Finance Secretary Ralph Recto on Wednesday defended before the Supreme Court the government’s decision to transfer idle and unused funds from PhilHealth and other government-owned and -controlled corporations (GOCCs) into the national treasury, calling it a “common-sense approach” to avoid further borrowing for key public projects.
Recto explained that the move was necessary as the government continues to manage the country’s economic recovery from the COVID-19 pandemic and the large debt it incurred during the crisis.
“First, we are still recovering from the pandemic that gave us the hardest economic blow — a contraction of 9.5 percent in 2020 — the lowest since post-World War II,” he said, noting that the Marcos administration inherited PHP7.47 trillion in new debt, pushing the debt-to-GDP ratio to 60.9 percent by 2022.
“It is our responsibility to repay these large borrowings. We inherited this debt but we do not intend to simply pass this burden onto the next administration,” Recto added.
Citing the 2024 General Appropriations Act (GAA), Recto said Congress authorized the sweeping of excess and idle GOCC funds to support the government’s priority programs and economic recovery initiatives. This includes PHP89.9 billion in surplus funds from PhilHealth, of which PHP60 billion has already been transferred.
The remaining PHP29.9 billion is currently on hold due to a temporary restraining order (TRO) issued by the Supreme Court.
Recto emphasized that the action is legal, temporary, and fiscally responsible.
“We are the government’s chief fundraiser. We are called to steward the nation’s fiscal stability. It is our duty to put every peso to work for the people. Sleeping funds serve no one,” he said.
He pointed out that in 2024, government expenditures are projected at PHP5.76 trillion, but only PHP4.27 trillion is supported by revenues. On a daily basis, the government spends PHP15.8 billion, with PHP4.1 billion of that still funded by borrowing.
Recto added that the move aligns with the Medium-Term Fiscal Framework, which aims to lower the country’s fiscal deficit from 8.6 percent of GDP in 2021 to 3.7 percent by 2028, and reduce debt levels from 60.9 percent to 56.3 percent of GDP.
Framing the measure as a form of “Bayanihan 3,” Recto said it mobilizes existing public resources without raising new taxes, aiming to accelerate economic recovery, create jobs, and reduce poverty.
“We wouldn’t be doing our job if we clung to convention over common sense,” he said, urging the Court to view the action as an urgent, lawful response to fiscal challenges.