The Office of the Ombudsman has cleared Executive Secretary Ralph Recto and former Philippine Health Insurance Corp. (PhilHealth) President and Chief Executive Officer Emmanuel Ledesma Jr. of criminal and administrative charges stemming from the transfer of ₱60 billion in PhilHealth funds to the National Treasury in 2024.
In a consolidated resolution dated June 2, the anti-graft agency ruled that the complaints failed to establish sufficient grounds for charges of plunder, graft, technical malversation, and other administrative violations related to the implementation of a provision in the 2024 General Appropriations Act (GAA), which authorized the remittance of excess funds from government-owned and controlled corporations to the National Treasury.
The Ombudsman said the cases were dismissed for lack of prima facie evidence to support criminal liability and for insufficient evidence to warrant administrative sanctions.
The Ombudsman ruled that the plunder allegation lacked a key element required under Republic Act 7080 or the Anti-Plunder Act, noting that the questioned ₱60 billion had already been returned to PhilHealth.
According to the resolution, the return of the funds undermined claims that Recto and Ledesma amassed or acquired ill-gotten wealth amounting to at least ₱50 million for personal benefit, a requirement for a plunder offense.
The anti-graft body also dismissed allegations under Republic Act 3019 or the Anti-Graft and Corrupt Practices Act, saying complainants failed to establish that the respondents acted with manifest partiality, evident bad faith, gross negligence, or corrupt intent.
It added that there was no proof the transfer caused undue injury to the government or granted unwarranted benefits to any private party.
Instead, prosecutors found that the transfer was carried out as part of the respondents’ official duties in implementing the provisions of the 2024 national budget.
The resolution noted that Recto, then serving as finance secretary, issued Department of Finance Circular 003-2024 to implement the budget provision, while Ledesma, as PhilHealth chief, complied with the directive.
The complaint for technical malversation was likewise dismissed.
Under Philippine law, technical malversation involves the application of public funds to a purpose different from that authorized by law. While criminal intent is not an essential element of the offense, prosecutors said there must still be proof the accused deliberately committed the prohibited act.
The Ombudsman found both officials acted under the belief that the ₱60 billion formed part of PhilHealth’s excess reserve funds that could legally be remitted to the National Treasury under the special provision of the 2024 GAA.
The ruling described this belief as having been made in good faith, even if later questioned.
The anti-graft body also considered the government’s subsequent commitment to return the funds to PhilHealth, a position that Recto communicated before the Supreme Court during legal proceedings involving the transfer.
“The peculiar circumstances of this case compel this Office to dismiss the criminal charge for Technical Malversation primarily on the failure of complainants to establish with moral certainty the respondents’ intent to perpetrate the offense,” the resolution stated.
The controversy stemmed from the implementation of a special provision in the 2024 GAA that authorized Government-Owned and Controlled Corporations (GOCCs) to remit excess reserve funds or unused balances to the National Treasury to finance unprogrammed appropriations.
As finance secretary at the time, Recto issued the implementing guidelines for the transfer, while Ledesma oversaw PhilHealth’s compliance with the directive.
The transfer of PhilHealth funds drew legal challenges from various groups that questioned the legality of using the state insurer’s reserve funds to finance other government expenditures.
In Dec. 2025, the Supreme Court ordered the return of the ₱60 billion transferred to the National Treasury and permanently prohibited the transfer of the remaining ₱29.9 billion fund balance.
The Ombudsman’s resolution dismissed criminal and administrative complaints against Recto and Ledesma for its lack of sufficient evidence.
