THE system used by the Philippine Health Insurance Corporation (PHIC) in its Interim Reimbursement Mechanism (IRM) and the management of the payment of its taxes were in place long before the tenure of the current PHIC Fund Management Sector chief, and has not resulted in any fund losses for the government.
This is according to PHIC Fund Management Sector Senior Vice President Renato Limsiaco, who in an August 28, 2020 letter to the PHIC Board of Directors (BOD) pointed out that PHIC Board Resolution (PBR) No. 2515, S. 2020 states that the IRM “was implemented in several instances in the past, such as during Typhoon Yolanda in 2013, the Marawi Armed Conflict in 2017 and the Taal Volcanic Eruption in early part of 2020.”
“Clearly, the manner of recording the IRM as well as the treatment of taxes which are consequential thereto have long been established.”
The career PHIC executive explained that the PHIC Board itself approved the inclusion of the IRM in PBR No. 2496, S. 2020 issued on January 30, 2020 resolution, which states that “the Board resolves, as it is hereby resolved, to approve the inclusion of IRM among the special privileges that may be conferred during fortuitous events and emergencies, thereby amending PhilHealth Board Resolution No. 1848, s. 2013 for this purpose.”
The PHIC Board subsequently issued PBR No. 2515, S. 2020 on March 31, 2020 to ratify the implementation of IRM nationwide due to the COVID-19 pandemic.
According to Limsiaco, following the PHIC Board’s approval of the implementation of the IRM in May 7, 2020, the PHIC issued Corporate Order No. 2020-0033 signed by former PHIC Chief Executive Officer BGen. Ricardo C. Morales, which laid out the guidelines and procedures in the recording and reporting of benefit claims under the IRM.
“Specifically, the said Corporate Order stated that the initial release of the IRM is in the nature of the issuance of an advance to the recipient, and requires no tax to be withheld,” said Limsiaco.
The PHIC execom member clarified that the payment of withholding taxes “is a government to government transaction and that no money has been lost on the part of the government as this involves a transfer of money from one government agency to another.”
“It is clear that I simply followed the directives of the PCEO as well as those issued by the Board in the implementation of the IRM and the payment of the tax,” he added.
Limsiaco reiterated that he executed his functions to the utmost of his ability, “as should be customary, with the information I had at the time in order to protect the Corporation from incurring any liability.”
“As held in the case of Carlos R. Saunar v. Executive Secretary Eduardo R. Ermita, I cannot be said to have been negligent as I have consistently shown my desire to fulfill my duties and responsibilities and I never had any intention to do otherwise.”