Finance Secretary Carlos Dominguez III has reiterated that on top of the existing funds under the 2021 national budget and the Bayanihan To Recover As One Act (Bayanihan 2), the government has secured loan agreements with the three multilateral institutions worth a combined US$1.2 billion (about P58.4 billion) to ensure sufficient resources to procure COVID-19 vaccines for 70 million Filipinos or 100 percent of the country’s adult population.
Dominguez informed President Duterte that even when these funds have been secured by the government for its mass vaccination plan, the money can only be drawn when the concerned pharmaceutical companies are ready to deliver their vaccines to the Philippines.
Under the 2021 General Appropriations Act (GAA), Dominguez said the Department of Health (DOH) will get P2.5 billion for vaccine procurement, on top of the P10 billion allocated for COVID-19 vaccine financing under Republic Act (RA) No. 11494 or the Bayanihan to Recover as One Act, whose validity has been extended up to June 30, 2021 through RA 11520.
Unprogrammed funds of P70 billion under the 2021 GAA complete the budget for vaccine procurement of P82.5 billion. Of this P70 billion, P58.4 billion will come from loans recently approved by the Asian Development Bank (ADB), World Bank (WB) and the Asian Infrastructure Investment Bank (AIIB).
The balance of P11.6 billion will be sourced from savings and other arrangements with the Philippines’ bilateral or multilateral partners through official development assistance (ODA) financing.
This brings the total financing for the COVID-19 vaccination program (vaccine doses, logistics and other supplies, including waste disposal facilities) to P82.5 billion, Dominguez said.
“That money—P82.5 billion plus the private sector and another P10 billion from the LGUs (local government units) will be enough for us to vaccinate all the adults in the Philippines this year,” Dominguez said during a televised meeting Monday night with President Duterte and select Cabinet officials.
About 70 million adult Filipinos need to be vaccinated against COVID-19. The remaining 40 million aged 18 years and below cannot be vaccinated yet, according to the DOH.
Dominguez explained the details of the financing for the COVID-19 vaccination program in response to the President’s query regarding claims in some reports that the government has “trillions of pesos” on hand to purchase vaccine doses but have yet to buy the vaccines from the drug manufacturers.
The Finance Secretary made it clear that the funds covered by loans from multilateral institutions are not in the hands of the government. The loan accords with the ADB and the World Bank have already been signed this month, while the agreement with AIIB has yet to be scheduled for signing.
Moreover, under the terms of the loan agreement, the multilateral institutions, such as the ADB, would directly pay the suppliers of the vaccines and such purchases would have to pass the ADB’s stringent criteria.
Hence, these funds for our vaccine purchases will not be coursed through the Philippine government, he said.
The President said during the meeting that this arrangement with ADB, WB and AIIB dispels insinuations or allegations of corruption in the government’s vaccine procurement process.
“Ang buong akala kasi nila ‘yong pera na bilyon na bilyon na ibinigay nila… ‘yong Kongreso, nandiyan na sa kamay natin, that it’s cold cash, at ang anuhin, nasaan na ‘yong pera? Sinasabi na natin time and again that the money is with the lending banks,” the President said. “So we have not used any single centavo of it.”
During the meeting, Secretary Carlito Galvez Jr., who is the National Task Force Against COVID-19 (NTF) and vaccine czar, thanked Secretary Dominguez and Finance Undersecretary Mark Dennis Joven for ensuring that the government has enough funds to be able to fulfill its commitments to vaccine manufacturers.
He said Joven and other officials from the Department of Finance (DOF) have been diligently negotiating for the loan approvals to help speed up the arrival of the Philippines’ vaccine supply.
Earlier, Dominguez said that to date, the government has secured the following loans totalling US$1.2 billion (around P58.4 billion) for COVID-19 vaccine procurement:
1. US$500 million for the Philippines’ COVID-19 Emergency Response Project—Additional Financing (PCERP-AF) from the WB
2. US$400 million Second Health System Enhancement to Address and Limit COVID-19 (HEAL 2) under the Asia Pacific Vaccine Facility of the ADB
3. US$300 million HEAL 2 loan from the AIIB
“These loans are being processed for signing this March 2021 with an indicative aggregate loan amount of US$1.2 billion,” Dominguez said in a letter to Senator Panfilo Lacson.
Copies of the letter were also sent to Senate President Vicente Sotto III, Senate President Pro-Tempore Ralph Recto, Majority Leader Juan Miguel Zubiri, Minority Leader Franklin Drilon and the other senators.
Dominguez made the clarification following reports that have circulated saying that the government’s accumulated loans, along with the DOH appropriations under the Bayanihan 2 law to procure COVID-19 vaccines, allegedly now amount to “P126.75 billion.”
The report listed several supposed “WB/ADB/AIIB approved loans for Ph Covid vaccines” that the government secured between April 2020 and March 2021.
According to the DOF, US$1.7 billion of the total of US$2.4 billion loans listed in the circulated report were not for vaccine procurement, but were intended for the purchase of COVID-19 medical and laboratory equipment, reagents, personal protective equipment (PPEs), ambulances and other essentials for medical frontliners, while the other loan packages mentioned were for general budgetary support to cover state spending on pandemic response measures.
Only US$700 million of the loans listed in the report were for vaccine procurement.
During the President’s latest televised briefing, Galvez reported that 140.5 million doses from 5 vaccine manufacturers are expected to arrive in the country on a staggered basis between April and December 2021.