MANILA — The Department of Finance (DOF) advocated on Monday for the mobilization of unused funds from government-owned and controlled corporations (GOCCs) to finance public programs, highlighting it as a more prudent fiscal strategy compared to new taxes or increased borrowing.
According to Philippines News Agency, this stance comes in response to criticism from health reform advocates regarding DOF's Memorandum Circular No. 003-2024, which instructs the Philippine Health Insurance Corp. (PhilHealth) to transfer PHP89.9 billion of its unutilized government subsidies back to the national treasury. Critics argue that this directive contravenes the Universal Health Care Law. However, the DOF counters that utilizing idle funds from government entities for projects in health, social services, and infrastructure does not compromise the operational viability of these corporations nor their service delivery.
The DOF elaborated that PhilHealth possesses a PHP500 billion reserve that can cover multi-year claims, indicating substantial financial health that can support national needs without impairing its functionalities. "It is also worthy to note that remittances to fund urgent national projects do not come from their member contributions but from a fraction of billions in unutilized national government subsidies," the DOF added, emphasizing compliance with the 2024 General Appropriations Act.
The department also clarified that the unused subsidies at PhilHealth are neither part of its reserve funds nor income restricted by the Universal Health Care Act. Such funds are, therefore, legitimately usable for broader governmental purposes. The statement highlighted the efficacy of this approach by noting that similar remittances have previously enabled significant financial maneuvers, such as the PHP27.5 billion disbursed by the Department of Budget and Management to settle millions of Covid-19 pandemic-era claims.
In addressing other GOCCs like the Philippine Deposit Insurance Corporation (PDIC), the DOF assured that the same level of diligence and legal compliance, as advised by the Office of the Government Corporate Counsel, guided their decisions. These decisions were ratified by the boards of the involved GOCCs, aiming to promote the common good as per the national budget's stipulations.
The funds have been allocated to various significant projects including the Metro Manila Subway Project, the North-South Commuter Railway, and the Philippine National Railway South Long-Haul Project, among others. These initiatives highlight a diverse array of infrastructure and development projects funded through the strategic use of GOCC surpluses.
The Finance department drew parallels with past governmental actions during the Covid-19 crisis, where similar financial strategies were employed to enhance national funding without imposing additional fiscal burdens on the populace. "We cannot afford to have excess money sleeping in our GOCCs while withholding the same funds from public investment," the DOF stated, advocating for the strategic use of dormant funds to avoid new taxes or increased national debt.