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Rollout

FIRST PERSON - Alex Magno (The Philippine Star) - February 11, 2021 - 12:00am

The good news is that we are getting our first vaccine delivery in a matter of days. The bad news is that we are getting only a few.

We are not about to carpet the archipelago with inoculations. What we are about to see is akin to a soft opening rather than a rollout extravaganza. Anticipate not a flood but a trickle.

In the real world, the queue is long and supply is short. Both the US and the EU recently substantially increased their orders for the vaccine and expect the manufacturers to deliver to them first. The new Biden administration targets 100 million vaccinations in its first 100 days. It will likely do better than that.

We have the funding to procure the vaccines. But we do not have the clout to jump the queue. And so we wait in line.

While we wait, new and cheaper vaccines are completing their trials. We could get better deals down the road, especially as pressure on vaccine supply eases. More important, a few months hence, we would have better information about which vaccines work better against the new variants – especially the so-called South African variant that appears to be resistant to some vaccines.

Over the next several months, expect our vaccine deliveries to be both meager and intermittent. The richer countries are placing orders in the tens of millions of doses. In a seller’s market, we will get less attention. Few manufacturers have approached us with applications for emergency use authorization for their products. To date, only two have been given clearance for use.

Nevertheless, our health authorities have made a brave show of conducting dry runs for disseminating the vaccines when they do arrive. Last Tuesday, a mock delivery was conduced from the airport to our ultra cold storage facilities. Mock inoculations were conducted in several hospitals designated to receive the first doses.

So far so good – except that we do not have the vaccines yet. But the exercise does assure our people that when vaccines begin trickling in, our health workers will know exactly what to do – down to the time-and-motion studies of actual inoculations.

While we grapple with the vaccine supply situation, our people need to observe the mitigation measures with the same vigilance. Vaccination is only one tool in the public health tool kit necessary to fight this pandemic. All the tools need to be in play until we drastically bring down infection levels.

To this day, we do not have definitive information about how long immunity lasts for those previously infected. We have exactly zero information about how long vaccines will be effective in keeping infections at bay. It is entirely possible that we might need to conduct vaccination programs every year until the virus is declared extinct. That may be a long way ahead.

Maintaining the mitigation measures in place and purchasing vaccines on a continuing basis will involve great costs. Those costs will diminish the funds available to attend to the needs of economic development over the longer term.

The final costs of this pandemic, including missed opportunities, are yet incalculable.

Stagflation

On top of it all, Brent crude is now priced at $61 per barrel. That is higher than the prevailing price before the pandemic hit us.

With the oil cartel keeping a tight lid on global supply, there is no indication prices will slide down to a more benevolent level. Meanwhile, stimulus packages put out by the rich countries will likely stoke demand for the commodity.

What this means for us is the onset of a vicious cycle. When oil prices rise, there is pressure for transport fares to go up. There will be repercussions on food prices eventually.

Food prices, we know, is at the heart of our current grief. Expensive fuel will aggravate the inflationary surge spearheaded by food costs. There will be no respite for consumers in the months ahead.

Pork is the issue of the week. After a price cap was imposed on pork, supply of the commodity evaporated in the wet markets. They are available in supermarkets at prices way beyond the cap.

We learn from the hog raising industry that about 5.5 million hogs were culled over the past year or so as we battled ASF infestation. How could it happen that so many hogs were culled without anyone planning for the shortages that were inevitable?

At midweek, the hog industry and the agriculture officials were still haggling over whether tariffs on the commodity will be cut as we surge imports to cure the supply problem. We are running way behind the curve. By the time importers determine the viability of importation, local supply will have dried up.

It seems inevitable that we are into another episode of elevated inflation rates. Apart from supply issues and rising cost of oil, it is apparent that suppressed consumer demand has now come into play.

While the lockdown was severe and the end of the pandemic seemingly distant, consumers held on to their cash, minimizing consumption. Now, with vaccines coming and the situation apparently under control, consumers are unleashing their cash on the market.

Some analysts are fretting over the possibility our economy enters into the tunnel of stagflation, a situation where prices are rising and production is stagnant. One policy measure that may be considered is to shift stimulus flows from the demand to the supply side.

But the politicians crafting the next stimulus package might not be easy to convince.

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