Reopening Key to Speedy Vaccine Distribution in PHL
First of all, let me greet you Merry Christmas. May our Lord bless everyone as we celebrate this meaningful occasion, while still observing health protocols, to protect and cherish our family and loved ones.
This year has been a challenging one, but I like to believe the worst is over. Despite the 10-percent contraction in the gross domestic product in the first three quarters of 2020, we see silver linings on the horizon.
Several countries such as the United Kingdom, the United States, Russia and China have started dispensing Covid-19 vaccine shots to their people. While it may still take a few weeks or months before the vaccines become available in the Philippines, we should use the lag time to enhance our logistics sector so that we can properly handle the storage and distribution of the vaccines.
It will also give us an opportunity to assess and learn lessons from the first countries to administer mass vaccination. This does not mean we should wait too long. In fact, the Philippines’ Food and Drug Administration should take the cue from other international regulatory agencies that issued emergency authorization for vaccine use.
We need to encourage the private sector to invest in the vaccine supply chain, including freezer vans and warehouses that are capable of storing delicate vaccines at extremely low temperatures. Let us also make sure that our transport infrastructures are up to the task, including seaports, airports and highways. The cost of shipping, airfreight and trucking should be reduced to avoid passing on additional charges to vaccine prices.
The safe opening of the economy will be crucial to the fast and efficient distribution of vaccines to our people. The reopening will lead to an overall improvement in our logistics and distribution sector, which will play a key role in our economic rebound.
International Finance Corp., the private sector arm of the World Bank, estimates that logistics account for 6 percent to 25 percent of a country’s gross domestic product. Countries with efficient logistics sectors are able to keep products and services more affordable to their people.
This is why we need to keep the economy open and the supply chain fully functional. The National Economic and Development Authority is right—a calibrated and gradual resumption of businesses with strict implementation of health and safety protocols are critical in reinvigorating the economy.
Neda has cited the need for logistics reforms, such as rationalizing the freight system and establishing strategic warehousing and cold chain networks to bring down costs, improve the trade sector’s competitiveness and help the economy recover from the impact of the pandemic.
If we make it easier and more affordable for the people to trade and transport goods, they will do so enthusiastically and contribute to economic recovery.
Help from Abroad
Overseas Filipino workers, meanwhile, are already doing their part in the economic recovery, as they sent $2.75 billion to their families in October alone, up 2.9 percent from $2.67 billion in the same month last year, notwithstanding the situation in the countries they work in. Total cash remittances in the first 10 months amounted to $24.633 billion, or almost unchanged from the same period last year.
Remittances account for about a tenth of our gross national income, formerly known as a gross national product. They support household spending as well as several industries like banking and finance, healthcare, education, real estate, automotive, retail, tourism and travel, hotel and accommodation, and food establishments.
Money sent home by OFWs will likely further increase in December to support the domestic economy. This Christmas, we should remember the sacrifice of our OFWs as they continue to provide a lifeline to our economy amid the challenging period.
Remittances also help stabilize our foreign exchange rate. The peso is among the strongest currencies in the region this year, thanks to the foreign exchange inflows from more than 10 million OFWs and Filipino migrants.
In fact, our gross international reserves hit an all-time high of $104.51 billion as of November 2020, which is more than adequate to cushion the domestic economy against external shocks. According to the Bangko Sentral ng Pilipinas, this buffer is equivalent to 11.2 months’ worth of imports of goods and payments of services and primary income, which is above the international benchmark of just three months. The BSP expects the GIR to further rise to $105 billion by December, equivalent to 11.6 months worth of import cover.
Despite the serious challenges we faced in the past 10 months, there are a lot of things we should be thankful for this Christmas. We have a resilient economy, thanks to our solid fundamentals, political stability, and the contribution of our OFWs. We have a thriving labor market that is ready to unleash its full potential once the pandemic dissipates, hopefully by next year. So, let us remain upbeat and be prepared for the coming year.
Again, let me greet everyone—Merry Christmas!