The El Niño phenomenon would be the country’s biggest risk for 2024, an economist said.
“There is a 56 percent chance according to scientists, that the largest El Niño in the world, in history, will happen in the Philippines. That is our biggest risk for this year,” said economist and professor Ronilo Balbeiran, during the economic briefing hosted by the Mandaue Chamber of Commerce and Industry on Friday, February 16, 2024.
He noted that there are only two events—political instability and calamity—that could make the country’s economy go negative. The past crises, he said, even global economic events did not actually affect the Philippines towards a negative economy.
“The Covid-19 pandemic was not an economic crisis, it was a health crisis that forced us to work from home,” he noted.
According to Balbieran, the government agencies including some players in the private sector are in “alert mode,” with stakeholders in the recent water infrastructure summit in Manila talking about how to fast-track more water projects, including irrigation, among others.
“Everybody is in alert mode now,” he said.
The country grew 5.6 percent in 2023, missing the target of six to seven percent as rising inflation and interest rate hikes dampened household spending power. For this year, the government eyes the country to grow by 6.5 to 7.5 percent.
Extreme weather conditions like El Niño can constrain the supply of rain-driven agricultural commodities that could lead to higher food prices and inflation.
Although the inflation rate has eased in the past months, the Bangko Sentral ng Pilipinas (BSP) said risks remain tilted toward the upside.
Upside risks to the inflation forecasts are linked mainly to higher transport charges, increased electricity rates, higher oil and domestic food prices, and the additional impact on food prices of a strong El Niño episode. On the other hand, the implementation of government measures to mitigate the impact of El Niño weather conditions is the primary downside risk to the outlook.
The country forecasts inflation to settle between two to four percent in 2024.
The country’s El Niño Task Force earlier reported that the number of provinces affected by the El Niño phenomenon was reduced from 50 to 41, according to a report of the PCO.
Of the 41 provinces, El Niño Task Force spokesperson and Presidential Communications Office Assistant Secretary Joey Villarama said 17 provinces are experiencing dry conditions while 10 provinces are experiencing dry spells and 14 provinces are experiencing drought. He assured the public that the task force will continue implementing measures to stave off the effects of the El Niño phenomenon. He added they will particularly focus on the effects on the agriculture sector.
Among the ongoing measures against El Niño, he pointed out, include the ongoing repairs of irrigation systems in affected areas to ensure efficient water supply to crops, and the distribution of farm inputs and implements to farmers, particularly in the regions of Western Visayas and Zamboanga Peninsula.
The Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa) has cautioned the public to expect warmer days ahead as the El Niño may already be at its peak.
The weather bureau said 41 provinces throughout the country are under a state of dry conditions, dry spells and drought. By April and May, Pagasa projects the number of affected provinces to rise to 80.
According to Pagasa Visayas, Cebu and 10 other provinces in Visayas are feeling the effects of the ongoing El Niño.
A Sunstar report said that as of January 2024, 10 of the 11 provinces were experiencing dry conditions, with only one province undergoing a dry spell, according to Pagasa Visayas chief Alfredo “Al” Quiblat Jr.
Areas under dry conditions included Cebu and Negros Oriental in Central Visayas; Antique, Capiz, Guimaras and Iloilo in Western Visayas; and Biliran, Eastern Samar, Leyte and Samar in Eastern Visayas.
Negros Occidental in Western Visayas was the only province experiencing a dry spell. S