PhilHealth Controversy: Supreme Court Upholds COA Ruling On Disallowing P83 M For Officials, Employees

The Supreme Court has upheld a 2018 ruling that disallowed the Philippine Health Insurance Corporation's (PhilHealth) issuance of P83 million in monetary benefits to its officials and employees in 2014, marking another milestone in efforts to dig into allegations of corruption within the state insurance agency.

In its 21-page decision that was affirmed in September, but only released to the public this month, the Supreme Court said that the Philhealth's claims that the Commission on Audit (COA) allegedly committed "grave abuse of discretion in affirming the disallowances against the agency" lacked merit.

"Be that as it may, even if the Court brushes aside the deficiency in Philhealth's allegations, there is no reason to depart from the COA's rulings," the Court argued, reiterating that the COA's move of disallowing P83 million "were grounded on the lack of executive approval."

In 2018, the COA affirmed a notice of disallowance covering more than P83 million (approximately $1.4 million) in various disbursements including anniversary gifts, birthday bonuses and even educational aid for PhilHealth personnel and officials.

At the time, the COA said the PhilHealth had no legal basis for the said benefits, adding that the disbursed monetary bonuses were not approved by then-President Benigno Aquino Jr.

According to the COA's Rules of Procedure, a Notice of Disallowance means a government transaction is either extravagant or illegal, irregular and unnecessary. Thus, the public funds used for the transactions must be returned to the government by officials, who approved the transactions.

The PhilHealth had previously insisted that it was a fiscal autonomy as a government financial institution. However, the Supreme Court pointed out that "it is already settled that the PhilHealth does not have absolute discretion in determining the compensation of its officials."

The Supreme Court's recent decision is just one of the many issues the state insurance agency has been battling with since news emerged of the alleged corruption within the administration at the peak of the pandemic.

PhilHealth's former anti-fraud legal officer Thorrson Montes Keith revealed in 2020 that a "mafia" pocketed around P15 billion (approximately $266 million), which the agency vehemently denied.

Then Sen. Franklin Drilon said the PhilHealth was non-compliant with audit rules, which led to the Senate probe into corruption allegations.

"That is why we have all these problems because you disregard all the rules designed to protect public funds," Drilon said during a hearing on the matter.

Early in 2021, the PhilHealth insisted that P15 billion in funds allegedly lost to corrupt transactions were not missing, and that 98% of the funds have been accounted for, CNN Philippines reported.

Then Sen. Panfilo "Ping" Lacson questioned the liquidation of funds, pointing out that this did not necessarily mean the money was legally disbursed for transactions the funds were designated for.

Former PhilHealth chief Ricardo Morales, who was appointed by former President Rodrigo Duterte, has since stepped down from his position, but investigations into the allegations of irregular transactions at the embattled agency ensue.

Earlier this year, the National Bureau of Investigation (NBI) filed graft complaints against 11 PhilHealth officials, including former president and CEO Dr. Celestina Ma. Jude dela Serna, who was ultimately fired by Duterte in 2018 after she was accused of going on extravagant trips in the same year the agency lost billions.