violates the express mandate of Section 11 of the UHCA. The respondents further argue that the DOF, in computing the PHP 89.9 billion total "fund balance" to be remitted by PhilHealth, allegedly included the government subsidies portion only of PhilHealth's Accumulated Revenues. Allegedly, this was done to avoid touching the premium contributions of direct members, and the DOF "carved out" the PHP 89.9 billion from the unutilized government subsidies for the premium contributions of indirect members.

This distinction made between direct premium contributions and indirect premium contributions is unfounded and outrightly disregards the UHCA's objective to protect and promote the right and health of all Filipinos – whether direct or indirect contributors. In fact, PhilHealth itself admitted that it adopts the "one fund concept," which pertains to a general fund that is available to carry out all functions and activities of PhilHealth, regardless of source.69

Moreover, the movement of PhilHealth's reserve funds directly defies the express wording of the Sin Tax Laws that a portion of the sin tax collections shall be allocated and used exclusively for the implementation of the UHCA.

All told, the attempt to reclassify PhilHealth's unspent subsidies as "excess fund balances" or "unutilized funds" collapses under constitutional and statutory scrutiny. These monies are not idle assets of a GOCC, but earmarked trust funds dedicated to the continuing purpose of universal healthcare. By mandating their reversion to the Treasury, Special Provision No. 1(d) effectively reduced PhilHealth's reserves, in violation of Section 11 of the UHCA and disregarded actuarial requirements essential to the stability of the national health insurance system. Neither the Constitution nor the UHCA permits the Executive to relabel appropriated health funds as "balances" for reallocation. To uphold such practice would be to condone the erosion of fiscal discipline and, as properly held by the ponencia,70 directly violate the institutional safeguards designed to protect the people's right to health.

In her Amicus Curiae Brief, Dr. Ho emphasized that a stable source of financing is critical to reduce uncertain benefits and payout of services. In PhilHealth's case, the primary source of financing has always been premiums paid by the formal sector. Prior to the UHCA, the power to increase the premium was within the purview of the PhilHealth Board. Hence, any proposal to expand benefits was met with challenges like constrained financing and unpredictable premium increases. According to Dr. Ho, the UHCA enabled PhilHealth to build up resources and enable aggressive benefits expansion, such as providing more services and higher cost coverage per condition and/or procedure. She concluded that PhilHealth's benefit expansions in 2024 and early 2025 were only made possible because of secured financing. No question, PhilHealth plays a critical role in fulfilling the policy objectives of the UHCA, such that any inaccurate and unjustified claims of "savings" will only deter the complete realization of the law.

The UHCA reconstituted the composition of the PhilHealth Board under its Section 13.71 Under said provision, the PhilHealth Board has a maximum of 13 members. There are five ex officio members, namely: the Secretary of Social Welfare and Development, Secretary of Budget and Management, Secretary of Finance (SOF), Secretary of Labor and Employment, and the Secretary of Health (SOH), who shall be the ex officio non-voting Chairperson. Additionally, the Board must have three expert panel members with expertise in public health, management, finance, and health economics, as well as five sectoral panel members representing the direct contributors, indirect contributors, employers group, and health care providers – to be endorsed by their national associations of health care institutions and health care professionals – and a representative of the elected local chief executives to be endorsed by the League of Provinces of the Philippines, League of Cities of the Philippines and League of Municipalities of the Philippines. It is further required that, at least, one of the expert panel members and, at least, two of the sectoral panel members are women. All members must be Filipino citizens of good moral character.72 Moreover, expert panel members must meet several additional qualifications under the law, as well as the UHCA's IRR:73

Under Republic Act No. 7875, as amended by Republic Act No. 10606, or the National Health Insurance Act of 2013 (NHIA), the PhilHealth Board is tasked to administer the NHIP, ensure the Program's overall objectives and perform such acts as may be appropriate to attain the objectives of PhilHealth and the enforcement of the NHIA. Under Section 16 of UHCA, PhilHealth was accorded additional powers and functions to fix the reasonable compensation, allowances and other benefits of all positions, including its President and CEO, as well as to establish the organizational structure and staffing pattern of PhilHealth's central and regional offices subject to the approval by the Board. The UHCA further empowered PhilHealth to maintain a Provident Fund consisting of contributions made by both PhilHealth and its officials and employees and earnings thereon. The Provident Fund will be used to pay benefits to PhilHealth's officials and employees, or their dependents or heirs, under such terms and conditions as may be prescribed by the Board, subject to the approval of the President of the Philippines.74

Similarly, Section 26 of the NHIA governs the Financial Management of PhilHealth. The provision provides that the use, disbursement, or administration of the National Health Insurance Fund shall be governed by applicable laws and existing resolutions of the PhilHealth Board, subject to certain limitations. Specifically, all funds under the management and control of PhilHealth are subject to rules and regulations applicable to public funds; PhilHealth may charge against the funds the costs of administering the NHIP. Relatedly, Section 27 requires that PhilHealth set aside a portion of its accumulated revenues which is not needed to meet the cost of the current year's expenditures.(awÞhi( These are referred to in the law as "reserve funds." Section 27 also provides explicit instruction on how the reserve fund is to be managed:

Following Section 13(b) of the UHCA, the SOH, serving as a non-voting member of the PhilHealth Board, does not take an active role in governing PhilHealth. Instead, their function is primarily to facilitate discussion and decision-making.

This set-up differs from the previous provision found under the NHIA, as amended, which did not include the word "non-voting" before designating the SOH as the ex officio chairperson of the Board:

The previous provision under the NHIA mirrors the typical board structure of government-owned or -controlled corporations (GOCCs), where the chairperson is not barred from voting on matters concerning the management of the corporation, as reflected in Section 776 of Republic Act No. 10149 or the GOCC Governance Act of 2011.77

As it stands, the UHCA limits the participation of the SOH in shaping PhilHealth's policy direction. The law reduces the SOH's role on the PhilHealth Board to that of a recommendatory member – trading his or her expertise for supposed impartiality and neutrality:

Section 13 (b). The Secretary of Health shall be an ex officio non-voting Chairperson of the Board. [...]

This board structure differs significantly from the organizational structure of other universal healthcare systems in the world.

In April 2022, the Health and Care Act of United Kingdom came into effect and introduced reforms on the governance of healthcare delivery through the country's National Health Service (NHS). The Act granted more powers to the Secretary of State for Health and Social Care to intervene in decisions about changes to local services and to direct NHS England78 – the national body that leads the NHS.79 Although the Secretary of State for Health and Social Care is not a sitting member of NHS England, the Secretary maintains overall financial control and oversight of the NHS.80

Similarly, the Secretary of Health of Vietnam, through their Ministry of Health, is responsible for setting the policy and overseeing the Vietnam Social Security (VSS) which implements health insurance in Vietnam.81

ln comparison, the UHCA's framework limits the SOH's power to decide on health insurance policies in the PhilHealth Board. Although the UHCA's design aims to insulate PhilHealth from political influence, it has had the unintended effect of diluting accountability. The SOH, though Chairperson, cannot vote. In controversies involving fund management, this structure may leave PhilHealth vulnerable to fiscal raids with Iittle recourse to executive oversight. The present controversy demonstrates how there is a seeming governance gap that can be exploited. Safeguards may be reconsidered, in order to restore public trust in universal healthcare, which depends on both financial viability and accountable stewardship.

In its Compliance, dated April 30, 2025, the Office of the Government Corporate Counsel submitted a copy of the Secretary's Certificate stating that the PhilHealth Board approved the remittance of the Fund Balance in the total amount of PHP 89.9 billion to the Bureau of Treasury. During its regular Board Meeting on May 8, 2024, the PhilHealth Board discussed the Fund Balance relative to the assailed DOF Circular and determined that the Fund Balance consisted only of unutilized Government Subsidies and are, therefore, distinct from the Reserve Fund. The same Secretary's Certificate also certified that during the PhilHealth Board's regular Board Meeting on September 11, 2024, they approved the Audited Financial Statements as of December 31, 2023, which indicated that the Reserve Fund for 2024 amounted to PHP 280.6 billion. During the meeting, management confirmed that the PHP 89.9 billion in unutilized subsidies does not include PhilHealth premium contributions from direct contributors.

The record reflects that the PhilHealth Board, including the SOH as non-voting Chair, acquiesced to the reclassification and remittance of the so-called "fund balance." While the UHCA intentionally restricted the SOH's voting power to insulate the Board from political influence,82 this design also constrained the Department's ability to check actions that may compromise the NHIP's financial integrity. Although non-voting, the SOH would have been the best qualified to raise an issue regarding the raid against PhilHealth's funds. Surely, the SOH, even in a non-voting capacity, could have protected his program, the NHIP, health services being his primary lookout.

The approval of the remittance, as certified by the OGCC in its April 30, 2025 Compliance, reflects a lapse in the Board's fiduciary responsibility to safeguard the actuarial soundness of the Fund. At the very least, the Board failed to assert that the PHP 89.9 billion formed part of the statutory reserve fund, and thus could not lawfully be treated as disposable surplus. The SOH, though stripped of a vote, could have exercised greater vigilance by forcefully raising this objection on record to defend the sustainability of UHC. He did not.

To the undersigned, the controversy highlights a structural weakness in PhilHealth's governance: a board empowered to manage billions in trust funds but diffused in accountability, and a chairperson who presides without a vote. In practice, this set-up allowed the questionable reallocation of PhilHealth's reserves to proceed under the guise of "fund balance." To prevent further erosion of confidence in the health insurance system, it is important to revisit and fortify the accountability mechanisms of the PhilHealth Board. Again, public trust in the healthcare system cannot rest on technical compliance alone, but depends on vigilant stewardship that ensures every peso of health insurance funds is preserved for its lawful and intended purpose.

In view of the foregoing, the undersigned fully concurs with the Decision to declare as void Special Provision No. 1(d), and DOF Circular No. 003-2024 implementing the same, for violating the Constitution and existing statutes. In addition to being inappropriate, the undersigned also submits that Special Provision No. 1(d) is ambiguous for introducing the undefined concept of "fund balance," relying on vague standards such as "reasonable levels" of reserves, and requiring external guidelines from the DOF to clarify its operation, which are matters that cannot be left to implication or subsequent regulation.

All told, the decision to revert PhilHealth funds disrupted the framework of universal healthcare financing and eroded public trust in national health institutions. I thus fully concur in declaring said reversion unconstitutional.