The Philippines is among the Asian countries that are most vulnerable to El Niño in terms of impact on economic growth, prompting a monetary policy rate hike, according to Nomura Group.
Climate experts have announced that El Niño will bring lower-than-usual rainfall to the Philippines and threaten agricultural production.
At the same time, the United Nations’ Food and Agriculture Organization (FAO) reported that international prices of rice have been increasing in most exporting countries, including Vietnam and Thailand, from where the Philippines usually imports rice.
Nomura says El Niño could limit agricultural production and drive higher food inflation, especially among net food importers like the Philippines. It also sees India, the Philippines, and Thailand as vulnerable to downside growth risks.
The Philippine government plans to import 330,000 metric tons of rice this year to cover an expected deficit in the buffer stock.
According to Nomura, a severe occurrence of El Niño could eat away 0.2% of the Philippine GDP growth.
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