Ilonggo lawyers file charges vs. Recto, Ledesma

By Joseph Bernard A. Marzan

QUEZON CITY — A group of Ilonggo doctors, lawyers and taxpayers filed a complaint before the Office of the Ombudsman on Thursday, Jan. 15, seeking a preliminary investigation against Executive Secretary and former finance secretary Ralph G. Recto and former Philippine Health Insurance Corp. president and CEO Emmanuel R. Ledesma Jr. over the transfer of PHP 60 billion in PhilHealth reserve funds to the National Treasury.

The complainants accused Recto and Ledesma of technical malversation and violations of Republic Act Nos. 3019, or the Anti-Graft and Corrupt Practices Act, and 7080, or the Anti-Plunder Act, as well as grave misconduct under Republic Act No. 6713, or the Code of Conduct and Ethical Standards for Public Officials and Employees.

The allegations stem from the transfer of PhilHealth funds used to finance unprogrammed appropriations under Republic Act No. 11975, or the General Appropriations Act of 2024.

In their complaint-affidavit, the complainants alleged that the PHP 60 billion transfer violated Republic Act No. 7875, or the National Health Insurance Act of 1995, as amended, and Republic Act No. 11223, or the Universal Health Care Act, which expressly prohibit PhilHealth reserve funds from accruing to the general fund of the national government.

“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 or instrumentalities, including government-owned or -controlled corporations,” the complaint quoted from Section 11 of Republic Act No. 11223.

The complainants said the transfer stemmed from Special Provision 1(d) of the 2024 General Appropriations Act and Department of Finance Circular No. 003-2024, which ordered government-owned and controlled corporations to remit excess reserve funds to the National Treasury.

According to the complaint, PhilHealth transferred PHP 60 billion in three tranches out of the PHP 89 billion identified as excess reserves.

The remaining PHP 29 billion was not transferred after the Supreme Court issued a temporary restraining order.

The complaint cited a recent Supreme Court ruling declaring Special Provision 1(d) void, noting that the high court found it unconstitutional for being a rider and for impliedly repealing provisions of the Universal Health Care Act and the Sin Tax laws.

“Congress has no power to repeal an existing law such as the UHCA through the GAA. … An amendment to a law like UHCA can only be made through a separate legislation,” the complaint stated.

The complainants alleged that Recto “caused the inclusion of PhilHealth reserve funds in the GOCC excess funds through Special Provision Section 1 of the 2024 General Appropriations Act,” while Ledesma “should also be held liable for his acquiescence to the directive given by Respondent Recto.”

They further claimed the respondents acted “deliberately, willfully, and maliciously, acting with evident bad faith, dishonesty, and grave misconduct” in approving and carrying out the fund transfer.

According to the complaint, the transfer resulted in “substantial damage and serious prejudice to the Government and the Republic of the Philippines, the members of PhilHealth and most especially, the general public.”

The complainants also alleged that PhilHealth lost potential income from interest-earning investments, stating that “PhilHealth lost more than PHP 50 million representing the interest from income-generating investment instruments” as a result of the transfer.

In their prayer, the complainants asked the Office of the Ombudsman to conduct a preliminary investigation and file appropriate charges against Recto and Ledesma for technical malversation, graft, plunder and grave misconduct.

The complaint was signed, sworn to and notarized in Iloilo City and filed before the Office of the Ombudsman in Quezon City by the complainants’ counsels, Ilonggo lawyers Rodel Taton, Arnel Garde and Jian Dominic Tan.