PhilHealth benefits worth PHP 204 million have been annulled by the Court of Appeals, decision upheld by the Supreme Court
In a hard-hitting decision, the Supreme Court has upheld the Commission on Audit's (COA) disallowance of P204.07 million worth of unauthorised benefits given to Philippines Health Insurance (PhilHealth) personnel from 2007 to 2008.
In a commonsensical, unanimous decision penned by Associate Justice Henri Jean Paul Inting, the Court has given the green light to the COA's notices of disallowance (ND) on a variety of gifts and benefits, approved by the PhilHealth board during the aforementioned period:
- Efficiency Gift: P16.2 million
- Birthday Gift: P5.97 million
- Special Event: P8.7 million
- Nominal Gift: P29.5 million
- Education Assistance: P49.28 million
- Project Completion Benefit: P4.98 million
- Payment of liability insurance premium for PhilHealth board of directors and officers: P638,000
- Corporate transition and achievement premium: P81.05 million
- Medical mission critical allowance: P7.91 million
The PhilHealth's resident auditor issued the notice of disallowance against the payment of insurance premium for PhilHealth executives, as it violated Section 73 of Republic No. Act 9184 or the Government Procurement Reform Act, and Government Procurement Policy Board Resolution No. 21-05.
The other notices of disallowance were issued due to the benefits being released without prior approval of the Office of the President (OP) — in violation of Memorandum Order No. 20 of June 2001, and Administrative Order No. 103 of August 31, 2004.
The High Court has now directed PhilHealth to make its employees, who received the 'efficiency gift', return the amount they received since it was erroneously given to them. Failing to return the P16.2 million could result in 'unjust enrichment' on their part.
Back in 2012, the COA-Corporate Government Sector rejected PhilHealth's appeals related to the notices of disallowance. In 2016, COA dismissed PhilHealth's petition for review due to lack of merit and for being filed too late.
COA also stated that the actions of PhilHealth officials who authorised, approved, or certified the benefits could not be deemed as done in good faith, as these had no prior OP approval, as required by law.
Defending its actions, PhilHealth argued that it had the autonomy to grant benefits without needing approval from the OP. However, the Court disagreed, stating that the grant of benefits must be in accordance with the law or specifically authorized by a Department of Budget Management issuance.
"Considering that the ruling of the Court on the need for approval from the OP has long been in existence, the Court cannot allow PHIC to feign ignorance to the pronouncement," the High Court said.
"Given the foregoing, the Court is unconvinced that the officers of PHIC who approved the benefits in question acted in good faith when they approved and granted these benefits," it added.
Last year, PhilHealth garnered intense scrutiny from Congress after a whistleblower revealed the misappropriation of around P2 billion in Interim Reimbursement Mechanism (IRM) funds. Stay tuned for more updates on this developing story.
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The Supreme Court's decision aligns with the Commission on Audit's (COA) disallowance of millions spent on unauthorized benefits in the business sector, specifically at the Philippines Health Insurance (PhilHealth), which sparked a political debate. The Court's ruling on the need for approval from the Office of the President (OP) for such benefits highlights the importance of adhering to laws and regulations in the general-news sphere, as PhilHealth's argument for autonomy was not favored.
