Urgent need for a clear COVID-19 vaccine policy

Posted December 26, 2020

Up to now, the Philippines has not been informed of any clear and definitive government policy about important matters pertaining to the procurement, funding, and cost-sharing of vaccines against COVID-19.

Ben Punongbayan, Chairman and Founder of Buklod, a national political party, expressed that the government must make clear the applicable state policies in this regard so that the procurement of the vaccines and their final use to inoculate the Philippine population can proceed smoothly and with the least number of distractions.

First, he said, it is still not clear whether the vaccines will be given to the citizens free of charge or not, although the vaccine czar Carlito Galvez has been quoted as saying it will be given free to all Filipino citizens.

Second, it is still confusing how the procurement will be initiated and handled: All by the government itself or partly initiated by the private sector with the help of the government?  The vaccine czar has also been quoted as saying he would recommend that local government units can also purchase vaccines. If the latter, how will the whole enterprise be coordinated?

A third concern is how is the choice of vaccine be based upon considering that there are variations in the efficacy and price of available and soon-to-be-available vaccines?

Another is how will the payment for the cost of the vaccines be sourced? From the government budget entirely and the consequent public borrowing? Or partly from voluntary funding by the private sector? In the latter case, how is the total cost expected to be allocated between the government and the private sector?

As it stands today, it appears that the only procurement that had already been contracted is for the supply of 2.6 million doses of vaccines from AstraZeneca which will be funded by private business. This supply is scheduled for delivery in April or May next year. It appears that one-half of the 2.6 million doses will be donated by the business consortium to the government and the other half will be given by the participating business entities to their employees.

In any event, Punongbayan said the 2.6 million doses already procured are far too small from the estimated total requirement of 150 million doses, at two doses per person, that would be needed to vaccinate 70% of the Philippine population, the higher end of the range of the extent of inoculation that has been reported to be required for the country to achieve herd immunity. How then would the remaining huge balance be procured?

According to Punongbayan, it appears that there is still no clear and definite plan about procurement, funding, and cost-sharing. This is a great pity because the longer these matters are not dealt with properly, the greater the number of lives that would be lost unnecessarily and the longer the economic recovery would be delayed.

He believes that the government must develop and announce an overall policy for providing the necessary inoculation of the Philippine population for the guidance of everyone. Whatever that policy is.

The Buklod founder pointed out that the government must provide free vaccination to the Philippine population up to the extent that herd immunity is achieved. It also must specify the acceptable efficacy level when choosing from available and soon-to-be available brands. So as not to delay the procurement, the government should bear all the cost and then possibly raise taxes to fund it.

Any other alternative will delay achieving herd immunity and, consequently, more precious lives will be lost, and economic recovery will be similarly delayed.

The cost of the vaccine varies widely. Information recently released by the Office of the Chair of the Senate Finance Committee, Sen. Sonny Angara, lists seven vaccines with prices for two doses ranging from P366 (Novavax) to P4,204 (average price of Moderna).

On a simple averaging basis, Punongbayan estimates that the total cost of 150 million doses (equivalent to 75 million sets of two doses each) would be about P142 billion.

Of course, the actual cost would go up or down, depending upon such factors as acceptable efficacy level of the vaccine and readiness of supply. In any case, this total cost indicator is far more than what has been reported in the media as the equivalent amount included in the 2021 government fiscal budget.

To pay for this estimated total cost of the vaccines, Punongbayan suggests that the government consider raising accordingly the corporate income tax rate and the upper bracket rates of the personal income tax on a temporary basis for the next two or three years.

He explained this way, those who have ample resources will bear the total vaccine cost and those who cannot afford to pay for the vaccine will get their inoculation for free. No Filipino will therefore be left behind. In any event, the Philippine business sector has already expressed in words and in deeds their willingness to contribute to the funding of the purchase of the vaccines.

Doing such funding through the income tax mechanism will be more efficient, fair, and assured. It also avoids government deficit spending and its serious unfavorable consequences. To reduce the level of income tax increase, the budget allocation for the legislators’ pork barrel may be transferred to the allocation for COVID-19 vaccine. That will be a much better funding alternative.

In any case, the government must develop an overall self-contained scheme in whatever breadth and depth and announce it to the public. We, the people, deserve it, Punongbayan concluded.

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