THE Philippine focus on infrastructure investment has led to a corresponding lack of funding for social services like healthcare, with the resulting inability to efficiently deal with a public health crisis highlighting the country’s exposure to “highly negative risk,” Moody’s Investors Service said.
“The pandemic has highlighted existing gaps in health infrastructure in some parts of Asia. For instance, health and safety have been identified as a source of ‘highly negative’ risk for India and the Philippines,” Moody’s said in a note Tuesday.
Moody’s said there is a “traditional emphasis” on supercharging growth through infrastructure spending, which in light of events may now need to expand to other areas like social spending, healthcare, and pensions.
The government hopes to spend P1.2 trillion on infrastructure in 2021 to revive the economy and create jobs.
“Improving healthcare access in emerging economies, alongside ageing populations across higher-income Asian economies, could spur demand for healthcare products and services,” Moody’s said.
Moody’s warned that the pandemic could still take an unpredictable turn, potentially straining the public health system and disrupt business activity.
“At the sovereign level, potentially weaker growth prospects stemming from continued uncertainty around trade, geopolitics and health outcomes, as well as exposures to commodities and tourism sectors, will weigh on revenue generation and shock-absorption capacity,” Moody’s said.
Moody’s expects the economy to grow by 7% this year, against the 6.2% forecast it issued in September. However, it expects the Philippine recovery to lag the region. — Luz Wendy T. Noble