FITCH Solutions, the research arm of the Fitch Group, on Tuesday warned that the Philippines’s funding allocation for healthcare may not be enough, especially as the country will remain vulnerable to potential outbreaks without a vaccination program in place.
In a research note, Fitch Solutions particularly noted the breakdown of the 2021 national government budget, which was signed into law in end-December of last year.
The P4.5-trillion national budget, which was 9.9 percent larger than the previous year’s, was passed with the goal of “addressing the pandemic, boosting infrastructure development, generating job opportunities and assisting communities adapt to the post-pandemic life.”
Education, public works and local governments were the top three beneficiaries of the 2021 national budget.
Fitch Solutions cautioned that risks could emanate from potential further Covid-19 outbreaks in 2021, as seen in both developing and emerging economies, and could expose the limited funding allocation toward the pandemic response.
The Department of Health (DOH) has the fourth largest budget by department at P210.2 billion.
“The budget allocated toward its pandemic response is around 4.9 percent of the total budget and only 1.1 percent of GDP [gross domestic product],” Fitch Solutions said.
“Given that the Philippines has experienced the second-highest fatality rate in the Southeast 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 added.
Of the P210.2 billion budget of the DOH, P2.5 billion is allocated for vaccine procurement. Another P70 billion is provided under unprogrammed appropriations vaccine procurement and logistics. These unprogrammed appropriations may only be tapped when any of the following exists: (1) excess revenue collections; (2) new revenue sources; and (3) approved loans for foreign-assisted projects.
“We expect the Philippines to lag behind other Asia-Pacific economies in securing vaccines for the population, which will mean risks remain elevated through 2021,” Fitch said.
“We highlight the risk that the economy could face further Covid-19 outbreaks that divert funds toward the pandemic response and suppress revenue, thereby worsening the fiscal outlook and the budget’s ability to drive a recovery,” Fitch Solutions said.
Consistent with the provisions of the Constitution, the education sector received the largest portion of the national budget with an allocation of P751.7 billion or 16.7 percent of the budget.
This is followed by the Department of Public Works and Highways’ (DPWH) budget of P695.7 billion and the Department of the Interior and Local Government’s (DILG) P249.3-billion budget.