Still no hope in sight

The arrival of COVID-19 vaccines into the country was supposed to be the one of the necessary steps needed to put the economy back on track.

Unfortunately, the limited vaccine availability, coupled with the recent resurgence of infections, was totally unexpected given the huge amounts already spent, as well as the funds being borrowed by the government to procure the vaccines from abroad.

In its latest report, economic research firm Moody’s Analytics noted that the Philippine economy is in a worrisome state given its elevated inflation, large output gap, resurgence of COVID-19 infections, and limited vaccine availability -- all of  which are  reasons for worry.

It pointed out that vaccine availability has been limited, putting the Philippines at continued risk of further outbreaks in the near term. It cited reports indicating that the country has, so far, only received enough vaccines for one percent of the population, with current estimates indicating that the population will not be fully vaccinated until 2023.

The report said that with the government opposed to national lockdowns, the recent spike in local infections means that the economic recovery could easily be further stalled at least through the first half of 2021.

Moody’s found it not surprising, therefore, that the Bangko Sentral ng Pilipinas (BSP) looked past the recent above-target inflation and kept monetary settings accommodative in March, with policy rate remaining at a record low of two percent where it has been since November 2020.

It anticipates that the BSP will keep current monetary settings on hold this year, and that further policy support will come from more targeted fiscal measures as the economy weathers a slower-than-expected recovery this year.

Moody’s forecast for the country’s gross domestic product is a  growth of  6.3 percent in 2021, after the 9.3 percent contraction in 2020, but with significant downside risks at this stage.

The report, likewise, noted that the Philippines’ headline consumer price index (CPI) rose by 4.7 percent year-on-year in February, its highest in two years. This is compared to 4.2 percent in January and remains above the BSP’s two to four percent target. The increase, it said, was driven by food shortages, with the African swine flu a significant contributor that  reportedly wiped out over one-third of the country’s pig stocks.

Another concern for the central bank, it stressed, is whether inflation expectations start to pick up and lead to second-round inflation gains.

Demand-pull inflation, it added, is weak and will remain that way into the June quarter as Metro Manila and four other neighboring provinces have reinstated quarantine measures due to COVID-19 outbreaks.

How is the Philippines faring compared to its neighbors in the region with respect to the roll-out of the COVID-19 vaccine?

According to an ASEAN report, Brunei has sourced enough supplies to cover 50 percent of its population. As of March 21, it had one new case, bringing the total to 206 with three deaths. Cambodia is expected to import vaccines from both China and Russia, and saw 55 new cases on March 25, bringing the total number to 1,872 amid five deaths. Indonesia has administered over nine million doses for its frontline workers beginning last month, but is facing difficulties with its large population of 268 million and price sensitivity given Sinovac’s estimated cost of $20 per dose. In addition, the vaccine is required to pass halal certification prior to use and the government is uncertain how it can source enough vaccines to reach a sizeable part of its population. Last March 25, Indonesia recorded 6,107 new cases, taking its total to 1.48 million cases and 40,081 deaths.

Laos has been using on trial the Russian Sputnik V vaccine and reported one new case on March 17, bringing the total to 49. Malaysia will provide free vaccines to its nationals and has signed a deal with Pfizer for 12.8 million doses. It aims to inoculate 80 to 100 percent of its citizens. Malaysia saw 1,360 new cases on March 25, taking the total to 338,168 cases and 1,248 deaths.

Meanwhile, Myanmar which is struggling with finances and logistics and is under US sanctions, aims to treat 20 percent of its population that are the most at risk. It reported 23 new cases on March 25,  bringing the total to 142,315 amid 3,204 deaths.

The report said the Philippines aims to commence vaccinations from June and expects to inoculate about 25 million people or 25 percent of the population over the course of the year. It reported 8,773 new cases and 56 deaths on March 25, bringing the total to 693,048 cases and 13,095 deaths. Singapore has been working on producing its own “Lunar” vaccine and reported 17 new cases on March 25, bringing the total to 60,253 amid 30 deaths.

Thailand is expecting vaccines to be delivered in mid-2021, enough to cover 13 million of its 69 million population. The country reported 97 new cases on March 25 for a total of 28,443 amid 92 deaths. Lastly, Vietnam is also working on producing its own vaccine, with Phase 1 trials already underway.  Vietnam claims it is capable of producing 30 million doses a year, expecting that a national vaccine could be distributed to the general population by October. In the meantime it has signed an agreement with a Taiwan-based vaccine company to secure three to 10 million vaccine doses this year.

Outside of the ASEAN region, other countries producing their own vaccines against COVID-19 are Iran, jointly with Russia. Kazakhstan expects to roll out its own vaccine by the second quarter. Taiwan says it will be able to manufacture enough of its own product for half of its population and Yemen claims it too will develop its own vaccine.

Everyone wants the vaccines, whether it be sourced from a foreign supplier or produced locally. Our government obviously does not have the finances to inoculate the entire population, even the 18 to 65 age bracket, nor the means to efficiently roll out the vaccination program throughout the country. It needs to recognize that it needs help, especially from the private sector which is more than willing to help.

Yes, the vaccines are still unregistered with the Food and Drug Administration and therefore need to be brought in through the government under emergency use authorization (EUA). But shouldn’t protocols and other requirements be relaxed just a little bit so that we could bring in faster more vaccines? When there is a declared emergency, the EUA allows the FDA to release something for use even without all the evidence that would fully establish its effectiveness and safety so long as there is evidence that strongly suggests that patients have benefited from a treatment or test.

The private sector is willing to fund its own immunization program and even pay for the logistics cost just to ensure that the administration of vaccines will be done at lightning speed and to help the economy recover faster. It says it will take care of vaccinating its own employees so that the local governments can focus on their constituents while the national government can take care of the rest not covered.

The government should acknowledge the fact that there is a big problem. Let the private sector do what it does better.

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