Super El Niño may nudge inflation higher

Super El Niño may nudge inflation higher | Daily Tribune

Lacsa said the PSA is set to release the May inflation data on Friday.

Earlier, the Bangko Sentral ng Pilipinas (BSP) projected inflation to settle between 7.1 percent and 7.9 percent, compared with the 7.2-percent rate recorded in April.

Over the weekend, Rizal Commercial Banking Corp. chief economist Michael Ricafort said inflation could climb to at least 8 percent in May as the spillover effects of the conflict in the Middle East continue to affect the prices of goods and services.

For her part, Department of Economy, Planning and Development Undersecretary Rosemarie Edillon said that despite the threat posed by the Super El Niño, the government does not expect inflation to reach double-digit levels in the second half of the year.

“It did not happen in the recent past. The last time we experienced double-digit inflation was in 2008. This time, we have found ways to mitigate El Niño,” she said in the same forum.

Edillon said the authorities are expecting economic conditions to improve in the latter half of the year, although fuel prices are likely to remain elevated. She expressed hope that higher gasoline and diesel prices would not trigger further increases in food and commodity prices.

Last week, Agriculture Secretary Francisco Tiu Laurel Jr. said the government had reactivated its El Niño task force as the weather phenomenon could significantly affect the country’s rice production, potentially reducing output by as much as 700,000 metric tons.

Laurel said El Niño conditions may persist for the next several months, raising concerns over food security and the livelihoods of farmers and fisherfolk.

Meanwhile, the World Meteorological Organization said there is an 80-percent chance an El Niño will develop between June and August.

“Fueled by unusually warm ocean waters in the tropical Pacific, El Niño conditions are developing and are set to influence global temperature and rainfall patterns. Forecasts indicate a pronounced shift toward El Niño conditions, with probabilities reaching 80 percent for June-August,” the Geneva-based organization said.