Philippines gets $900 million loans for COVID-19 vaccines

MANILA, Philippines — The Philippines on Friday secured the bulk of its funding needs for coronavirus vaccines from multilateral lenders, officially making the money not a problem in securing inoculations.

Loans worth $900 million were secured from the Asian Development Bank and the World Bank, separate statements from both agencies said. Broken down, ADB will contribute $400 million, while the World Bank grants a larger $500 million.

The loans were separately approved by the multilateral agencies, but it would take a few more days to weeks for the official loan agreements to get signed. Terms of at least one loan, that of the ADB, were immediately available: that credit from the Manila-based lender will be payable for 10 years, inclusive of a 3-year grace period.

Both loans will be charged applicable concessional interest rates.

“Procuring and administering vaccines provides the country an added layer of defense against COVID-19 on top of public health measures or interventions like social distancing, wearing of masks and washing hands,” Ndiame Diop, World Bank country director, was quoted as saying in a statement.

Separately, ADB President Masatsugu Asakawa said: “COVID-19 vaccines are critical to accelerating the recovery of the Philippine economy, rebuilding livelihoods, and restoring quality jobs. With this financing, ADB seeks to help the country save lives and allow Filipinos to return to normal life as soon as possible.”

One last loan for vaccine procurement, this time from China-based Asian Infrastructure Investment Bank, worth $300 million is still pending approval from its board, although highly likely to get approved. Together, the $1.2-billion funding from these multilateral agencies occupy the bulk of the P82 billion— around $1.7 billion in current exchange rate— in funds devoted by the Duterte administration for vaccines.

So far, the ongoing COVID-19 vaccination on health workers and other front-liners has been using around 1.4 million doses of donated vaccines from China and the COVID-19 Vaccines Global Access or COVAX facilities led by the World Health Organization. Most of these inoculations had already been injected.

Vaccines to be purchased are not scheduled to arrive until the third quarter of this year, the delay to which was blamed by the government on tight global supplies. Yet as it is, the government was also slow in signing supply agreements with big pharma firms for the purpose of securing the needed vaccines.

Loans to go directly to suppliers

Under the plan, the ADB and World Bank loans will not be directly handed out to the government. Instead, the government would have to approach the agencies as soon as they signed an acceptable supply agreement with drug-makers to access the funding. So far, the government is working out an agreement with vaccine makers AstraZeneca Plc of the UK, Pfizer Inc., Novavax Inc. and Moderna Inc. of the US.

The Philippines has so far signed up for 1 million doses from Sinovac of China.

Once an agreement is verified, ADB or the World Bank will be the one to pay the drug-makers directly, without the cash going through the Philippine government. “The fund will be directly paid to the supplier. It won’t go to government account,” Sasiko Tanaka, ADB’s social sector specialist for Southeast Asia, told reporters in an online briefing.

The loans inevitably add up to the growing government debt pile as a result of a costly pandemic response. As of December 15, the latest period on which data is available, the Duterte administration has borrowed $13.36 billion in the form of grants, loans and bonds.