Plunder, Graft Charges Filed vs Recto, Ex-PhilHealth Exec Over P60B Transfer

A Duterte-allied coalition has filed a plunder and technical malversation complaint against Executive Secretary Ralph Recto and former Philippine Health Insurance Corp. (PhilHealth) president Emmanuel Ledesma Jr. over the transfer of P60 billion in excess reserve funds to the national treasury.

The 15-page complaint-affidavit was filed on Monday before the Office of the Ombudsman by the Save the Philippines Coalition.

The group is seeking the dismissal of Recto and Ledesma from government service for alleged violations of Article 220 of the Revised Penal Code on technical malversation, Republic Act (RA) No. 3019 or the Anti-Graft and Corrupt Practices Act, RA 7080 or the Anti-Plunder Act, and RA 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees.

Among the complainants are Irene Caballes, Elmer Jugalbot, Gerlyn Ogong, Emerita Pecson, Susan Villar, Mussolini Lidasan, Jose Olivar, and Jaime Miralles.

They also asked the Ombudsman to file criminal charges against Recto and Ledesma before the Sandiganbayan for plunder and graft.

In their complaint, the coalition accused Recto and Ledesma of “knowingly, willfully, maliciously, with evident bad faith, dishonesty and grave misconduct, unlawfully, illegally and intentionally transferred” the P60 billion in PhilHealth reserve funds to the national treasury.

They said the move caused “great damage and prejudice to the government.”

The complainants cited provisions of RA 7875, or the National Health Insurance Act of 1995, which provide that when PhilHealth’s actual reserves exceed the required ceiling at the end of the fiscal year, “the program’s benefits shall be increased or member contributions decreased prospectively in order to adjust expenditures or revenues to meet the required ceiling for reserve funds.”

They also invoked Section 11 of RA 11223, or the Universal Health Care Act of 2019, which states that “no portion of the reserve fund or income thereof shall accrue to the general fund of the national government or to any of its agencies or instrumentalities, including government-owned or -controlled corporations (GOCCs).”

According to the coalition, both Recto and Ledesma “intentionally transgressed said provisions of statutes for political patronage.”

They specifically accused Recto, who was then finance secretary, of including PhilHealth reserve funds among the excess funds of GOCCs despite what they described as explicit legal prohibitions.

Ledesma, meanwhile, was alleged to have “acquiesced to the unlawful directive of respondent Recto,” making him equally liable for technical malversation.

The case stems from the transfer of P60 billion from PhilHealth’s P89.9 billion in unused government subsidies to the national treasury. The funds were intended to finance unprogrammed appropriations under the 2024 General Appropriations Act.

Recto issued a directive on April 24, 2024, ordering PhilHealth to remit the amount, which the PhilHealth board later approved.

The fund transfer was widely criticized and challenged by various groups. On Dec. 3 this year, the Supreme Court ordered the return of the P60 billion to PhilHealth and barred the transfer of the remaining P29.9 billion.

However, the high court did not rule on any criminal liability arising from the transaction, noting that the consolidated petitions before it were special civil actions limited to determining whether there was grave abuse of discretion.

This is not the first time Recto has faced accusations related to the PhilHealth fund transfer.

The 1Sambayan Coalition, which filed one of the petitions questioning the transfer before the Supreme Court, had earlier alleged that Recto committed technical malversation and possibly plunder when he ordered the remittance.

Under a 2006 Supreme Court ruling, technical malversation occurs when a public officer who has custody or control of public funds applies those funds to a public use different from that for which they were appropriated by law.

Recto, for his part, welcomed the filing of the complaint, saying it provided him an opportunity to explain his side and reiterate his innocence.

He said he respects the right of citizens to seek redress before the courts and pledged to cooperate with the Ombudsman’s investigation.

“But let me reiterate my innocence, as opined by Supreme Court Justices, that no criminal liability may attach to me, as former Secretary of Finance, for acting in good faith and in accordance with a direct mandate from Congress in ordering the remittance of PhilHealth’s unused funds,” Recto said in a statement sent to reporters.

“With the able representation by the Solicitor General, I welcome the opportunity to clarify the issues, prove my innocence, and debunk the allegations put forth,” he added.

Four justices of the Supreme Court earlier expressed the view that Recto did not incur criminal liability in ordering the remittance of PhilHealth’s unused subsidies to the national treasury in 2024.