Our Economy and Recovery

Last Friday, I had an interview with Danie Laurel on One News. We talked about the updates on the vaccine, the logistics, and my projected bounce back of the economy by the fourth quarter should the inoculations go well. Here are some highlights of that interview:

Danie: The vaccine saga is still what investors and the general public are holding their breaths for, and to give us an update on how the private sector has been pitching in, we have Joey Concepcion, presidential adviser for entrepreneurship. Sir Joey, quick update on how many doses you have secured, which ones and for when? Plus what ongoing talks you have right now?

Joey: Last year we secured 2.6 million doses with AstraZeneca vaccines, and this year we secured the balance of about 15 million dose, so the total of AstraZeneca vaccines that will be arriving is about 17 million doses. May and June would be the arrival for the 35 companies that ordered first, that’s about 2.6 million doses, and the remaining doses from the second batch will arrive on the third quarter—that for the 340 companies and the 39 LGUs—a total of 17 million doses. That’s definite and there’s no delay according to AstraZeneca.

We also helped Ricky Razon of ICTSI consolidate smaller orders for Moderna. I think Moderna is bringing eight million doses, which should also be expected in the 3rd quarter. Recently, we just launched the partnership with Faberco and Unilab, they will be bringing in the Novavax vaccines. There are the only one right now with a supply line for the private sector and the response is quite good from our small and medium enterprises.

Danie: Sir, on the vaccine issue, what about the cold storage logistics? Is the private sector in any way contributing to the government effort in terms of logistics? How are you coordinating all of these?

Joey: Moderna is an end to end, I believe they are going with Zuellig to handle the logistics. In the case of Novavax, I believe it is going to be Unilab and maybe, I was told that they will also be approaching Zuellig. In the case of AstraZeneca, since we just purchased the vaccines, we basically are in discussion right now if the private sector is willing to cover the cost of the logistics. We are now in discussions with Zuellig, among others, to secure this.

Danie: Sir, let’s take a step back and talk about the state of MSMEs. You’re doing quite a lot of programs, especially when it comes to testing during the beginning stages of the lockdown. What are you now doing to help them and do you think the stimulus has been enough to allow them to survive through last year?

Joey: As you know the economic team is pushing for, and not relaxing even in the GCQ, and I think that’s the right approach. But of course, the President said let’s wait for the vaccines, which is also a good move.

Talking to one of the biggest financing companies in the country, it seems that many micro and small enterprises are affected because they told me that loans below P500,000 are not being paid, while bigger amounts are being paid. You can see the effect of our economic problem and how it is affecting the smaller entrepreneurs. Their lifelines in the banks are not as big as the medium and large companies, and I believe that as the vaccines arrive, we should open up the economy more. That’s why our goal is to pursue all avenues from testing to vaccination.

Another challenge is that while we are buying the vaccines, we have to bring up the level of confidence with our employees and our citizens—that it is safe to take these vaccines. On how I look at this, it is like we are in war and we are recruited to fight. We are not bringing a gun, but the only thing the country is asking us is to vaccinate ourselves to protect ourselves and the people that surround us. If we don’t do that, even though we have millions of vaccines, if the compliance is only 50 percent, we are not going to win the war against the virus.

Danie: Finally, sir, before we let you go, with vaccines now coming in just a few months for the one that you’ll be using with the private sector, and now with Sinovac already arriving this week, plus the pending reopening of the economy, is that enough for the MSMEs and the most vulnerable to get through this without additional stimulus?

Joey: I believe that in the last quarter of this year, with vaccines to start coming in from May onwards, especially in the third quarter, that will bring in a lot of confidence. Remember 2022 is an election year, that is the biggest stimulus when people start to spend behind election. The last quarter of 2021, which is Christmas, I believe it is going to be the chance for many of our MSMEs to get back on their feet, not maybe that dramatic, but at least cash positive. That should be the time that the economy must really be opened up.

That’s why we are putting a lot of pressure on the arrival of the vaccines and the implementation has to be excellent. When we have the vaccines, we must be able to vaccinate many people on a daily basis. This is necessary to be able to make sure that in the beginning of the fourth quarter, many of our citizens are already vaccinated.

Then you’ll have this consumer spending because of the election, which would complement the numerous stimulus packages that have been put into the economy from the Bayanihan 2, which supported business continuity and the resumption of economic activity through aids and subsidies, regulatory reliefs, and tax breaks and exemptions. The CREATE bill, which would lower the corporate income tax rate to 25 percent for big firms and 20 percent for small enterprises from the former 30 percent, and the proposed Bayanihan 3, which is set to push for a P420 billion allocation to revive the economy through subsidies, social amelioration programs, and unemployment assistance, among others.

In the success of all of these, our economy shall bounce back in the fourth quarter, then we’ll have a great 2022.