Recto: Returning PhilHealth, PDIC funds could raise deficit

Finance Secretary Ralph G. Recto stated that any funds taken from PhilHealth and PDIC will be returned in the next budget cycle if a Supreme Court order is issued.

Recto emphasized during a House Committee on Appropriations briefing on Monday that complying with such an order would increase the deficit, which currently stands at 5.7% of GDP for the first half of the year.

Akbayan Party-list Rep. Jose Manuel Diokno had raised concerns about the potential impact of a Supreme Court ruling to return P60 billion to PhilHealth and P104 billion to PDIC.

Recto noted that while the deficit remains manageable, it could affect credit ratings if funds are returned; Fitch Ratings reaffirmed the Philippines' BBB credit rating with a stable outlook in April.

As of July, government-owned or -controlled corporations remitted P105 billion to the Bureau of Treasury, and Recto said the government is open to cutting taxes if the deficit falls to 3% of GDP.

Sovereign debt reached a record high of P17.27 trillion by June end, with the debt-to-GDP ratio at 63.1%, expected to peak at 61.8% in 2026 before declining to 58% by 2030.