Conditions are Getting Better
The Philippines is not out of the woods yet, but I strongly believe things are looking up. For one, the worst is over for the Philippine economy. It has bottomed out after contracting 9.5 percent for the whole of 2020, and I can sense it will surely bounce back starting this year.
The base effect naturally will induce growth starting in the second quarter of 2020 when the economy contracted 16.9 percent. It may be a distortion in the economic growth coming from a low base, but succeeding figures nonetheless will confirm that the Philippines is on the way up. The economic recovery is critical in shoring up consumer and business confidence amid the pandemic.
The rate of recovery, of course, will heavily hinge on the success of the vaccine rollout and the speed by which the Philippines can achieve herd immunity. The positive news last week on the arrival and availability of vaccines in the Philippines gives us another reason to be upbeat.
The World Health Organization (WHO) assured the Philippines it will receive 44 million doses of Covid-19 vaccines this year through the Covax Facility, with up to 9.2 million doses arriving in the first half.
This WHO initiative is a boon to the Philippines and other nations that are worrying about access to Covid vaccines. Rich countries like the US, China, and those in Europe are practically assured of getting the vaccine because of their huge financial resources. With the Covax Facility, however, poorer nations like the Philippines can have equal access to the vaccine.
Dr. Rabindra Abeyasinghe, the WHO representative to the Philippines, says vaccine deliveries will start once the government fulfills the necessary arrangements required by the Covax Facility and the other requirements of drug makers, such as Pfizer-BioNTech and AstraZeneca. The Covax Facility of the international health body aims to guarantee fair and equitable access to vaccines for every country in the world to minimize the impact of the pandemic, save lives and help in the speedy economic recovery.
The help from WHO is very assuring. The Covax program, led by WHO and the Gavi vaccine alliance, published its initial distribution list for 337.2 million doses, with the Philippines included in the top 10 recipients of Covid-19 vaccines. The Covax program is looking potentially to deliver a maximum of 9.2 million doses to the Philippines coming through the Covax facility by March or April of this year and the balance of the 44 million doses later this year.
I have confidence the Philippines will keep its side of the bargain in receiving the badly-needed doses. The national government, local government units, and the private sector have taken efforts to prepare the cold-chain facilities and manpower needed to roll out the vaccines under the National Deployment and Vaccination Plan. The Pfizer-BioNTech doses, for one, require special ultra-cold storage.
The conditions in the Philippines, indeed, are improving and we are getting timely help to overcome the pandemic. The Asian Development Bank is earmarking $25 million (around P1.2 billion) to help the government purchase vaccines this year. The ADB assistance will enable the Philippine government to pay vaccine makers in advance to secure the delivery of the doses to the population.
Things are also looking up on the economic front. The Philippine Manufacturing Purchasing Managers’ Index rose from 49.2 points in December to 52.5 points in January this year. This data is an indicator of the country’s economic health for the manufacturing sector.
The Philippines’s external accounts, meanwhile, remain solid—an assurance that we are very far from a foreign exchange crisis despite the economic recession. The Philippines registered a record balance of payments surplus of $16 billion and gross international reserves of $110.12 billion in 2020 amid the challenging global environment precipitated by Covid-19.
The peso is steady, hovering around 48 against the US dollar, while the Philippine stock market remains vibrant. Still, the economic conditions are far from ideal but the Philippines, I believe, will finally get over the hump. We just have to be patient and stay positive.