Vaccines plus economic amendments equals recovery

There is absolutely no doubt that the only way to achieve some form of normalcy and navigate a path to economic recovery is through a successful vaccination rollout to reach herd immunity. The United States has set the example in heading towards the right direction, with their recovery efforts gaining traction as seen in the report from the US Department of Commerce showing that economic growth accelerated at 6.4 percent on an annual basis during the first quarter. Unemployment benefit claims have also dropped below 500,000 for three consecutive weeks, according to the US Department of Labor.

Undoubtedly, world leaders are watching President Joe Biden and not surprisingly, with a touch of admiration for what he has been able to achieve in just over four months after he took office. He summed it up clearly in his remarks in Cleveland last Thursday:

“COVID cases are down, COVID deaths are down, unemployment filings are down, hunger is down, vaccinations are up, jobs are up, growth is up, people gaining health coverage is up, small business confidence is up. Put it simply: America is coming back. America is on the move.”

And this has nothing to do with luck, he said – it’s primarily because his administration made the vaccine program a priority. “You’ve got to fix the pandemic before you can fix the economy,” emphasized President Biden, whose $1.9-trillion COVID-19 Stimulus Package signed into law last March is aimed at speeding up US recovery from the economic and health impacts of the pandemic and the recession. In addition, the US president is also proposing a $6-trillion budget to bump up federal spending to its highest levels since World War II to make America even more competitive, with investments in infrastructure, education and health care to be boosted.

It doesn’t take a rocket scientist to see that the vaccines – and the efficient vaccination rollout – have helped turn things around for a country that was badly hit by the pandemic, with record high cases of infection and the death toll reaching 600,000.

As IMF chief economist Gita Gopinath put it, the “main weapon” that the world has to fight COVID-19 and achieve economic recovery at a faster pace is the vaccines. A big concern, Gopinath said, are the virus mutations that will continue to happen for as long as many parts of the world remain unvaccinated. Which is why “the international community must act swiftly to ensure rapid and broad global access to vaccinations” particularly in poorer nations, she wrote in a blog for the IMF.

Not surprisingly, America is at the forefront of the fight against the pandemic, having committed $4 billion for the COVAX Facility along with a pledge to donate 80 million doses of COVID-19 vaccines for countries that badly need them. We were informed by the White House that the Philippines will be among the countries that will receive from the first batch of deliveries.

For the Philippines, the anticipated arrival of the vaccines is already starting to fuel economic activity. “Normalcy” is now on the horizon with the vaccine rollout – which is why the public should really not hesitate to get vaccinated regardless of the brand or manufacturer. Whether from China, the US or Europe – world experts and scientists have confirmed that all vaccines are designed to protect people from COVID-19 and help with the goal of global herd immunity.

The sooner people get vaccinated, the better so our country will be able to recover from the economic impact of the pandemic. Encouraging developments are on the horizon, like S&P Global affirming the “BBB+” long term rating on the Philippines with a stable outlook, and the A-2 short-term credit rating – noting that the economy is showing signs of recovery and expected to rebound as the government continues its vaccine rollout and the pandemic gets under control.

Our House of Representatives’ passage on second reading of a measure seeking to amend constitutional restrictions on foreign ownership of public utilities, educational institutions, media and advertising are encouraging to potential investors. We have been pushing for investments to the Philippines in all our economic forums and saw a lot of interest, but restrictive economic provisions on key industries are disincentives to attracting foreign investment.

Clearly, these economic amendments are long overdue. We have an opportunity to tap into US companies that are looking to relocate or expand operations to places other than China, especially with the passage of the CREATE (Corporate Recovery and Tax Incentives for Enterprises) bill that offers tax incentives, especially to businesses outside Metro Manila.

I had lunch with the American Chamber of Commerce and later I had dinner with White House, State Department and Pentagon officials to discuss mutual areas of concern such as the pandemic and economic cooperation. Those meetings gave me the assurance our relationship is in good shape.

No question we will definitely overcome the economic challenges we face, most especially following the formula: Vaccines plus economic amendments equals recovery.

Clarification

Last week we had a virtual forum arranged by the Philippine embassy with the US Trade and Development Agency and the US International Development Finance Corp., which generated a lot of interest among pharmaceutical companies looking at vaccine manufacturing and distribution in the Philippines. I mistakenly wrote in my last column that the DFC is planning to put up an office in the Philippines, but it’s actually the USTDA that will set up an office at the US embassy in Manila. Thanks to DFC Indo-Pacific Director Erin Murphy for calling our attention and correcting it.

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