Confidence Boosters
The pledge of G-7 leaders to provide at least 1 billion vaccine doses to 92 poor and lower-middle-income countries and last week’s emerging positive domestic trade figures are a big confidence booster.
The business community and Filipinos in general will welcome these positive developments. As more vaccines are made available to the population, Filipinos get the reassurance that it has become safer to leave their homes and participate in economic activities.
The G-7 comprising of the United States, Canada, France, Germany, Italy, Japan and the United Kingdom obviously began to realize that they need the rest of the world to effectively fuel the global recovery. Several foreign institutions and nations have increasingly called on these richer countries to scale up their efforts to share Covid-19 shots with less developed states.
The US ahead of the agreement committed 500 million jabs to 92 poor and lower-middle-income nations, while the UK pledged at least 100 million surplus doses within the next year, including five million beginning in the coming weeks. These two countries can well afford to share their vaccine doses after building surpluses early or storing more than enough to inoculate their entire population and contain the pandemic.
The Philippines will certainly receive a share of the donated vaccines. The US, for one, is channeling the surplus and its unused vaccines through the COVAX program that seeks an equitable distribution of the jabs across the globe.
The Philippines, like any developing nation, is striving to accelerate the vaccination program in order to fully reopen the economy. We are not faring badly in the inoculation drive. Outside of the G-7 pledges, the Philippines is expecting the arrival of 18 million more vaccines toward the end of June. This latest arrival can fully vaccinate 9 million Filipinos, on top of the over 5 million who have already received the doses.
Vaccinating more Filipinos, along with the usual precaution of wearing face masks, hand washing and social distancing, is key to the full re-opening of the economy. We have seen how the vaccine rollouts in the US and Europe have led to the return of economic activities that include the opening of dine-in restaurants, sports activities, gyms and tourism.
We have not yet vaccinated enough of the population as we want to. It may take a while and will depend on how soon the Philippines can obtain the bulk of the vaccines needed to inoculate at least 30 percent to 50 percent of the population. But I believe Filipinos, especially the working class, have learned to adapt and live with the virus.
The relatively low infection rate in the NCR Plus comprising of Metro Manila and four nearby provinces is proof of this resiliency. I am pleased to learn that Malacañang is leaning toward the relaxation of quarantine rules in the NCR Plus by June 15. Placing the expanded region back to the ordinary general community quarantine status after June 15 will be a welcome relief to our workers and small and medium-sized business establishments.
Positive trade figures
There are telltale signs that the economy is starting to recover. The trade figures released by the Philippine Statistics Authority last week show that exports and imports in April jumped 72 percent and 141 percent, respectively, against the background of global trade reopening. The aggressive rollout of Covid-19 vaccines in Asia and the rest of the world is also helping global trade and boosting the confidence of manufacturers.
April exports surged to $5.71 billion from $3.32 billion in the same month last year, while imports hit $8.45 billion. Although the sharp rise in trade figures is expected because of the low base in 2020, the increased trade activities suggest that more Filipinos are rejoining the labor force, especially in the export sector.
I find the big increase in imports equally significant. Rising imports mean our factories will start to expand production in the coming months. They also show that the manufacturing sector has regained business confidence amid the vaccine rollout and easing quarantine rules.
I am confident that more positive economic data will come out in the second quarter and the succeeding periods. The partial economic reopening is creating jobs and creating a multiplier effect.
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