P641-B loans tapped vs COVID-19 scourge

Every life saved from the rampaging coronavirus counts. The government is beefing up its war chest against the COVID-19 scourge by securing more loans, amassing in the process a total indebtedness of P641 billion payable until 2049.

The P641-billion debt breaks down to P9,157 for each of the 70 million Filipinos (some 70 percent of the population) to be inoculated to achieve herd immunity. We presume the amount covers the cost of the vaccines, handling expenses and the usual, huh, system losses.

Government data show that more than 76 percent of the P82.5 billion allocated to the mass vaccination in two to five years will come from P62.5 billion in new loans and some P2.54 billion to be realigned from loans secured earlier for the pandemic response.

Finance Secretary Carlos Dominguez had said that the expense for the storage and distribution nationwide may amount to as much as the cost of the vaccines, one of which (Pfizer) requires extremely low cold storage of minus-70 degrees Celsius.

Reporting on the loans being consolidated to combat the COVID-19 scourge, the ABS-CBN Investigative and Research Group said Thursday that “the economic impact of the pandemic is likely to stay with Filipinos for the next 28 years as the Philippine debt reaches P641 billion.”

The group’s report said the government has amassed a total of $13.34 billion or around P641 billion in loans for its COVID-19 response, as shown in DOF data posted on its website as of Dec. 15, 2020. It noted that the amount of loans nearly doubled since July 1, 2020.

The government is borrowing for vaccine procurement P62.5 billion from multilateral financing institutions including the Asian Development Bank, the China-led Asian Infrastructure Investment Bank and the World Bank.

The ABS-CBN report said new loans contracted from July 14 to Dec. 10, 2020, totaling P138.3 billion will come from multilateral and bilateral financing institutions, while P132.15 billion will be raised through the issuance of bonds.

The sources of the loans (denominated in US dollars and converted here at $1 = P48.053) listed by ABS-CBN are:

*Asian Development Bank: P63.67 billion for the Competitive and Inclusive Agriculture Development Program, the Disaster Resilience Improvement Program, the Health System Enhancement to Address and Limit COVID-19 Program and the Inclusive Finance Development Program, Subprogram 2.

*World Bank: P46.61 billion for the Philippines Beneficiary FIRST Social Protection Project and the Support to Parcelization of Lands for Individual Titling Project.

*Japan International Cooperation Agency: P22.05 billion for the Post Disaster Standby Loan (Phase 2).

*KEXIM-EDCF: P4.81 billion for the Program Loan for COVID-19 Emergency Response Program.

*Issuance of bonds: P132.15 billion.

The finance department said the P641-billion loans will be paid from 2023 to 2049, with an average repayment period of 15 years for each loan, based on the agreed amortization schedules.

As indicated in the loan documents secured by ABS-CBN from the DOF website as of Dec. 15, of the P611.41 billion borrowed for budgetary support financing, 85 percent or around P517.53 billion has been disbursed to the government as of Dec. 15, 2020.

Some P1.27 billion in grants came from the Japanese government and the Asian Development Bank.

Aside from vaccines directly ordered from the developers, more doses are expected from the COVAX facility and through arrangements with private entities, local governments, from donors like China that had promised 500,000 doses and via grants from such sources as Japan.

COVAX is headed by Gavi, a Geneva-based funder of vaccines for low-income countries, along with Coalition for Epidemic Preparedness Innovations and the World Health Organization. It aims to secure two billion doses, one billion for 92 low- and middle-income countries and economies, which account for half of the world’s population.

Vaccine czar Carlito Galvez Jr., head of the task force implementing the mass vaccination, said the government plans to secure 148 million doses. Seven developers are seeking approval by the Food and Drug Administration of their vaccines’ safety and efficacy.

• Kids may go to malls, not to schools?

It’s confusing why kids 10 years of age or older may not go to school for face-to-face classes but will be allowed to roam in the neighborhood, malls and other public places under the relaxed rules to take effect on Feb. 1.

The Inter-Agency Task Force for the Management of Emerging Infectious Diseases has relaxed mobility restrictions for people aged 10 to 65 in areas under modified general community quarantine.

The relaxation was reportedly in response to an appeal of economic managers looking for ways to stimulate economic activity. No similar stimulation plea came from educators or school officials?

The move may have a double negative effect. School kids do not carry much money to spend and leave an impact on businesses. Also, their playing truant, which is what they will be doing in effect, does not contribute to their gaining proper education.

Even before the pandemic, students were discouraged from leaving the school grounds during breaks and sneaking into the malls. The relaxed quarantine rules can now encourage them to do what they could not do freely in pre-pandemic times.

Businessmen better think of new ways to lure consumers with buying power back to the malls, shops, salons and similar commercial establishments without distracting children from their getting an education.

It could be at least one more year before business returns to the old normal, if at all. Business should try creating new models attuned to the new attitudes and habits that the pandemic has started to develop in their old clientele.

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NB: All Postscripts are also archived at <ManilaMail.com>. Author is on Twitter as @FDPascual. Email: [email protected]