FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
) 
) 
) 
First Regular Session 
SENATE 
S. B. No. 2653 
Introdnced by Senator Ralph G. Recto 
Explanatory Note 
'11 
JAN 25 P 1 :13 
As the budget deficit is seen to reach over P325 billion for 2010, the national government is looking 
at ali its resources in order to provide funding for its social progress programs. While it is true that the 
country's revenue targets depend on the growth of the economy and the efficiency in tax collections, there 
are other sources of funds which can be tapped. 
For example, several revenue-generating government-owned and controlled corporations (GOCCs) 
and government financial institutions (GFIs) have billions in retained earnings waiting to be tapped and 
channeled to the right government programs. One such GOCC is the Philippine Health Insurance 
Corporation (PhilHeaith). 
During a recent budget hearing at the Senate, PhilHeaith officials bared that the corporation has 
retained earnings reaching Pl1 0 billion. This amount is three times the proposed budgetary allocation for the 
Department of Health (DOH) next year and could easily be used to wipe out the infrastructure backlog of 
department. 
However, Republic Act No. 7875 or the PhilHealth law states that 'its retained earnings, in excess of 
its statutorily-determined reserve funds, can only be used for investments purposes. 
The proposed budget of the DOH when it comes to infrastructure is at P7.143 billion, but it said it 
needs more or less double or triple the amount to wipe out the backlog in its Health Facilities Enhancement 
Program. 
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This biB aims to make use of a portion of the excess of PhilHealth's reserve funds to augment the 
DOH's budget for health-related infrastructu're projects. It also reduces from two years to one year the 
reserve funds ceiling, or the amount set aside which is actuarially estimated for the corporation's program 
expenditures. 
With these in mind, the immediate passage of this bill is sincerely sought. 
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FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES • 
First Regular Session 
) 
) 
) 
SENATE 
S.B.No. 2653 
Introduced by Sen. Ralph G. Recto 
AN ACT 
'n 
,IAN 25 i' 1 :1 3 
EARMARKING FIFTY PERCENT (50%) OF PHILHEALTH'S EXCESS RESERVE FUNDS 
TO FUND PUBLIC HEALTHCARE INFRASTRUCTURE DEFICIT, AMENDING FOR THE 
PURPOSE REPUBLIC ACT NO. 7875, OTHERWISE KNOWN AS "AN ACT INSTITUTING A 
NATIONAL HEALTH INSURANCE PROGRAM FOR ALL FILIPINOS AND ESTABLISHING 
THE PHILIPPINE HEALTH INSURANCE CORPORATION" 
, 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled. 
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SECTION 1. 
This Act shall be known as the "Public Healthcare Infrastructure Fund Act of 
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2011." 
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SEC. 2. 
Section 27 of Republic Act No. 7875, or An Act Instituting A National Health 
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Insurance Program For All Filipinos And Establishing The Philippine Health Insurance 
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Corporation For The Purpose, is hereby amended to read as follows: 
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"SEC. 27. Reserve Funds. - The Corporation shall set aside a portion of its 
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accumulated revenues not needed to meet the cost of the current year's expenditures as 
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reserve funds: Provided, That the total amount of reserves shall not exceed a ceiling 
, 
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equivalent to the amount actuarially estimated for [two] ONE year's projected 
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Program expenditures: Provided, further, That whenever actual reserves exceed the 
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required ceiling at the end of the Corporation's fiscal year, the Program's benefits shall 
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be increased or member-contributions decreased prospectively in order to adjust 
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expenditures or revenues to meet the rf)quired ceiling for reserve f\mds. Such portions 
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of the reserve fund as are not needed to meet the current expenditure obligations shall 
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be SET ASIDE TO BE USED FOR THE FOLLOWING PURPOSES: 
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1. 
FIFTY 
PERCENT 
(50%) 
OF 
THIS 
AMOUNT 
SHALL 
BE 
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AUTOMATICALLY EARMARKED TO AUGMENT THE DEPARTMENT OF 
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HEALTH'S HEALTH FACILITIES ENHANCEMENT PROGRAM FOR THE 
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NEXT FISCAL YEAR AND SHALL BE KNOWN AS THE "PUBLIC 
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HEALTH CARE INFRASTRUCTURE FUND." THIS FUND SHALL BE 
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MANAGED BY THE DOH ACCORDING TO RULES AND REGULATIONS 
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THAT SHALL BE PROMULGATED BY THE DEPARTMENT OF BUDGET 
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AND MANAGEMENT. 
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2. 
THE REMAINING FIFTY PERCENT (50%) SHALL BE invested in short-
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term investments to earn an average annual income at prevailing rates of interest and 
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shall be known as the "Investment Reserve Fund" which shall be invested in any or all 
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of the following: 
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a) In interest-bearing bonds, securities or other evidences of indebtedness of 
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the Government of the Philippines, or in bonds, securities, promissory notes and other 
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evidences of indebtedness to which full faith and credit and unconditional guarantee 
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of the Republic of the Philippines is pledged 
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b) In interest-bearing deposits and loans to or securities in any domestic bank 
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doing business in the Philippines: Provided, That in the case of such deposits, this 
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shall not exceed at any time the unimpaired capital and surplus or total private 
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deposits of the depository bank, whichever is smaller: Provided, further, That said 
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bank shall first have been designated as a depository for this purpose by the Monetary 
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. Board of the Bangko Sentral ng Pilipinas; and 
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c) In preferred stocks of any solvent corporation or institution created or 
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existing under the laws of the Philippines: Provided, That the issuing, assuming, or 
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guaranteeing entity or its predecessor has paid regular dividends upon its preferred or 
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guaranteed stocks for a period of at least three (3) years immediately preceding the 
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date of investment in such preferred or guaranteed stocks: Provided, further, That if 
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the stocks are guaranteed the amount of stocks so guaranteed is not in excess of fifty 
27 
percent (50%) of the amount of the preferred common stocks as the case may be of 
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the issuing corporation: Provided, furthermore, That if the corporation or institution 
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has not paid dividends upon its preferred stocks, the corporation or institution has 
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sufficient retained earnings to declare dividends for at least two (2) years on such 
2 
preferred stocks and in common stocks option or warrants to common stocks of any 
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solvent corporation or institution created or existing wlder the laws of the Philippines 
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in the stock exchange with proven track record of profitability and payment of 
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dividends over the last three (3) years or in common stocks of a newly organized 
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corporation about to be listed in the stock exchange: Provided, finally, That such 
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duly organized corporation shall hav,e been rated 'A' double 'A's or triple 'A's by 
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authorized accredited domestic rating agencies or by the Corporation or in mutual 
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funds including allied investments. 
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SEC. 3. Implementing Rules and Regulations. - The Secretary of the Department of Budget 
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and Management shall, upon consultation with the Secretary of the Department of Health and with 
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the President of the Philippine Health Insurance Corporation, shall promulgate the necessary rules 
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and regulations for the effective implementation of this Act within sixty (60) days from the 
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approval of this Act. 
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SEC. 4. Separability Clause. -
If any provision of this Act is subsequently declared 
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unconstitutional, the validity of the remaining provisions hereof shall remain in full force and 
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effect. 
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SEC. 5. Repealing Clause. -
All laws,' decrees, executive orders, rules and regulations and 
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other issuances or parts thereof which are inconsistent with this Act are hereby repealed or 
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modified accordingly. 
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SEC. 6. Effectivity. - This Act shall take effect fifteen (15) days after its publication in any two 
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(2) newspapers of general circulation. 
Approved, 
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SECTION 12. Separability Clause. -
Should any provIsion herein be subsequently 
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declared invalid or unconstitutional, the same shall not affect the validity or the legality 
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of the other provisions not so declared. 
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SECTION 13. Repealing Clause. -
All laws, presidential decrees, executive orders, 
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rules and regulations, other issuances, and parts thereof, which are inconsistent with 
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the provisions of this Act, are hereby repealed and modified accordingly. 
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SECTION 14. Effectivity. - This Act shall take effect fifteen (15) days after publication in 
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the Official Gazette or in at least (2) newspapers of general circulation. 
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Approved, 
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