Vaccine impact on global recovery to be uneven

MANILA, Philippines — As markets worldwide cheered the announcement last week of a COVID-19 vaccine breakthrough by American drug maker  Pfizer-BioNtech, London-based Capital Economics said the impact of a successful vaccine on recovery is expected to be uneven.

Last week, the US drug manufacturer announced that its COVID-19 vaccine was found to be 90 percent effective.

In a report, Capital Economics chief economist Neil Shearing said that owing to the gaps in access and status of lockdowns, the impact of the deployment of a successful vaccine would be highly uneven across global regions.

“The Pfizer-BioNTech news boosted markets this week, but this is good news with caveats,” he said.

He said that this could mean significant upside for economies like the US and the United Kingdom which have already made preorders of millions of doses.

Access would be more difficult for countries in Emerging Asia, according to Shearing. “For some emerging markets, there will be uncertainties about accessing a vaccine,” he said.

Meanwhile, the transportation of vaccines will boost demand for commodities like oil, Capital Economics said.

Because of the still elevated numbers of COVID-19 cases in the country, the Philippines is among the countries in Emerging Asia that stands to benefit the most from the distribution of a successful vaccine.

“Hopes that an effective vaccine may be ready to deploy sooner rather than later have pushed some Asian equity markets up sharply,” Capital Economics said.

“In the Philippines it could lead to an early end to social distancing measures which are holding back the economy,” it said.

The number of confirmed COVID-19 cases in the country has now reached the 400,000 mark.

In response to progress in vaccine development, the government has put together a so-called vaccine cluster  headed by Secretary Carlito Galvez that will be in charge of the purchase, negotiation, production and distribution of vaccines.

Galvez had said that under a best-case scenario, vaccines can be distributed in the Philippines from May to July next year.

The economy contracted at a less severe pace in the third quarter coming off a record nosedive in the second quarter following the easing of mobility restrictions and reopening of more businesses.

Economic output as measured by the gross domestic product (GDP) shrank by 11.5 percent year-on-year in the third quarter, still a reversal of the 6.3 percent growth in the same period last year but a moderation compared with the downward revised 16.9 percent contraction in the second quarter.

The performance in the third quarter fell below expectations of a much slower contraction, causing the government to recast its macroeconomic assumptions and fiscal program.