Finance Secretary Benjamin Diokno expects El Niño to have a minor to medium effect on the country’s domestic food production this year.
During the weekly Chat with SBED briefing, Diokno said that El Niño will unlikely to have significant effect on local production, particularly for rice and corn, even though the weather phenomenon is expected to persist until the first quarter of 2024.
Diokno, citing weather forecasts, said that many regions in the country are expected to have lower-than-normal rainfall in October, with a high probability of an intensified Southwest Monsoon, particularly during July and August.
Additionally, certain areas in Visayas and Mindanao might encounter early effects of dry conditions or a dry spell.
In agriculture, most production losses caused by El Niño are anticipated to occur in the rice and corn sectors.
“The transition to El Niño is expected in the next months, with over 90 percent chance of persisting up to the (first quarter of) 2024. However, most models show that El Niño will be weak to moderate,” Diokno said.
Nonetheless, Diokno said preliminary estimates indicate a minor decrease in domestic rice production this year, amounting to approximately 1.8 percent, while yellow corn production is expected to decrease by one percent.
“There is also a minimal reduction in white corn production,” he said. “Production of onion and garlic is [also] expected to remain unchanged since they are typically grown in the first half of the year.”
The finance chief also expects a minor impact on pork and chicken production, while El Niño will benefit the capture fisheries.
“With the projected weak to moderate El Niño, we do not expect a significant reduction in local production especially for rice and corn,” Diokno said.
Diokno said that the forecast makes the government’s 6.0 to 7.0 percent growth target for this year attainable.
However, Diokno acknowledged that the outlook for the world economy remains dismal, with the International Monetary Fund and World Bank projecting 2023 global growth of 2.8 percent and 1.7 percent, respectively.
“The downside risks include synchronized monetary tightening, the fallout from recent deterioration in financial conditions, growing economic fragmentation, and continued Russia’s invasion of Ukraine,” Diokno said.
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