Philippine economy

[ANALYSIS] To heal fast, PH economy needs these 2 injections

JC Punongbayan

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[ANALYSIS] To heal fast, PH economy needs these 2 injections

Illustration by DR Castuciano

'Crucial as the vaccines are, at the present rate of vaccination, government will take almost 64 years to inoculate the targeted 70 million Filipinos'

With the first two waves of vaccines arriving this week on Philippine soil – 600,000 Sinovac vaccines from China and nearly 500,000 AstraZeneca vaccines from the COVAX Facility – Duterte’s economic team has expressed renewed optimism about the economy’s prospects.

Most recently, Presidential Adviser for Entrepreneurship Joey Concepcion claimed that economic recovery will be in full swing by the fourth quarter of 2021. “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,” he said in an interview.

Crucial as the vaccines are, at the present rate of vaccination (about 9,000 people in the past 3 days) government will take almost 64 years to inoculate the targeted 70 million Filipinos.

It’s also easy to overstate the importance of the vaccines. While we’re waiting for more significant supplies to arrive, government must look after the millions of Filipinos still reeling from the economic crisis – by quickly and efficiently handing out enough economic aid.

In short, the Philippine economy’s recovery will hinge on two types of injections: the COVID-19 vaccines, and cash injections for the poor, workers, and small businesses.

COVID-19 vaccine injections

Watching the daily news on the Duterte government’s vaccine rollout, there’s little reason to believe that the vaccines alone – even as they start arriving – will save our economy any time soon.

First, government is vaccinating Filipinos exceedingly slowly. We’re the last in ASEAN to get our hands on any vaccines at all, and we could’ve obtained them earlier had it not been for the gross incompetence and lack of urgency of some government officials. (READ: Duterte’s vaccine program is peak incompetence)

Second, many Filipinos have been robbed of a proper choice of vaccines. In the past week health workers (including some friends of mine) seemingly had no choice but to take the Sinovac vaccines that arrived first. Until a few days ago even vaccine negotiators themselves weren’t sure when the next batch of vaccines would arrive. 

Third, government is miserably failing to redress heightened vaccine hesitancy, which will surely stymie the vaccination effort – partly because of the Dengvaxia scare that Duterte and his ilk stoked a couple of years back, but mainly because of their confused, chaotic vaccine communications at present.

Just as key officials want people to take the Sinovac vaccines, they themselves refuse to take it, citing restrictions set by the Food and Drug Administration. Some have tried but failed to appease us with phrases such as “this is better than nothing” and “don’t look at these nitty-gritty details.” But we can’t even look at these nitty-gritty details since Sinovac hasn’t yet released crucial, peer-reviewed Phase III trial data

At the same time, Duterte himself has dissed and cast doubt on the Western vaccines (made by “white people”), even if they’re demonstrably very good at reducing the risks attendant to COVID-19. 

Unless government gets its vaccine communications together, many Filipinos won’t want to take the jab.

Fourth, news keeps cropping up of people cutting in line to get jabs ahead of everyone else, including our health frontliners. On the one hand, you have people close to the President unabashedly smuggling vaccines and getting away with it. On the other hand, you have other officials – including a DILG undersecretary, the MMDA chief of staff, and a legislator – openly flouting the priority list

These breaches could well imperil our vaccine supply. Said the WHO Representative to the Philippines Dr. Rabindra Aeyasinghe, failing to follow prioritization could “jeopardize future deliveries of vaccines through the COVAX Facility.”

Cash injections

Until government steps up and accelerates its vaccination program, they must infuse the economy with cash injections to help our fellow Filipinos desperate for economic relief.

Government officials are underestimating the economic hole we’re currently in. Economic output shrank by 9.5% last year, the biggest drop since World War II and in ASEAN. Hunger skyrocketed. The proportion of households with savings reached a record low. Arguably, we’re the “sick man of Asia” again. On top of all this, prices are skyrocketing again.

I’m currently co-teaching basic macroeconomics at the UP School of Economics, and to kick off the semester I asked my students to share how they were personally affected by the recession. There were stories of parents losing (or nearly losing) their jobs, family businesses closing down, tighter budgets, students taking on side hustles, etc.

Yet amid widespread economic misery, government is stubbornly refusing to give Filipinos aid. Aside from being morally bankrupt, it’s also economically unsound: if people don’t have money to spend, how can we expect them to prop up our consumption-driven economy? 

Putting money in the hands of people seems the obvious solution, and even leading businessmen are saying as much. 

Manny V. Pangilinan explained recently, “People will have lesser and lesser money in the course of time. They don’t have jobs. Demand continues to contract and then businesses will suffer as a consequence. It makes recovery much harder to accomplish.” Meanwhile, Jaime Augusto Zobel de Ayala said, “as we await the rollout of our vaccination program, it is imperative that we find measures to support the economy and our people.”

It’s not surprising to hear them somehow give support to Bayanihan 3, a P420-billion economic relief package crafted by some lawmakers to give aid directly to the poor, workers, and small businesses. 

More and more governments have moved in the direction of colossal aid, as exemplified by US President Joe Biden’s $1.9 trillion rescue plan

Economists abroad (even deficit hawks) are also changing their tune when it comes to handing out massive economic relief. The goal is not so much to stimulate economic activity (as one might do in a typical recession) but to keep households afloat and safe amid the pandemic. Such aid also needs be targeted to the extent possible. 

These days any self-respecting economist sees the logic and necessity of providing ample and prompt economic relief – except Duterte’s economic managers. Maybe they’re too busy to monitor international trends. Or maybe it’s because the head of the economic team – who influences too many other policymakers even in Congress – isn’t even an economist at all.

In any case, Filipinos need aid fast. By flatly refusing proposals for large-scale economic relief, Duterte’s economic managers are inadvertently responsible for delaying the economy’s recovery – and are shooting themselves in the foot.

Rather than wait for the vaccines and provide aid, they just want to reopen the economy as quickly as possible. 

But this reckless policy only gives people a false sense of security, a reason to put their guard down. It’s as sensible as constantly picking at a scab before the wound heals completely. The more you do it, the slower the wound heals – and the likelier it leaves a lasting scar. (READ: The mad, reckless rush to reopen the PH economy)

In a bid to boost economic productivity, they also managed to convince Duterte to turn 3 key holidays – Christmas Eve, New Year’s Eve, and All Souls Day – into working holidays. Seriously? We know who’s on Santa’s naughty list this year. –

JC Punongbayan is a PhD candidate and teaching fellow at the UP School of Economics. His views are independent of the views of his affiliations. Follow JC on Twitter (@jcpunongbayan) and Usapang Econ (

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JC Punongbayan

Jan Carlo “JC” Punongbayan, PhD is an assistant professor at the University of the Philippines School of Economics (UPSE). His professional experience includes the Securities and Exchange Commission, the World Bank Office in Manila, the Far Eastern University Public Policy Center, and the National Economic and Development Authority. JC writes a weekly economics column for He is also co-founder of and co-host of Usapang Econ Podcast.