Malacañang on Tuesday refined President Rodrigo Duterte’s remarks questioning the legality of the demand of vaccine manufacturers for the national government to pay the liability for adverse effects of COVID-19 vaccines procured by the private sector, saying the President should have said that the government cannot pay for indemnity because of willful or gross negligence.
“Duterte did not misread the COVID-19 Vaccination Law. It is stated in the law that the government cannot pay for indemnity because of willful or gross negligence,” Presidential spokesman Harry Roque said.
“I hope we have already taken the President’s remarks in proper context,” he said, adding “the Chief Executive does not need to be reminded of the COVID-19 Vaccination law provisions.”
In his public address Monday night, Duterte said he found “holes” under the indemnity clause in vaccine procurement contracts that require government to assume liability for private sector-procured vaccines.
Meanwhile, Albay Rep. Joey Sarte Salceda said President Duterte’s statement on indemnification should be taken only in the context of the law he signed, Republic Act 11525.
The law sets a P500 million indemnification fund that the President can terminate. This hedges us from unwarranted fiscal risks, Salceda, chair of the House committee on ways and means, said.
"In management and financial engineering, the sector I came from before I served in Congress, we have a practice called risk allocation. The burden of risk an entity bears should be proportional to the amount of control the entity has over the risk factors. Most of the risks associated with vaccines can be controlled at the production stage. The risks we control are only in administration and storage, so we can only competently answer for risks from these factors," Salceda explained.
In related developments, Senators Panfilo Lacson and Risa Hontiveros on Tuesday hit back at Duterte for criticizing them for asking about the country's low vaccine supply despite obtaining billions of loans.
In his televised address on Monday, Duterte lambasted Lacson and Hontiveros for questioning where the COVID-19 vaccines procured by the government are, which would be funded by various international loans.
Duterte explained that the loans for the vaccine procurement were still with the lending banks.
“If you are afraid of corruption, let your mind go easy because these things are not susceptible to anything. The money is in the hands of the banks and they collect... from the bank,” he said.
A law has been signed establishing a P500-million indemnity fund as a salient feature in the government’s COVID-19 vaccine procurement program, but Duterte explained that it is illegal for government to assume liability to pay compensation to those who would suffer from the adverse effects of the vaccines procured.
“The manufacturers want the private sector to buy, but the government will assume liability. This cannot be,” Duterte, a lawyer and a former prosecutor said.
Only recently, vaccine czar Carlito Galvez Jr. said that all contracts for the vaccine procurement have an indemnification clause.
However, Duterte said the indemnity clause in vaccine procurement contracts could even be “illegal”.
“There’s a big hole there, actually on assumption of liability. No, this cannot be. Tell them sorry because Rody said he will not pay because we are not allowed to sign any agreement to that effect,” he said.
“Then there’s the payment and the indemnification that the government will pay? No. I do not think that it will be legal. Tell them, it’s illegal for us to do that. Congress is the only one that can do that, nobody else,” Duterte said.
He said the government cannot guarantee much less give an immune status the manufacturers free of any liability.
The President said he raised the question because the government would be prevented from going after vaccine manufacturers.
An act of Congress may be needed to resolve the questionable indemnity clause, he added.
For her part, Hontiveros said there was nothing new on what Duterte said on Monday about where the funds are, but she believes that the money still being with the banks is “half truth.”
“I am not looking for the money that is still with the ADB (Asian Development Bank), AIIB (Asian Infrastructure Investment Bank) and World Bank for the vaccines...Where's the rest of it?” she asked.
“More than half a trillion pesos are said to be for the COVID-19 response. Where's the rest of it, when can we feel that? '
Replying to the issue, Finance Secretary Carlos Dominguez III said the country had allocated a total P82.5 billion for vaccine, logistics and other supplies, including waste disposal, as part of the government's COVID-19 vaccination program.
Of the P82.5 billion, P2.5 billion will come from the budget of the Department of Health; P10 billion from the funds set aside for Bayanihan 2 Act; and P70 billion from various loans and financing.
The loans will come from the World Bank (P24.3 billion); Asian Development Bank (P19.5 billion); and Asian Infrastructure Investment Bank (P14.6 billion). The remaining P11.6 billion will come from Official Development Assistance funds.
Also, Ako-Bicol Rep. Alfredo Garbin echoed Salceda's view, noting the COVID-19 Vaccination Law provides a legal framework for the vaccination program, including the participation of private entities under a tripartite agreements with the national government and the manufacturers.
"The requirement for a tripartite agreement is specified for three reasons: manufacturers of available COVID-19 vaccines require that indemnification be covered by the national government before finalizing any procurement deals; it is the national government that will shoulder the cost of adverse effects; and available vaccines are only those provided with EUA," added Garbin.
Elsewhere, Sputnik V, the COVID-19 vaccine developed by Russia's Gamaleya Institute which has been given emergency use authorization in the Philippines, can be used by the elderly, the Food and Drug Administration said.
Around 2,000 people or about 10 percent of the vaccine's clinical trial participants are senior citizens, said FDA Director General Dr. Eric Domingo, quoting peer-reviewed medical journal The Lancet.
The FDA last week cleared Sputnik V for emergency use after its late-stage trial results showed the vaccine was 91.6 percent effective in preventing COVID-19.
The efficacy rate of the vaccine, which comes in a 2-dose regimen administered 3 weeks apart, is consistent among all age groups 18 and older, Domingo had said.
About 25 percent of the vaccine's trial participant also had comorbidities like hypertension, and the result on them was good, added Domingo.
Battling a surge in coronavirus infections, the Philippines has so far received 600,000 Sinovac shots and 525,600 AstraZeneca doses.
Vaccination in the country is now entering its fourth week.
Meanwhile, the remaining Sinovac COVID-19 vaccine shipments donated by China is set to arrive at the Ninoy Aquino International Airport today.
Legacy carrier Philippine Airlines on Tuesday sent a Boeing 777 aircraft to pick-up the 400,000 doses of vaccines from Beijing.
The vaccines' arrival at the NAIA terminal 2 will complete the one million doses the Chinese government has donated to the Philippines’s campaign against the spread of the deadly coronavirus disease.
PAL spokesperson Cielo Villaluna said the return flight to Manila - PR361 – would arrive at 7:25 a.m. at Terminal 2.
"This will be a milestone flight for PAL as it marks the flag carrier's first airlift of COVID-19 vaccines to Manila from an international hub. This mission makes PAL the first local carrier to fetch and carry home much-needed vaccines for our country," she said.