MANILA - The national government's move to get back "unused" funds from the Philippine Health Insurance Corp (PhilHealth) points to a "bigger fiscal management issue" according to an economics professor from the University of the Philippines.

Prof. Cielo Magno, who briefly also worked as an Undersecretary in the Department of Finance, said the issue stems from the government's inclusion of P450 billion worth of projects which are unfunded in the national budget.

"What is wrong with that is, aside from increasing or bloating the unfunded portion of the budget, they also transferred important projects that should be funded," Magno said in an interview with ANC.

Magno noted that several important projects were left without funding.

"What are in this unappropriated portion of the budget? The payment for our healthcare workers that has been long overdue since the pandemic; AFP modernization; foreign-assisted infrastructure projects--including projects that the President mentioned in the SONA," Magno said.

The Department of Finance earlier justified its order to PhilHealth to remit P89.9 billion back to the national treasury so that these can be utilized in financing unprogrammed appropriations.

Finance Secretary Recto said despite the order, PhilHealth's programs will not be affected since the state insurer still has P500 billion remaining in its benefit chest.

Recto: PhilHealth to end 2024 with P546 billion despite fund transfer

Magno said they have filed a case before the Supreme Court questioning the legality of the order.

"Actually, the foundation of the question before the court is whether the provision in the General Appropriations Act can amend existing laws," Magno said referring to the Universal Health Care Act.

"Under that law, it's very specific that funds allocated for PhilHealth can only be for two purposes. One is to broaden the services of PhilHealth; or to lower our premium. There's nothing there that says that the government, the executive government, can take away the money of PhilHealth to finance other government projects."

She said that this makes it illegal for the DOF to take away the money that is in PhilHealth right now.

"That's why I'm saying [is] that this is a huge fiscal management issue," she added.

Magno said the measure should not be allowed as it was akin to "bastardizing" the budgeting process. Instead of taking money from PhilHealth to finance other projects, the government should instead look at expanding the coverage of state-led health insurer.

"I just learned the other day, if you have leukemia, it's not automatic that PhilHealth will cover all your medication. It only covers certain types of leukemia. So a lot of people suffer from this."