DBM wants 15% limit on advance payments for vaccine increased

MANILA, Philippines — The Department of Budget and Management (DBM) said there is a need to raise the 15 percent limit on advance payments for the procurement of COVID-19 vaccines.

In a statement, Budget Secretary Wendel Avisado said easing the limitation would ensure the timely and efficient implementation of the government’s COVID-19 vaccination program.

Avisado said the authority, which allows the advance payment of up to 15 percent, is provided under DBM Memorandum Order 172. This ceiling is applicable in exceptional cases, such as the procurement of goods during a state of calamity.

However, the government is  experiencing difficulties in negotiating with various pharmaceutical firms due to the limitations.

“What pharmaceutical industries want is for you to pay in advance before delivery. In other words, rich countries will really beat us,” he said.

Avisado also called for patience from the public as the government cannot divulge specific details on its negotiations with vaccine makers, such as prices and the modes of delivery, due to confidentiality agreements.

He assured the public that all transactions made by the government remain “legitimate and honest.”

The budget chief said the government is also committed to ensure the safe and timely procurement, transportation and administration of COVID-19 vaccines.

Avisado said the budget for the vaccines has been allocated and is now ready for release.

“The government has set aside P82.5 billion. Do not worry. Local government units are cooperating with us and they are also ready to buy as much as they can. We appreciate that very much,” Avisado said.

Meanwhile, DBM Assistant Secretary Rolando Toledo said in a text message that the agency is committed to expedite the release of funds to spur faster government spending, and to ensure that COVID-19 response and recovery programs remain unhampered.

This year, the DBM expects government spending to increase to P4.662 trillion, which is equivalent to 23.3 percent of gross domestic product.

Toledo said this growth would be driven by the combined impact of the timely passage of the 2021 General Appropriations Act (GAA) and the extension of the 2020 budget as well as the Bayanihan to Recover as One Act.

In the first month of the year, the DBM already released allotments amounting to P2.63 trillion, equivalent to 58.3 percent of the P4.506 trillion national budget for fiscal year 2021. This was 6.4 percent faster than the 51.9 percent allotment release rate recorded in the same month last year.

“With higher percentage of the budget already comprehensively released, the departments can already implement most of their projects for the benefit of our people and the economy,” Toledo said.

Data from the DBM also showed that the government has so far released P59.49 billion in additional funds under the Bayanihan 2 law. To date, almost all the allocated funds under the stimulus package have already been released to implementing agencies.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said the faster release of allotments in January could signal faster implementation of projects this year.

He said this could help further stimulate business activities and create more jobs for Filipinos, helping the country recover from the impact of the COVID-19 crisis.

Nicholas Mapa, senior economist at ING Bank, also said the speedy disbursement of funds would “ensure that the modest fiscal response would be maximized.”

Mapa, however, urged the DBM to release remaining funds carried over from the 2020 budget at the soonest, and frontload some of its spending to maximize the budget amid the economic downturn faced by the country due to COVID-19.