Health budget feared insufficient to deal with coronavirus variant
MANILA, Philippines — The Philippines’ healthcare funding would fall short this year if new and more contagious coronavirus variants trigger fresh outbreaks, a unit of Fitch Ratings said on Tuesday.
“We highlight the risk that the economy could face further COVID-19 outbreaks that divert funds towards the pandemic response and suppress revenue, thereby worsening the fiscal outlook and the budget’s ability to drive a recovery,” Fitch Solutions said in a research note.
As it stands, Fitch estimates that the Duterte government has allocated P221 billion for pandemic response this year, but the amount did not take into account the rapidly spreading variants of the deadly virus from the UK and South Africa.
This poses risks on the 2021 budget, devised one of the critical components of the Duterte administration’s stimulus this year, falling short to fund the economy’s growing needs, and thus forcing a widening of the budget gap than earlier estimated.
From an estimated P1.36 trillion in 2020, based on preliminary data, the government wants to cap the deficit at P1.78 trillion this year, a fresh record high in anticipation of larger public needs for recovery to get on track.
The chances of needing a larger health budget highly depends on whether a coronavirus variant enters and spreads, and in the case of the Philippines, the risks of that happening is high although local health authorities had maintained they have not detected the mutation so far.
“Given that the Philippines has experienced the second highest fatality rate in the South East Asia region, after Indonesia, and the discovery of more contagious strains in the UK and South Africa, the Philippines remains vulnerable to another surge in COVID-19 cases,” it explained.
It also does not help that the country is lagging behind Asia Pacific counterparts in securing vaccines for the disease, “which will mean risks remain elevated through 2021.”
In a business forum on Tuesday, Finance Secretary Carlos Dominguez III tried to assure businesspeople that the government is liquid enough to finance the ongoing battle against COVID-19.
“The public health emergency could last for months or possibly years. The battle against COVID-19 is going to be a marathon, not a sprint…Let me assure you that the Duterte administration has ample ammunition to outlast this enemy,” the finance chief said in a speech.
As for the risk brought by the new COVID-19 variant, Budget Secretary Wendel Avisado said in a text message that the economy must be able to reopen and regain strength cautiously.
“Efforts must also be geared towards allowing the economy to recover hence the need to further open up and allow businesses to operate at a higher scale,” Avisado said.
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