As the Supreme Court heard petitions Tuesday contesting the Marcos Jr administration’s transfer of PhilHealth excess funds to the national treasury to bolster unprogrammed appropriations, research group IBON said that this action violates Filipinos’ right to health. The group also stressed that the government’s cavalier attitude to the budget compromises its purpose of uplifting people’s lives, fuels deficits and debt, and erodes the integrity of the process and public trust in governance.
IBON executive director Sonny Africa attended the Supreme Court oral arguments, appearing as one of the court-identified amici curiae or “friend of the court”, sharing IBON’s insight on the PhilHealth issue.
Africa stressed that the government’s transfer of the Php89.9 billion in purportedly excess PhilHealth funds diminishes the agency’s resources to support the health spending of poor, low income and even middle-class Filipinos, violating their right to health. With poverty worsening and privatized health care becoming more expensive, these funds are better spent on increasing PhilHealth’s meager benefits or decreasing members’ contributions.
Citing latest data from the Philippine Statistics Authority’s (PSA), Africa noted that there are more private hospitals (849) than government hospitals (440). Private healthcare is also significantly more expensive; for example, according to the National Demographic Health Survey (NDHS) 2022, the mean cost of confinement in a private hospital is Php70,568 or over two-and-a-half times higher than the Php27,136 mean cost in a public facility. The mean cost of outpatient care is nearly three times higher in a private facility.
However, increasing user fees in public facilities is making the cost of confinement there rise faster than in private ones. Between 2013 and 2022, the mean total hospital bill in public facilities surged by 214% compared to a 177% increase in private facilities, according to IBON Foundation computations on NDHS data.
Africa said that as health care costs in both private and public facilities have increased, so has the share of household spending going to health. From 2.2% in 1997, household spending on health has risen to as much as 3.7% in 2012 and 2015, before moderating only slightly to 3.3% in 2021 and 3% in 2023, according to IBON’s computations on data from the PSA’s Family Income and Expenditure Surveys (FIES).
Increasingly expensive and privatized healthcare disproportionately burdens the poor and low-income families who make up 60-75% of the population, said Africa. As it is, the number of families identifying themselves as poor has risen by 5.2 million from 12.2 million (49% of families) in June 2022 to 17.4 million or nearly two-out-of-three families (63%) in December 2024, according to Social Weather Stations (SWS).
Depleting PhilHealth resources by underfunding and defunding will further limit access to affordable healthcare, Africa said. The agency’s allocation of just Php61.5 billion under the 2024 General Appropriations Act (GAA) is the smallest in six years. Moreover, the original proposed Php74.4-billion subsidy in 2025 was eliminated, resulting in zero funding in the 2025 GAA.
These drastic budget cuts for PhilHealth and transfer of supposedly excess reserve funds are part of a general trend of decreasing budgetary priority for health and social services in favor of profitable infrastructure projects and debt servicing. The health allocation in the GAA peaked at 6.9% share of the total budget in 2021 but has since basically declined to 5.6% in 2024 and further to 5.1% in 2025. Meanwhile, the share of infrastructure spending for Power and Energy, Water Resources Development and Flood Control, Communications, Roads and Other Transportation combined has grown from 14.3% in 2020 to 17.9% in 2025. Debt interest payments increased from 8.8% up to 13.3% in the same period.
Africa also expressed concern that Congress inserting hundreds of billions of politically-motivated pork barrel projects is adding considerable pressure on deficits, gross borrowings and public debt. In 2024, lawmakers added up to Php449.5 billion in pork barrel projects to the GAA’s Programmed Appropriations during the budget deliberations, and made space for this by transferring items equivalent to this amount to Unprogrammed Appropriations.
The bloating of Unprogrammed Appropriations (UA) in this way to accommodate pork barrel projects began with the 2022 national budget. Congress increased unprogrammed appropriations by Php100 billion in 2022, by Php219 billion in 2023 and then by Php449.5 billion in 2024. Compared to 2021, UAs surged four- to five-fold, reaching Php807.2 billion in 2023 and Php731.4 billion in 2024. In 2024, these bloated UAs were financed using fund balances of Government-Owned or -Controlled Corporations (GOCCs) like PhilHealth.
Africa emphasized that this violates the 1987 Constitution which prohibits Congress from increasing the budget submitted by the president. He argued that UAs have long been part of the GAA, and that even the Administrative Code of 1987 is very clear about the prohibition against the increase of appropriations whether programmed or unprogrammed.
IBON said that while the country’s highly commercialized health system with PhilHealth as a key element is failing to address the country’s health needs, millions of Filipinos, especially the poor, still do rely on whatever support PhilHealth can provide. Transferring reserve funds and defunding the agency will hinder access to health services.
The PhilHealth controversy, IBON said, is only a specific example of worsening underfunding of social services and social protection. It further reveals not only how flawed the budget process is but also the need for a government with the political will to truly resolve this and ensure that the national budget gives utmost importance to the welfare of the poor and low-income majority, said the group.
