THE reserve fund of the Philippine Insurance Corporation (PhilHealth) has dwindled to precarious levels because of the decision of the Aquino administration to use it to pay for the health insurance premiums of senior citizens, because the money intended for them, P10.6 billion, was diverted to the Department of Health (DoH).

The decision was made in 2015 by former health secretary Janette Garin, former PhilHealth chief Alexander Padilla and former budget secretary Florencio Abad, at about the same time the Aquino government considered the purchase of the controversial Dengvaxia anti-dengue vaccines, Health Secretary Francisco Duque 3rd told senators on Tuesday.

Garin and Padilla issued denials on the “TV Patrol” newscast on ABS-CBN. Garin said the charges were meant as a smokescreen for alleged mismanagement at PhilHealth, while Padilla said there was no evidence that the money was diverted or realigned.





Sen. Joseph Victor Ejercito, who led an inquiry into the activities of PhilHealth, said the fund diversion was “utterly heartless and insensitive to the condition of our senior citizens.”

“It was done the same period as Dengvaxia. This diversion of the P10.6-billion fund for PhilHealth intended for the benefits of senior citizens in 2015 to the DoH, for me, is a heinous act three times cruel than the Dengvaxia fiasco,” he told reporters after the hearing of the Senate Committee on Health and Demography.

Down to 10 months

According to Duque, the reserve or backup fund of the state-run health insurance corporation, which was supposed to last for two years or 24 months, was down to only 10 months.

This was because the previous administration used the backup funds to pay for the insurance benefits of more than seven million senior citizens in the country. Separate funds intended for them were allegedly diverted to other uses by Garin, Padilla and Abad.

The realignment request for P10.6 billion was contained in a memorandum signed by former executive secretary Paquito Ochoa, which at the same time sought the realignment of P3.5 billion to procure the Dengvaxia vaccines, senators found.

A copy of the memorandum issued by Ochoa to Abad, dated December 29, 2015, showed that President Benigno Aquino 3rd approved the request to use savings from the Miscellaneous Personnel Benefit Fund (MPBF) to augment “items of appropriation for various urgent projects.”

These include the construction of rural health units and village health stations and the purchase of 163 mobile dental units.

Garin and Padilla stated in a letter to the Department of Budget and Management that the PhilHealth did not need the P10.6 billion because it could cover the insurance of senior citizens.

Padilla on Wednesday claimed he and Garin only made a request and that the final say was with the Budget department.

Cases filed

The reserve fund is different from the operating fund of PhilHealth, which has an actuarial life of more than 10 years following the implementation of a 0.25-percentage point increase in premium contributions in January.

Cases of violation of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act have been filed against Garin and Padilla by PhilHealth officer in charge Celestina Jude de la Serna.

According to the complaint, Garin and Padilla caused undue injury to PhilHealth when they diverted the funds intended for senior citizens’ premiums for 2015 to the DoH health facilities enhancement program without prior consent or approval of the PhilHealth board of directors.

De la Serna used as basis of her complaint a The Manila Times column dated January 5, 2018, written by former ambassador Rigoberto Tiglao, titled “Aquino gang hijacked P10.6B senior citizens funds.”

Tiglao, in his column, detailed how the multibillion-peso fund was diverted to purposes unauthorized by Congress.