The Commission on Audit has chided the Philippine Medical Health Insurance Corporation for failing to utilize some P89.9 billion in national government subsidies to finance programs that will better benefit the country’s senior citizens, persons with disabilities and the marginalized sector.

COA’s position on the controversial fund was aired by the state audit agency in its 2023 Annual Audit Report on Philhealth.

“The Audit Team opened that the unutilized portion of the subsidies from NG (national government) could have been used by PhilHealth to significantly expand benefit programs provided specifically for indirect contributors such as Senior Citizens (SCs); Persons with Disabilities (PWDs), marginalized members of the society included in the NHTS (National Household Targeting System for Poverty Reduction), and others,” the audit report stated.

The unspent Philhealth fund is currently the object of a legal controversy filed before the Supreme Court.

The High Tribunal has issued a temporary restraining order directing government against continuing to implement Department of Finance Circular No. 003-2024 directing state-owned corporations such as Philhealth to remit idle, unused and excess funds to the Bureau of Treasury.

Government intended to allocate the fund to finance unprogrammed appropriations in the 2024 budget.
Oral arguments on the controversial fund transfer has been reset by the SC from January 14, 2025 to February 4, 2025.

In the recently-released audit report, COA noted that the management of the PhilHealth Reserve Fund “did not comply with the Universal Healthcare Act”. It cited the following factors:

-Funds were invested without considering actuarially estimated two-year projected program expenditures.

-There was delay and minimal expansion of benefit programs and partial utilization of subsidies from the NG made an excuse to return the PHP89.9 billion PhilHealth funds to the Bureau of Treasury, thus, depriving the members of adequate and additional benefit coverage.l

State auditors also asked Philhealth to prioritize project program expenditures for the next two years before investing the unused portion of thereserve funds