MANILA – Finance Secretary Ralph Recto and former Philippine Health Insurance Corporation (PhilHealth) president Ricardo Morales have been charged with graft before the Office of the Ombudsman over the alleged irregular transfer of P10.9 billion in PhilHealth funds to the Bureau of the Treasury in 2020. The complaint, filed by a coalition of health advocacy groups and former PhilHealth officials on December 23, 2025, accuses the two of violating the Anti-Graft and Corrupt Practices Act (RA 3019) by facilitating the transfer without proper legal basis and transparency.
The case revives scrutiny of a controversial 2020 decision during the height of the COVID-19 pandemic, when PhilHealth—then under Morales—transferred billions in excess funds to the Treasury as “savings” for pandemic response. Critics argued the move lacked congressional authorization and bypassed PhilHealth’s mandate to retain reserves for member benefits.
Recto, then a senator and chair of the Senate ways and means committee, allegedly endorsed or facilitated the transfer through legislative oversight. Complainants claim both officials caused undue injury to PhilHealth members by depleting reserves needed for claims and benefits.
Both Recto and Morales have yet to issue detailed responses, but sources close to Recto maintain the transfer was lawful and necessary for national emergency funding. Morales, who resigned in 2020 amid separate controversies, has previously defended the action as compliant with existing rules.
The Ombudsman will determine probable cause, with potential penalties including imprisonment and perpetual disqualification from public office if convicted.
This complaint adds to ongoing debates over PhilHealth fund management, amid calls for stronger safeguards in the Universal Health Care law implementation.
Case Snapshot:
| Accused | Position (2020) | Alleged Violation |
|---|---|---|
| Ralph Recto | Senator; Ways & Means Chair | Graft (RA 3019) |
| Ricardo Morales | PhilHealth President | Graft (RA 3019) |
| Amount Involved | P10.9 billion | Irregular transfer to Treasury |