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Aquino gang hijacked P10.6-B senior citizens’ funds

IT is another blatant, scandalous instance of the previous regime’s culture of impunity in violating budget laws.

Just a few months before he stepped down from power, former President Benigno Aquino 3rd in connivance with his budget secretary, Florencio Abad, and health secretary, Janette Garin, hijacked P10.6 billion in funds that were mandated by law to be used for the insurance premiums of the country’s 7 million senior citizens, according to government documents.*

This P10.6billion was instead allocated to dubious health department projects that Congress had not authorized. At best, these projects were designed to boost the Liberal Party’s candidates’ chances in the 2016 elections, by prettifying the administration’s image as taking care of citizens’ health needs.

At worst though— and probably their real nature—the projects were of the type that since the Republic’s founding have been widely known as a source of facile corruption: construction of small structures difficult to monitor if they complied with specifications, or even if they were built at all.


Another, bigger project of the Dengvaxia trio?

This P10.6 billion hijacked funds were triple the P3 billion the Aquino gang spent to buy the defective Dengvaxia vaccine. The former president’s inordinate rush to purchase it, to the point of violating budget laws, has raised widespread suspicion of corruption in the form of commissions.

The Department of Justice, as it is doing in the case of the Dengvaxia purchase, should mobilize a bigger team to investigate this alleged hijacking of funds, that if true, has endangered the Philippine Health Insurance Corp.’s finances and risked the welfare of the country’s 7 million senior citizens, the most vulnerable sector of its adult citizenry.

Two laws had ordered the government to raise this P10.6 billion to fund senior citizens’ insurance premiums for 2015 with the Philippine Health Insurance Corp. (Philhealth).

Republic Act 10351 of 2012 was the so-called “sin tax” law, which increased levies on liquor and tobacco. It required that after deducting a part of the proceeds allocated for small tobacco farmers from this levy, 80 percent of the remaining balance should be allocated for the National Health Insurance Program.

This law was followed up by Republic Act 10645 of 2014, which required that all senior citizens be covered by Philhealth’s health insurance, to be funded from the sin-tax proceeds.

For 2015, the first year of that law’s implementation, the budget department and Congress computed that P10.6 billion from the sin tax law proceeds were to be used to fund senior citizens’ insurance premiums. It was included in the Congress’ budget bill sent to Aquino for signing into law.

President Aquino, however, in his veto message to Congress in December 2014, instead classified that budget for senior citizens as part of the national budget’s “Unprogrammed Fund,” which is essentially a reserve contingent fund set aside for unforeseen developments that require bigger government expenses.

It is astonishing that Congress acquiesced to Aquino’s order, which ignored the sin-tax law. That law very categorically provided that part of the higher levies on sin products be used to fund senior citizens’ insurance premiums. How could it be classified into the budget’s “Unprogrammed Fund”?

Garin and Padilla’s letter for the senior citizens’ fund to be used elsewhere

At the time, Aquino’s act of reclassification appeared to be simply an accounting matter, as it was just one of the two dozen items in the budget that he vetoed. However, it reveals that the President had planned since that time for the fund for senior citizens to be used for purposes other than what Congress had authorized.

The template was clearly from Aquino’s infamous P150 Disbursement Acceleration Program in 2012 and 2013, under which he hijacked budgets authorized by Congress, a part of which he used to bribe senators in Chief Justice Renato Corona’s impeachment trial as well as to distribute to his allies. Quite obviously, Aquino was confident that his anointed Mar Roxas would be the next president, so that his violation of budget laws would be buried forever.

In August 2015, less than a year after the May 2016 national elections, Aquino put his plot in motion.

Garin, the new health secretary Aquino appointed in February 2015 together with Philhealth president Alexander Padilla—appointed Bureau of Customs head in 1987 by Cory Aquino—asked the budget secretary, Abad, that “P10.6 billion unprogrammed appropriations” be used instead for three purposes.

These were the construction of 4,000 “TSeKap health stations” all over the country; equipment for barangay health stations; and “infrastructure upgrading and equipment provision” for rural health units. Anyone familiar with corruption in the Philippines would see that such projects are the easiest for the corrupt to make money out of, as they are difficult to monitor.

To this day, there has been no official report or audit if the P10.6 billion was indeed used for the purposes indicated.

There have been reports though that less than 10 percent of the health stations were constructed, even as the contractors had already received the funds for these. In December 2016, a resolution was filed in the House of Representatives by two congressmen asking for an investigation of the program to build these heath stations. For some unknown reason, the investigation was aborted.

There has been no report if Philhealth ever received P10.6 billion to fund what was calculated as the money needed to cover senior citizens’ insurance premiums in 2015.

A source claimed it wasn’t. He explained that obviously the Aquino gang decided to ignore actuarial calculations that this money was needed.

Eddie Dorotan, a former mayor of a Bicol town who still is a board member representing local chief executives, was quoted in March 2016 in the local newspaper Bicol Today that Philhealth was in dire financial straits. However, then Philhealth CEO Padilla in an interview with CNN Philippines claimed that this was false, and that the state firm’s reserve funds were at a healthy P128 billion level in 2015.

Blogger Rafael Nieto—who broke the story on the hijacking of senior citizens’ funds—reported that in a presentation made early last year to the Philhealth board by director Anthony Leachon (who represents the Bangko Sentral ng Pilipinas), three different financial and actuarial projections showed that the firm would run out of reserves by the middle of this year.

If that happens, Philhealth won’t be able to pay the hospitals that have been providing medical services to senior citizens. The hospitals won’t have any option but to stop doing so, endangering the lives of vulnerable senior citizens.

Obviously the Aquino administration’s gang of three, as they did in the case of the Dengvaxia debacle, had absolutely no compunction about risking the lives of millions of Filipinos.

* I—and the nation—owe blogger Rey Joseph Nieto for breaking this Philhealth controversy in his popular blog Thinking Pinoy. I acquired several of the documents he cited, and verified his report, from my sources whom I am uncertain if they also his sources.