MANILA – The Department of Finance (DOF) on Monday said utilizing unused government-owned and controlled corporation (GOCC) funds for public programs is a more prudent fiscal option than borrowing more or imposing new taxes.
The DOF made the statement after health reform advocates earlier questioned DOF's Memorandum Circular No. 003-2024, directing the Philippine Health Insurance Corp. (PhilHealth) to remit PHP89.9 billion of unused government subsidies to the national treasury.
They claimed that the move violates the Universal Health Care Law.
The DOF, however, said using idle funds of government corporations for projects in health, social services and infrastructure does not affect the viability of participating corporations, and does not impair their delivery of services.
In the case of PhilHealth, the DOF said it currently has a PHP500 billion benefit chest that can be used to fund multiple-year claims.
"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," DOF said.
"Overall, the move complies with all laws, specifically the General Appropriations Act of 2024, which have imposed appropriations in excess of what the executive branch has originally proposed," it added.
According to DOF, the unused government subsidies of PhilHealth are not part of its reserve funds, nor income that is being restricted by the Universal Health Care Act to be used by the national government as a general fund.
"The merit of this tack is best exemplified by the fact that PhilHealth and other GOCC remittances to the treasury are what enabled the DBM (Department of Budget and Management) to release PHP27.5 billion to pay the 5.04 million claims of Covid pandemic era service allowances of frontliners," it said.
The DOF assured that the same care and diligence were exercised in calibrating the Philippine Deposit Insurance Corporation’s (PDIC) contribution to the revenue raising effort.
"These were made in observance of legal spelled out in legal opinions by the Office of the Government Corporate Counsel (OGCC). Moreover, the return of unused rail guards and excess funds was approved by the PhilHealth and PDIC’s respective boards," it said.
"The result promotes the common good, based on the list of recipients identified in the national budget," it added.
These recipients include the ongoing foreign-assisted projects such as the Metro Manila Subway Project, the North-South Commuter Railway System, and the Philippine National Railway (PNR) South Long-Haul Project, Support to Parcelization of Lands for Individual Titling Project, and the Philippine Fisheries and Coastal Resiliency Project.
Other projects include the Philippine Multi-Sectoral Nutrition Project, Supporting Innovation in the Philippine Technical and Vocational Education and Training System, the Mindanao Inclusive Agriculture Development Project, the Philippine Rural Development Project, Community-based Monitoring System for the Philippine Statistics Authority, and the Comprehensive Automotive Resurgence Strategy (CARS) Program of the Department of Trade and Industry.
The Finance department said “tapping GOCC surplus for urgent public programs is similar, but on a far more smaller scale, to what the government did with Bayanihan when it called up the cash hoard of GOCCs in the fight against Covid.”
"We cannot afford to have excess money sleeping in our GOCCs while withholding the same funds from public investment. Hibernating funds can help the nation without harming government corporations. This way, the government does not have to inflict additional taxes, increase our debt, and put pressure on our deficit," it added.
Support of House panel
House Appropriations Committee Chairman and Ako Bicol Party-List Rep. Zaldy Co said Congress won’t interpose any objection to the DOF plan as it underscores the commitment of the administration of President Ferdinand R. Marcos Jr. to efficient resource management and prioritizing public welfare.
“This initiative will re-channel billions of dormant funds to help millions of Filipinos enjoy better healthcare and social services and bolster economic activity by investing more in social services and infrastructure projects at no extra cost to government,” Co said in a statement on Tuesday.
He emphasized that the funds being transferred to the treasury are excess funds of GOCCs, which are not derived from member contributions, and are, in fact, unutilized funds provided by the national government.
"It is essential to understand that these funds are distinct and separate from any contributions made by PhilHealth members and are meant to be used for the country's development" he said.
Co said it would be a great injustice to Filipinos if the “stranded funds” would be unused.
“Since the PhilHealth reserve fund came from the government, it is only proper to reinvest them to benefit more people instead of just leaving them idle,” he said.
He added that by putting these dormant funds to better use, “the pressure on the government to borrow more and on Congress to pass new tax measures will be lessened.” (with reports from Zaldy De Layola/PNA)
