La Niña adds to inflation woes
A more-entrenched La Niña climate phenomenon that brings above-normal rainfall to the Philippines could increase the pressure on prices of basic commodities to rise further, especially if heavy rains destroy this year’s main crop of rice and other produce.
This likelihood is growing especially after recent heavy rains and a magnitude 7 earthquake ravaged the summer rice crop, as well as P1 billion worth of corn and P253 million worth of irrigation facilities—mostly in Northern Luzon.
If La Niña takes an additional toll on agricultural production, the Philippines may have to depend on importation, especially with several commodities such as onions reported to be experiencing a shortage.
Chances that the La Niña climate phenomenon will continue to prevail in the next three months rose to 91 percent from the 86 percent forecast in August.
According to the latest bulletin from the Climate Prediction Center (CPC), which is part of the United States National Oceanic and Atmospheric Administration, indicators of an active La Niña system intensified further over the previous weeks.
Cooler-than-average sea surface temperatures (SSTs) across the equatorial region of the Pacific Ocean were recorded at as much as 1.1 degree Celsius below normal.
Meanwhile, temperatures that were colder than normal below the sea surface persisted.
Further, abnormal wind behavior continued to be observed at the low and upper levels of the atmosphere above the equatorial Pacific Ocean.
“La Niña is favored to continue through [the] Northern Hemisphere winter 2022-23, with a 91-percent chance in September-November, decreasing to a 54-percent chance in January-March 2023,” the CPC said.
The American agency also said there was still uncertainty over how long La Niña would last and when it will transition to “neutral,” meaning there is neither La Niña nor El Niño.
In recent months, supply issues related to meat such as pork as well as fish had helped boost inflation. The rate of increase in prices of basic goods and services was recorded at 6.3 percent in August.
Government economists expect inflation to reach a peak later this year, although the impact of inflation on the cost of living is likely to be exacerbated by the weakness of the Philippine peso against the US dollar.
The peso sank to all-time weakest levels in five consecutive trading days earlier this month to as weak as 57.18:$1, but has since recovered to 56.82:$1 on Sept. 9. INQ
