The Supreme Court (SC) En Banc on December 3, 2025, issued a landmark ruling in consolidated cases questioning the legality of the transfer of PhilHealth funds to the National Treasury.

In a unanimous decision penned by Associate Justice Amy C. Lazaro-Javier, the Court ordered the return of PHP 60 billion previously remitted by the Philippine Health Insurance Corporation (PhilHealth) to the National Treasury and permanently prohibited the transfer of the remaining PHP 29.9 billion fund balance.

The Court ruled that the provision and the circular were issued with grave abuse of discretion and violated the Universal Health Care Act (UHCA) and the Sin Tax Laws, which require PhilHealth to maintain reserve funds for social health insurance and prohibit their transfer to the national government.

“Reallocating PhilHealth’s supposed ‘excess reserve funds’ undermines the very nature of PhilHealth funds as pooled resources for social health insurance, hinders the UHCA’s goal of delivering universal healthcare, and violates the people’s right to health,” the SC said.

The ruling emphasized that Congress cannot amend substantive policy provisions of existing laws, including the UHCA, through the GAA. Any changes to PhilHealth’s reserve funds must be enacted through separate legislation.

The Court also clarified that the President did not commit grave abuse of discretion in certifying the urgency of the 2024 GAA.

The SC stressed that while the state may adopt measures to improve the economy, such measures cannot contravene constitutional guarantees of affordable healthcare for all Filipinos.

Separate opinions among the Justices highlighted varying views on the scope of invalidation. Some Justices argued for limiting the ruling solely to the fund transfer, while others called for broader scrutiny of unprogrammed appropriations under the 2024 GAA.

The SC ordered that the PHP 60 billion remitted funds be returned to PhilHealth through the 2026 GAA.