‘SAD DAY’: Complainant rues Ombudsman ruling on PhilHealth fund transfer

By Joseph Bernard A. Marzan

QUEZON CITY—One of the complainants called the Office of the Ombudsman’s dismissal of charges against Finance Secretary Ralph Recto and former PhilHealth chief Emmanuel Ledesma Jr. “a sad day for accountability and responsibility.”

Taton told Daily Guardian that he and fellow complainants are exploring legal options once they officially receive a copy of the resolution, including filing a motion for reconsideration or refiling the complaint.

“We still firmly believe there was evident bad faith in facilitating the transfer of PHP 60 billion in PhilHealth reserve funds to the National Treasury, ultimately undermining the trust of the Filipino people,” Taton said.

In a 40-page consolidated resolution dated June 2, 2026, the Ombudsman dismissed complaints for technical malversation, violations of Republic Act No. 3019, plunder, and grave misconduct for “lack of prima facie evidence with reasonable certainty of conviction and insufficiency of evidence, respectively.”

The resolution was drafted by a special panel composed of Graft Investigation and Prosecution Officers Roseann Claudine Pasion and Corinne Joie Garillo-Arellano, recommended for approval by Assistant Ombudsman Nellie Boguen-Golez, and approved by Ombudsman Jesus Crispin Remulla.

The resolution responded to two separate but similar complaints—one filed by several doctors and lawyers, the other by private individuals—both citing the transfer of PhilHealth reserve funds pursuant to Special Provision No. 1(d) of Republic Act No. 11975, or the 2024 General Appropriations Act (GAA), and Department of Finance (DOF) Circular No. 003-2024.

The DOF circular, signed by Recto on Feb. 27, 2024, implemented the transfer of excess reserve funds from government-owned and controlled corporations to the National Treasury.

PhilHealth, under Ledesma, initially transferred PHP 60 billion in three tranches.

A remaining PHP 29.9 billion was withheld after the Supreme Court issued a temporary restraining order in consolidated petitions challenging the transfer.

The Supreme Court’s Dec. 3, 2025, ruling in Pimentel III vs. House of Representatives declared the transfer unconstitutional.

Both complaints alleged against Recto and Ledesma technical malversation under Article 220 of the Revised Penal Code, plunder under Republic Act No. 7080, and the administrative offense of grave misconduct.

Both complaints also alleged violations of Republic Act No. 3019, or the Anti-Graft and Corrupt Practices Act. The first complaint cited only Section 3(e), while the second cited violations of Sections 3(a), (b), (c), (d), and (e).

Both complaints alleged that Recto and Ledesma illegally transferred PhilHealth reserve funds to the National Treasury in violation of Republic Act No. 11223, or the Universal Health Care Act, and related laws.

The second complaint was filed by Ilonggos, including lawyers Rodel Taton, Justin Francis Bionat, and Clyde Gacayan, and doctors Cynthia Ng, Milagros Tespoer Layson, Edna Atacador Medez, Noel Binayas, Cynthia Amatril, Maria Evelyn Divinagracia, Louie Tirador, and Marcelo Jaen.

Despite the Supreme Court’s ruling, the Ombudsman said the evidence failed to establish criminal intent on the part of the respondents.

The Ombudsman noted that the transfer was merely necessary or incidental to the provision stated in the 2024 GAA, and that the respondents acted under a law and circular that were presumed valid at the time.

“It is of this Office’s understanding that respondents caused the transfer of the PHP 60 billion PhilHealth Reserve Funds to the National Treasury as necessary and/or incidental to the enactment of Special Provision 1(d)—which acts were considered valid and legal prior to the pronouncement of the Supreme Court in Pimentel,” the resolution stated.

“The acts thus complained of against respondents are incidental to the implementation of Special Provision 1(d), which indicates the absence of intent to perpetrate the offense,” it added.

On the technical malversation charge, the Ombudsman ruled that complainants failed to prove that Recto and Ledesma intended to unlawfully divert public funds.

“Intent, being a state of mind, is rarely susceptible of direct proof,” the resolution stated, adding that complainants failed to provide “proof other than the alleged acts of herein respondents to prove the crime of Technical Malversation.”

The Ombudsman further cited separate opinions in the Pimentel case stating that public officials who acted in compliance with existing laws and official legal opinions should not be held criminally liable.

The resolution quoted Associate Justice Jhosep Lopez, who said that officials acted “with institutional good faith and due prudence.”

On the anti-graft law charges, the Ombudsman ruled that the respondents acted in the performance of their official duties and relied on legal opinions, including those issued by the Office of the Government Corporate Counsel, the Governance Commission for GOCCs, and the Commission on Audit.

“Respondents cannot be held liable for alleged evident bad faith or gross inexcusable negligence simply because complainant Taton, et al. suggest that respondents ‘should have first examined existing laws,’” the resolution said.

“To this Office’s mind, respondents’ criminal liability must be based on evidence showing a more knowing, deliberate, or conscious indifference to act in a situation where there was clearly a duty on respondents’ part to act, and not merely on complainants’ submission that respondents should have first examined existing laws or should have at least been made aware that PhilHealth’s Reserve Funds are not to be returned to the National Treasury,” it added.

The Ombudsman also rejected the plunder complaint, finding no evidence that the respondents amassed ill-gotten wealth.

“Here, respondents’ acts do not amount to the crime of Plunder defined by law,” the resolution stated.

The resolution noted that Recto was later commended by the Supreme Court for returning the PHP 60 billion to PhilHealth after the high court declared the transfer unconstitutional.

“Thus, the return of the PHP 60 billion to PhilHealth militates against the allegation that respondents took advantage of their positions for ‘personal enrichment,’” the Ombudsman said.

The Ombudsman also dismissed the administrative complaint for grave misconduct against Ledesma for lack of jurisdiction, noting that he had already left government service before the complaint was filed.

“Records show that [Ledesma] had been separated from government service due to ‘end of term’ on February 7, 2025 or before the filing of the instant complaints on March 3, 2026,” the resolution stated.