The Office of the Ombudsman has cleared Executive Secretary Ralph Recto and former PhilHealth chief Emmanuel Rufino Ledesma Jr. of criminal and administrative complaints regarding the controversial transfer of ₱60 billion in PhilHealth reserve funds to the National Treasury.
In a resolution dated June 2, the anti-graft body ruled that there was insufficient prima facie evidence to sustain charges of plunder, technical malversation, graft, and grave misconduct against the officials. The Ombudsman concluded that the evidence failed to establish a reasonable likelihood of conviction.
Furthermore, the resolution dismissed allegations that Recto personally profited from the transaction, pointing out that the funds were subsequently returned to PhilHealth following a Supreme Court directive.
”On the contrary, DOF Secretary Recto was commended…for his commitment to return the ₱60 billion to PhilHealth. Thus, the return of the ₱60 billion to PhilHealth militates against the allegation that respondents took advantage of their positions for ‘personal enrichment,'” the resolution read.
The legal battle originated from Department of Finance Circular No. 003-2024, signed by Recto during his tenure as finance secretary. The circular mandated the transfer of ₱89.9 billion in PhilHealth excess reserve funds to finance unprogrammed appropriations under the 2024 General Appropriations Act (GAA).
PhilHealth had already remitted ₱60 billion in three separate tranches before the Supreme Court intervened, issuing a temporary restraining order and ultimately declaring the fund transfer invalid on December 3, 2025.
Despite the high court’s ruling on the invalidity of the transfer, the Ombudsman determined that Recto did not act with bad faith, corruption, manifest partiality, or improper motives.
In his defense, Recto stated in his counter-affidavit that he was simply performing his “legal and ministerial duty” to execute the 2024 national budget, which carried the presumption of constitutionality at the time.
“As to the claim that the transfer of the PhilHealth Reserve Funds to the National Treasury caused undue injury to the Filipino people by risking the health care program of the Philippines, RECTO contends that complainants did not elaborate how the supposed risk arose as the alleged “risk” to the health care program of the Philippines is not the undue injury that would give rise to violation of Section 3(2) of RA 3019,” the resolution stated.
Recto also noted that his decisions were backed by consultations and legal opinions from key oversight bodies, including the Office of the Government Corporate Counsel (OGCC), the Governance Commission for Government-Owned or -Controlled Corporations (GCG), and the Commission on Audit (COA).
Addressing the plunder allegations, the Executive Secretary maintained that the transaction was a standard movement of public funds between state entities, with no evidence showing that any portion of the money was diverted for personal gain.
He argued that “mere movement of public funds does not, by itself, constitutes plunder.”