THE anticipated weak-to-moderate El Niño this year will not lead to a “surge” in food prices since its impact on local food production would be muted amid foreseen minimal output reduction, the Department of Finance (DOF) said.
Finance Secretary Benjamin E. Diokno disclosed that the National Economic and Development Authority (NEDA) presented its latest forecasts on the impact of El Niño during a recent Cabinet-level meeting.
Diokno said, based on the Neda’s estimates, the weak to moderate El Niño—expected to start in the second semester and last until the first quarter next year—would not cause a “significant” reduction in local food output, particularly for rice and corn.
“As a result, we do not foresee a surge in food prices,” he said in a press briefing recently, where he talked about updates regarding the first meeting of the Economic Development Group (EDG) of the Marcos Jr. administration.
Based on latest government estimates, the DOF said rice production may “slightly” fall this year by 1.8 percent on an annual basis while yellow corn output could decrease by 1 percent year-on-year due to El Niño.
Onion and garlic production, DOF added, are expected to remain unchanged since they are grown in the first half of the year while El Niño’s impact on pork and chicken production would be “negligible.”
“For the fisheries sector, El Niño is beneficial for the capture fisheries but disadvantageous for aquaculture,” it said.
Nonetheless, Diokno revealed that Neda has proposed the creation of an El Niño team, following the instructions of President Marcos Jr., to lead the government’s response to the ill effects of the weather phenomenon.
The government is now preparing to mitigate the impact of El Niño, with actions to retool and strengthen the disaster task force and weekly monitoring of local field conditions.
The government will also conduct regional coordination meetings, training, assessment, consultation and reporting as well as provision of irrigation network services. A buffer stocking of agricultural inputs and prepositioning of pumps and engines are under way.
Earlier this month, Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla said the severity of the El Niño, and not its timing, will be a greater factor to consider in terms of its impact on inflation. (Related story: https://businessmirror.com.ph/2023/05/04/bsp-flags-el-ninos-inflation-impact/)
The Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) earlier warned there is an 80-percent chance that an El Niño will start sometime in June to August and continue until the first quarter of 2024.
Meanwhile, the Asian Development Bank (ADB) has advised Manila to ensure unhampered entry of food imports in light of the expected El Niño to protect vulnerable sectors from supply and price shocks. (Related story: https://businessmirror.com.ph/2023/05/08/adb-nix-food-import-curbs-to-ensure-supply-in-el-nino/)