Saturday, August 15, 2020

BWorld 448, Growth, mobility and vaccines

* My column in BusinessWorld, August 13, 2020.

For countries and economies that have GDP data for second quarter (Q2) 2020 so far, the Philippines has had the deepest contraction of -16.5% in Asia. The same virus that affected all countries in the continent has produced very different results in economic performance — Why?

The answer is not the pandemic itself, but in the response and degree of restrictions and lockdowns imposed by country governments.

Google produces the “COVID-19 Community Mobility Reports.” Download the Excel, you will get big data, more than one million rows of data for many countries and states. The reports cover six areas measuring percent changes in mobility of people from the baseline day, the median value from the fiveweek period Jan. 3 – Feb. 6, 2020. These areas are Retail and Recreation (R&R), Grocery and pharmacy, Parks, Transit stations (TS), Workplaces, and Residential. In the table below, I chose only two for brevity purposes: R&R which covers restaurants, malls, libraries, museums, movie theaters; and TS that covers public transportation like buses, trains and taxis.

For Q2 2020 covering the period April 1 to June 30, I chose the midpoint date of May 15 as reference in Google mobility changes. Then I added the latest data for Aug. 7, the degree of restrictions of which will be reflected in Q3 2020 GDP data a few months from now. I also added the latest data for COVID-19 deaths per million population (DPMP).

From the Google data, it seems that the Philippine government has imposed the most draconian, most dictatorial lockdown policies in the whole world, which largely explains for the steep GDP contraction. Despite our DPMP being among the lowest in the world, only 1/5 of the world average of 95 DPMP (see the table).  

Now we suffer from endless, indefinite, no timetable lockdowns and mobility restrictions, until credible and safe vaccines become available.

There are at least two important issues when it comes to COVID-19 vaccines here. One is the seemingly gung-ho preference of President Rodrigo Duterte for vaccines from China, known globally for producing risky counterfeits of successful products and brands; or a vaccine from Russia. And, two, a need for a vaccine insurance system to encourage early entry in the Philippines of COVID-19 vaccines from globally reputable, research-based biotech and pharma companies.

Unlike medicines which are given to sick people, vaccines are given to healthy people to prevent future sickness from particular diseases. Vaccines under development normally take many years to be declared safe and effective. The COVID-19 vaccines are rushed and thus, there is the potential for vaccine-related side effects or adverse events in the future.

In the Dengvaxia case, both the innovator company and the previous administration were demonized and it has become a precedent, a big lesson why other innovator companies will be hesitant if not scared to bring COVID-19 vaccines to the Philippines.

One solution is to create a COVID-19 vaccine insurance fund that will serve as an indemnity fund for people who might suffer from any adverse events in the future. The fund will not come from taxes but from a certain percentage, say 1% to 2%, of the total procurement cost of the Department of Health (DoH) from various vaccine producers and suppliers, and the DoH will hold and keep the fund. In case some people someday claim and prove that they suffered adverse reactions from a vaccine, there is already a fixed amount set aside by the DoH. The amount may or may not be enough, but the patients will get compensation. No more filing of cases in court and things will be simplified.

Market-based vaccine and health insurance, not taxes and politics-based insurance. We need more of this, especially with the ongoing PhilHealth scandals involving billions of pesos of taxpayer money.

See also:
BWorld 445, Virtue signaling in energy, August 02, 2020 
BWorld 446, More water and investments, less political whims, August 07, 2020 
BWorld 447, Nuclear energy and PSA death statistics, August 08, 2020.

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