Gov’t borrowings, grants for COVID-19 response hit $15.5B

The $1.2 billion in loans secured by the Philippines from multilateral institutions for the purchase of vaccines have jacked up total borrowings and grants to fight COVID-19 to $15.49 billion or P752 billion to date, the Department of Finance said.

The updated list of financing that the DOF obtained to boost the COVID-19 war chest as of April 8 included the loans amounting to $500 million from the Washington-based World Bank, $400 million from the Manila-based Asian Development Bank (ADB), and $300 million from the Beijing-based Asian Infrastructure Investment Bank (AIIB).

All three new loans were signed by Finance Secretary Carlos Dominguez III on behalf of the government last month.

Equivalent to over P58 billion, these three loans accounted for the bulk of the P70 billion in unprogrammed appropriations for the mass vaccination program, which had been set aside in the P4.51-trillion 2021 national budget.

Last month, Finance Undersecretary Mark Dennis Joven said there was no need for additional loans yet to cover the over P11-billion balance.

In all, the national government allocated P82.5 billion for vaccine procurement and rollout this year, including P2.5 billion in the Department of Health’s (DOH) budget plus the P10 billion released to the DOH in February under the Bayanihan to Recover as One Act or Bayanihan 2 law.

Herd immunity

The government targets to vaccinate 70 million Filipinos or the entire adult population by the end of the year to achieve herd immunity, which will lead to the reopening of the economy. The country has been under the longest and most stringent COVID-19 quarantine in the region since March last year.

The World Bank’s additional financing for the Philippines’ COVID-19 emergency response project took effect on March 31. This means the DOH, which implements the nationwide inoculation program, can draw from these funds to directly pay vaccine suppliers.

Joven had said the World Bank loan would cover vaccines purchased from Moderna Inc.

The ADB’s and AIIB’s combined financing of $700 million for the DOH’s $714.57-million second health system enhancement to address and limit COVID-19 (Heal 2) project had yet to take effect.

The ADB loan will be disbursed for Novavax Inc.’s Covovax doses.

These three vaccine loans formed part of project loan financing worth $2.12 billion to date. These loans were earmarked for specific projects, hence were not injected into the budget.

Last year, the DOF secured $13.35 billion in foreign financing for budgetary support to COVID-19 response, mostly from loans extended by development banks as well as bilateral partners like France, Japan and South Korea.

The DOF also tapped last year the offshore bond market to raise additional funds. INQ