Finance Secretary Carlos Dominguez III said last week the Philippines is assured of at least 149.83 million doses of vaccine deliveries this year, sourced through supply agreements that are backed by foreign loans and the government’s regular budget, along with donations from other countries and the COVID-19 Vaccines Global Access (COVAX) Facility.
Dominguez assured senators that the government has enough funds to fully scale up its COVID-19 vaccination program to the end of this year, but additional financing of about P25 billion to cover the inoculation of children aged 12 years old and above, and possibly a separate amount for booster shots for all previously vaccinated need to be included in the proposed 2022 national budget.
He estimates the amount for the booster shots–both for adults and children–to cost roughly P60 billion.
The Finance Secretary earlier gave the assurance of sufficient funding for the vaccines to President Duterte and the public during the Chief Executive’s latest televised public address and meeting with select Cabinet officials aired on June 14.
“Tamang-tama, sapat po ‘yong ano, ‘yong pera natin para sa vaccination. So we don’t have to worry. The money is there and we will certainly be able to vaccinate the entire adult population plus the teenagers who are I think around 15 million, right? Around 15 million Filipinos. So total 85 million Filipinos,” Dominguez said during the televised meeting.
While the government is already assured of 149.83 million vaccine doses, Dominguez told senators that local government units (LGUs) and the private sector could increase this volume as they are allowed under the COVID-19 Vaccination Program Law to purchase up to 24.9 million doses combined.
Along with the vaccine supplies still under negotiation, vaccine deliveries could reach more than 204 million doses this year, which are more than enough, he said, to inoculate 70 million Filipinos or 100 percent of the country’s adult population.
“There is a second horizon we have to look at, however. We might need an allocation of about 25 billion pesos to cover the inoculation of children aged 12 years old and above. Pending confirmation of our health authorities, we are preparing for the purchase of booster shots of one dose for roughly 85 million adults and teenagers. This could cost roughly 60 billion pesos. The proposal is to include such supplemental amounts in the 2022 budget,” he said during the June 15 Senate committee of the whole hearing on the government’s mass vaccination program.
The Department of Health (DOH) has said at least 15 million children aged 12 years old and above could be covered by the COVID-19 vaccination program.
Dominguez told senators that the government has secured vaccine doses through the following:
· Official Development Assistance (ODA) financing from the Asian Development Bank (ADB), World Bank (WB) and the Asian Infrastructure Investment Bank (AIIB), which will deliver 89.5 million doses. This volume is sufficient to inoculate at least 44.75 million Filipinos.
Through these foreign loans, the government has so far contracted a total of 33.5 million doses worth US$639.8 million that could inoculate close to 17 million Filipinos.
He said this amount comprises 53 percent of the total available funding under the government’s vaccine loans.
“Additionally, we have reserved a total of 56 million doses through binding term sheets, which will be finalized through the execution of Supply Agreements with the vaccine manufacturers,” Dominguez said.
In line with the terms of these signed supply agreements with vaccine manufacturers, the government has already paid the amount of US$243.25 million to them, he said;
· The COVAX Facility, which, based on current estimates, will bring in some 44 million doses of donated jabs to the Philippines;
· The regular budget, which allowed the government to secure 15.5 million doses worth US$176.5 million; and
· The Chinese government’s donation of one million doses of its Sinovac vaccines.
“In sum, the government is assured of at least 149.83 million doses of vaccines through binding term sheets and supply agreements backed by our foreign loans, our regular budget, and donations from other countries and the COVAX facility,” Dominguez said at the Senate hearing.
To date, a total of 12.7 million vaccine doses have already been delivered to the Philippines, Dominguez said.
The decision taken during the recent G-7 summit for wealthy nations to donate one billion doses to COVAX could significantly increase the Philippines’ allocation under this facility, Dominguez said.
He also noted that Japan Foreign Minister Toshimitsu Motegi has announced the donation of Japan-made AstraZeneca vaccines to some countries, including the Philippines.
To ensure a more stable vaccine supply, Dominguez said the government is negotiating with manufacturers a portfolio of six vaccine varieties, namely, those produced by Pfizer, Novavax, Moderna, Sinovac, Johnson & Johnson and Sputnik-V.
The total fund for vaccine procurement has now reached P88.6 billion, Dominguez said.
Of the P88.6-billion funding, P2.5 billion forms part of the DOH budget under the 2021 General Appropriations Act (GAA), while P10 billion make up funds under Republic Act (RA) No. 11494 or the Bayanihan to Recover as One Act (Bayanihan 2), which allocated this amount for the COVID-19 immunization program.
The amount of P3.26 billion has also been allocated for the COVID-19 vaccination program.
Dominguez said the Office of the President has also made available P2.8 billion of its Contingency Fund for the vaccination program.
About P57.3 billion of the vaccine procurement funds were sourced through concessional loans from ADB, World Bank and AIIB, while the remaining amount of P12.7 billion will come from other financing sources.
Dominguez pointed out that the bulk of the fund sources comes from loans extended by multilateral institutions.
He told senators that this financing strategy was deliberate to ensure that: (1) the purchased doses are internationally accepted, and have passed the stringent criteria for safety and effectiveness; and (2) the vaccine procurement is totally transparent.
“The loans follow a direct payment scheme as a disbursement method. This means that the loan proceeds will be directly coursed from the lender to the vaccine manufacturers upon delivery,” Dominguez said.
Dominguez assured senators that the government will maintain its policy of prudent fiscal management to ensure a deep war chest for the long battle against the pandemic.
“Living and dealing with COVID-19 is a multi-mile marathon, not a 100-yard sprint. We need to continue exercising prudence in managing our financial affairs. We need to protect our fiscal sustainability and ensure that we have an ample war chest for this long battle,” he said.
Dominguez said the temporary surge in borrowings resulting from the additional spending for the COVID-19 vaccine procurement and other pandemic response measures has expectedly widened the budget gap, which is seen to reach P1.86 trillion, or about 36 percent higher than last year or 9.3 percent of the gross domestic product (GDP).
The larger budget deficit will require P3.1 trillion in borrowings in 2021, roughly the same level as last year.
“The pandemic we have been battling since March of last year has been a contingency we could not have imagined, let alone provisioned for.” Dominguez told senators.
Dominguez said the total debt as a share of GDP is expected to rise to 58.7 percent in 2021, higher than the 54.6-percent figure for 2020 and the historic low of 39.6 percent in 2019.
“Despite the increase, our prudent debt management gave us the fiscal headroom to deal with the pandemic. Thus, the anticipated temporary rise in debt remains within the prescribed bounds of fiscal viability,” he said.
Dominguez said that despite the temporary increase in borrowings, the country’s debt level remains manageable and its credit ratings remain exceptionally high.
“This is due to the fiscal prudence and the tax and structural reforms which we together implemented since 2016. Our high credit ratings enabled us to access emergency financing at lower rates, tight spreads, and longer repayment periods,” he noted.
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