Weak fiscal arguments

The controversy surrounding the return of idle Phil- Health funds illustrates how fragile political narratives become when they are built on misunderstood fiscal concepts.

- MARY ANN LL. REYES

What began as a technical debate over budget mechanics has been inflated into allegations of executive wrongdoing, impeachment threats and character attacks against senior officials. Yet the more this narrative is stretched, the more it reveals its own structural weaknesses.

To recall, the Supreme Court has declared unconstitutional a provision in the 2024 General Appropriations Act that ordered the Department of Finance to facilitate the transfer of excess funds of government-owned or-controlled corporations to the National Treasury to finance unprogrammed appropriations. The High Court similarly voided a circular issued by the DOF directing PhilHealth its excess funds to the Treasury. PhilHealth transferred P60 billion.

The SC unanimously ordered the return of this P60 billion to the National Treasury and permanently prohibited the transfer of the remaining P29.9 billion balance but did not find any liability on the part of the President and the DOF Secretary, who at the time was Ralph Recto, now Executive Secretary.

Several SC Justices who submitted their respective separate opinions noted that no criminal liability can attach to the Finance Secretary, who they found had acted in good faith in implementing Special Provision 1(d) of the 2024 GAA.

The Supreme Court, being the court of last resort, is considered the final arbiter of all legal questions brought before it. However, there were quarters that wanted to drag the issue further, this time insisting that the members of the executive branch should be found liable for the transfer.

At the center of the controversy is a fundamental conflation: revenue collection is being confused with spending decisions. It is the executive branch that collects these revenues in the form of taxes, dividends, or even idle or excess funds of GOCCs. How to spend it is, however, a matter that is a legislative prerogative.