Philippine finance chief sued over alleged US$2.8bn transfer of state insurers' funds

The Philippines' finance chief is being sued over the alleged diversion of funds from the country's state insurance institutions to the national treasury. The charges were filed by health reform advocate and former adviser to the Department of Health, Dr Tony Leachon. He filed plunder and technical malversation cases before the Office of the Ombudsman against Finance Secretary Ralph Recto over the PHP60bn ($1bn) diversion of funds from PhilHealth reserve funds and PHP107bn from the Philippine Deposit Insurance Corporation (PDIC).

Dr Leachon also filed cases against Philippine Health Insurance Corporation (PhilHealth) Board Chair Teodoro Herbosa, Acting Finance Secretary Frederick Go, former Budget Secretary Rolando Toledo, PhilHealth President and CEO Edwin Mercado, former PhilHealth CEO Emmanuel Ledesma Jr., PDIC CEO Roberto Tan, and several John and Jane Does representing other PDIC directors and officials.

In 2025, Mr Recto greenlit the transfer of PHP60bn from PhilHealth’s reserve funds to the National Treasury, calling it “legal, moral, and economically sound.” “This claim collapses under the Universal Health Care Law and sin tax earmarking provisions, which mandate that these funds remain within PhilHealth to support indigent members and primary care,” said Dr Leachon.

“The result: PhilHealth deficits of PHP356.6bn from 2023 to 2025, unpaid hospitals, underfunded cancer and dialysis programs, and millions of Filipinos denied care. The PHP107bn diversion from PDIC further weakened financial safeguards meant to protect depositors, eroding public trust,” he said.

Mr Recto has said the charges are “pure harassment,” standing by the legality of the move.

But Dr Leachon said, “Sec. Recto has alluded that this issue is being ‘fanned’ by politicians. I deny this flatly. This case is not about political theater — it is about the undeniable suffering of patients denied dialysis, families forced into debt, and hospitals driven to insolvency. No rhetoric can erase the human cost of these diversions.”

Source: www.asiainsurancereview.com