Finance Secretary Carlos Dominguez III
MANILA – State-owned Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP) will extend a combined PHP20-billion loan to finance the acquisition of coronavirus disease 2019 (Covid-19) vaccines once these become available.
During the Presidential address Friday, Finance Secretary Carlos Dominguez III said the plan is for the government financial institutions (GFIs) to extend loans to the Philippine International Trading Corporation (PITC), an attached agency of the Department of Trade and Industry (DTI), that will purchase the vaccines chosen by the Department of Health (DOH).
He said the vaccines will then be turned over to the DOH which, in turn, will give-out the vaccines for free to patients belonging to the poorest Filipinos.
“So once that happens, the Department of Health now will put in their budget to pay these USD400 million or roughly PHP20 billion. And we can pay that over maybe two or three years. So babayaran lang nila (they will pay it) through the financing company, which is Landbank and DBP,” he said.
Citing reports, Dominguez said three pharmaceutical companies from China, Britain, and the US are now in the final stages of clinical studies on the possible Covid-19 vaccines and the trials are projected to end by October.
Approval of the vaccine by these countries’ food and drug departments are seen by December, he said.
“So when that happens, the Department of Health will choose what vaccines to buy,” he added.
Dominguez said DOH estimates the government needs to give the vaccine for free to a minimum of 20 million Filipinos.
At two doses per treatment, he said the government needs to acquire about 40 million vaccines, which is estimated to cost about USD10 per dosage.
“Once the vaccine is available, I’m sure the economy now can be fully opened and we can start, not the new normal, (but) the normal life,” he said.
In a Viber message to journalists, Dominguez said both the Landbank and DBP are financially capable of extending loans to PITC without the need for the national government to infuse additional capital.
“Please recall that since 2016, by hardly collecting any dividends from Landbank and DBP, the national government, in effect, strengthened their capital bases. This, in turn, was made possible by the tax and administration reforms that increased government revenues,” he said.
Dominguez said the increased revenues as a result of tax reforms and more stringent tax collection not only benefited the government’s priority Build, Build, Build (BBB) program but also the GFIs’ “capacity for supporting the country in times of emergency.”
He said the GFIs may also extend loans to “qualified borrowers who wish to supply (Food and Drug Administration) FDA-approved vaccines on a commercial basis,” he said.
Landbank president and chief executive officer Cecilia Borromeo said the bank “may extend a credit facility for PITC for the purchase of necessary vaccines on behalf of the DOH.”
She said this facility is the same as what the bank did when the government launched its generic medicine program a few years back.
“The amount for the trade transaction credit facility will be based on the requirement of PITC; and the sharing between LBP and DBP will logically be based on the size of the balance sheets of the GFIs and the preference of the DOF,” she added.
Meanwhile, Dominguez said economic recovery has begun after hitting its lowest last April and May.
“It’s already picking up now and we are going to be seeing a pick-up in business activity as we go on,” he said.
Dominguez said there are few issues such as the availability of enough transportation and the need for people to spend again.
He said the economic recovery is supported by the ample domestic liquidity, low inflation, and strong peso.
“People have faith in us. We are able also to finance it (economic recovery) by borrowing locally and internationally. We are in good shape to overcome this crisis,” he added. (PNA)
