Garin, Padilla face graft complaint over P10.6-B PhilHealth seniors' fund

MANILA, Philippines – Former health secretary Janette Garin and former Philippine Health Insurance Corporation (PhilHealth) chief executive officer Alex Padilla face a graft complaint for using funds meant for senior citizens to set up barangay health units nationwide.

PhilHealth interim president Celestina Ma Jude de la Serna filed the complaint before the Office of the Ombudsman on March 27. The copy of the complaint was only given to the media on Tuesday, May 29, during the joint congressional oversight hearing on the agency's performance.

De la Serna accused Garin, who also served as PhilHealth chairperson then, and Padilla of violating Section 3 of Republic Act (RA) No. 3019 or the Anti-Graft and Corrupt Practices Act.

The law prohibits "causing any undue injury to any party, including the government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence."

Garin and Padilla supposedly waived P10.6 billion originally meant for the payment of senior citizens' insurance premiums, in favor of the establishment of rural health units by the Department of Health (DOH) all over the country.

The current PhilHealth leadership claims the two had no authority and basis for that move, which allegedly put PhilHealth and senior citizens at a disadvantage.

On April 28, 2015, then CEO Padilla sent a letter to Garin to ask the Department of Budget and Management (DBM) to process the Special Allotment Release Order (SARO) and release the funds as payment for the senior citizens, as mandated by RA 10645 or the Expanded Senior Citizens Act and the National Health Insurance Program.

But nearly 4 months after, on August 5, Padilla and Garin wrote a letter to then DBM chief Florencio Abad and requested, without approval of the PhilHealth Board, for the immediate release of the P10.6 billion for the DOH's Health Facilities Enhancement Program (HFEP) instead.

The following day, Garin sent another letter to Abad requesting for the release of the SARO for the HFEP.

On August 28, Garin sent a follow-up letter to Abad informing him that senior citizens and other indigents not yet covered are being enrolled in PhilHealth. Their premiums, she said, would be paid using the income of participating government hospitals or the Medical Assistance Program.

For 2016, she said the premiums would be included in the proposed General Appropriations Act or national budget.

These actions, PhilHealth said, "[deprived] them of P10.6 billion intended for senior citizens' premium and benefits."

PhilHealth Board Director Tony Leachon admitted this is just one of the causes of the agency's financial decline. He said the P10.6 billion has already been included in PhilHealth's financial statement as payments receivable from the national government.

He also said collection inefficiency was the major cause.

"Ginawa namin accounts receivable 'yun, umaasa kami. Ang net loss kasi multi-factorial, isa 'yun na nagpasama ng financial statement kasi bumaba agad ang reserve fund," Leachon told reporters.

(We indicated it in our accounts receivable, we're hoping to get it. Net loss is multi-factorial. It is one reason that worsened the financial statement because the agency's reserve fund went down.)

"Baka masentro tayo na ang may kasalanan ay 'yung P10 billion. Hindi rin. 'Yung collection efficiency din (But we might focus on P10 billion as the main cause of the decline. Not really. Collection efficiency is also a factor). Pangatlo ay (The third is) leakages brought about by abuses caused by upcasing of pneumonia, etc," he added.

Senate health committee chairman Joseph Victor Ejercito slammed Garin and Padilla, calling them the masterminds of "a heinous act 3 times [more] cruel than the Dengvaxia fiasco."

He also alluded to wrongdoing, as he said the diversion of funds happened the same time as the Dengvaxia dengue vaccine procurement.

"I can only describe this act as utterly heartless and insensitive to the condition of our senior citizens. I can't find good conscience in this," he added.

No law violated, scapegoats?

But Garin and Padilla denied corruption accusations and said the current PhilHealth Board is just looking for scapegoats amid the agency's multibillion-peso net loss.

Padilla said there was no law violated, adding that it was just "part of management's prerogative."

"It was merely a request which was in accordance with law and does not require board approval. Besides, the secretary of the DOH is chair of the [PhilHealth] Board. To emphasize, no money was lost. No allegation of corruption or that it was against the law," Padilla told Rappler.

Garin, meanwhile, called for a third-party audit of the funds.

"Why are some officials looking for a scapegoat [for] the real reason behind their disastrous financial situation? An external, credible audit should be done instead of too much politicking," Garin told Rappler in a separate text message.

In response to Ejercito, Padilla and Garin lamented why they were not given the chance to explain their actions.

"Nakinig lang siya sa iilan na nagsisinungaling. Sasagutin ko talaga sa Ombudsman and I am confident [the] truth shall prevail and [the complaint] will be dismissed," Padilla said.

(He just chose to listen to the few who are lying. I will really answer the allegations before the Ombudsman and I am confident [the] truth shall prevail and [the complaint] will be dismissed.)

"Nakakalungkot at pawang pamumulitika ang ginagawa ng iba (It saddens me that others are busy politicking). I used to have high hopes in Senator JV's desire to know the truth and that means he should hear all sides, including mine," Garin said. – Rappler.com

Camille Elemia

Camille Elemia is Rappler's lead reporter for media, disinformation, and democracy. She won an ILO award in 2017. She received the prestigious Fulbright-Hubert Humphrey fellowship in 2019, allowing her to further study media and politics in the US. Email camille.elemia@rappler.com

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