THE Department of Health (DOH) said on Tuesday that allowing the transfer of P89.9 billion in PhilHealth funds would send a "strong signal" for the state health insurer to improve services and maximize member benefits.

Assistant Secretary Dr. Albert Domingo made this statement during the resumption of oral arguments where Supreme Court Associate Justice Antonio Kho Jr. called for a PhilHealth "overhaul" and change its board for failing to comply with legal mandates.

"It's the fault of the PhilHealth board. Let's not make people suffer because the money is there," Kho said.

Domingo responded, stating: "Your Honor, even without this maneuver of the P89.9 billion, the government can and always will increase the benefits. But the signal that this litigation provides is a strong push for PhilHealth to do so."

The DOH official emphasized that the transfer would compel PhilHealth to use its funds efficiently rather than letting them remain idle.

"If the transfer is allowed to proceed, it serves as a 'use-it-or-lose-it' signal, which applies to all national government agencies. GOCCs like PhilHealth do not have this pressure," Domingo said.

He pointed out that despite the fund transfer, PhilHealth has expanded its benefits over the past year.

The oral arguments stemmed from three consolidated petitions filed by Sen. Aquilino Pimentel III, Bayan Muna Chairman Neri Colmenares, and the 1Sambayanan Coalition. The petitions challenged the constitutionality of Department of Finance (DOF) Circular 003-2024 and Section 1(d) of Special Provision XLIII in the 2024 General Appropriations Act (GAA).

The DOF circular mandates the transfer of unused subsidies from government-owned and controlled corporations (GOCCs), including PhilHealth's P89.9 billion, to the national treasury to support unprogrammed appropriations.

The petitioners argue that Special Provision 1(d) of the GAA was an "inserted" provision that improperly redirects reserve funds. Under this provision, unprogrammed appropriations may be sourced from "any remainder resulting from the review and reduction of a GOCC's reserve funds to reasonable levels, considering prior years' disbursements."

During the proceedings, Supreme Court Associate Justice Amy Lazaro-Javier grilled government lawyers on whether social health insurance funding should be subject to political negotiation.

She questioned Government Corporate Counsel Solomon Hermosura's claim that PhilHealth funding is influenced by political factors.

"I have always believed that health is non-negotiable," she said.

Hermosura cited the Universal Health Care Act's Section 37, which allows the DOH and PhilHealth to request supplemental funding from Congress. He argued that determining reserve fund levels is a matter of business judgment, balancing government support and PhilHealth's sustainability.

The justices also scrutinized PhilHealth's increasing budget. From 2016 to 2022, its corporate operating budget grew by 25 percent, from P126.4 billion to P168 billion. Under the current administration, it surged by 41 percent to P284 billion.

The court further inquired whether government subsidies from the Philippine Amusement and Gaming Corporation, the Philippine Charity Sweepstakes Office, and sin taxes were automatically appropriated. Hermosura clarified that while these sources are identified by law, their disbursement still requires inclusion in the GAA.

Solicitor General Menardo Guevarra defended the government's decision to tap into unused GOCC funds, including PhilHealth's, to finance priority projects in infrastructure, health, and education. The 2024 budget includes a special provision permitting the transfer of GOCC reserve funds after a review and reduction of their balance.