Fresh plunder complaint filed against Recto, Ledesma over PhilHealth fund transfer

By Erika Mae P. Sinaking

A FRESH plunder complaint against Executive Secretary Ralph G. Recto and former Philippine Health Insurance Corp. (PhilHealth) President Emmanuel R. Ledesma, Jr. was filed before the Office of the Ombudsman on Thursday over the alleged illegal transfer of P60 billion in reserve funds.

The complaint was filed by a coalition of Ilonggo doctors, lawyers, and health advocates seeking a preliminary investigation and the determination of possible criminal, civil, and administrative liability for plunder, technical malversation, violations of the Anti-Graft and Corrupt Practices Act, and grave misconduct. 

“The respondents deliberately, willfully, and maliciously, acting with evident bad faith, dishonesty, and grave misconduct, unlawfully and intentionally caused the transfer of P60 billion in PhilHealth reserve funds to the National Treasury,” the complainants said in their complaint-affidavit.

The filing centers on Department of Finance Circular No. 003-2024, which ordered the remittance of so-called “excess” funds of government-owned and -controlled corporations to bankroll unprogrammed appropriations under the 2024 General Appropriations Act. PhilHealth transferred P60 billion in three tranches before the Supreme Court (SC) issued a temporary restraining order stopping further transfers, leaving P29 billion unreleased, the complainants said.

In its ruling last year, the SC noted that Mr. Recto, who issued the transfer order as Finance secretary, acted in “institutional good faith” and performed a “strictly ministerial” role by following Congress’ instructions.

The Court, however, did not rule on whether he could be held personally liable for technical malversation or plunder, focusing instead on the legality of the budget provision itself.

Despite this, the complainants said that the transfer was illegal, arguing PhilHealth funds are meant solely for health services and member benefits — not for general government spending — and that the law clearly forbids moving these funds to the National Government.

In response to the new complaints, Mr. Recto maintained that he acted in accordance with the law and in good faith, citing the Supreme Court ruling.

“No criminal liability may attach to me, as former secretary of Finance, for acting in good faith and in accordance with a direct mandate from Congress in ordering the remittance of PhilHealth’s unused funds,” he said.

“The issue has already been addressed by the Supreme Court, and the government has fully complied with its ruling. Consistent with this, funding for PhilHealth has since been restored and even augmented to better serve our countrymen,” Mr. Recto said.

Mr. Ledesma did not immediately reply to a Viber message seeking comment.

“No portion of the reserve fund or income thereof shall accrue to the general fund of the National Government or to any of its agencies,” the complaint quoted from the Universal Health Care Act.

The group said the plunder charge is anchored on the alleged illegal diversion of public funds amounting to far more than the P50-million threshold under the Anti-Plunder Act, arguing that the transfer caused “substantial damage and serious prejudice” to PhilHealth and its members.

They also cited the high court ruling that declared the budget provision allowing the transfer invalid, saying Congress cannot alter the Universal Health Care law through a budget measure.

The complainants also claimed PhilHealth lost more than P50 million in potential interest income, which could have been used to expand health benefits or reduce member contributions.

“PhilHealth and its contributing members have lost so much which has a direct impact on the latter’s benefits,” the complaint said.

The complainants, who identified themselves as PhilHealth members and taxpayers, said the filing seeks accountability for the diversion of funds “earmarked exclusively for public health” and warned that allowing such transfers undermines the sustainability of the country’s universal health care system.