Philippines’ central bank braces for ‘Godzilla’ El Niño

{"text":[[{"start":6.8,"text":"The Philippine central bank has warned that a potential “Godzilla” El Niño weather phenomenon threatens to fuel inflationary pressures in an economy already reeling from high oil prices."}],[{"start":16.9,"text":"The El Niño phenomenon, a natural occurrence that causes higher Pacific Ocean temperatures and exacerbates extreme weather events, is the strongest on record in some places. It could worsen droughts and hit agricultural production across the southern hemisphere."}],[{"start":32.5,"text":"“There’s a potential that this could be a Godzilla El Niño that could affect the region, and the peak has yet to come,” Zeno Ronald Abenoja, deputy governor of the Bangko Sentral ng Pilipinas, told the FT in a video interview."}],[{"start":null,"text":""}],[{"start":46.05,"text":"“This is a type of a shock that is a slow burn . . . something that you can anticipate to progress slowly over the next four or five months,” Abenoja said."}],[{"start":54.8,"text":"The El Niño pattern, which has been classed as “very strong” by official agencies — and pre-emptively nicknamed after the Japanese movie monster by some observers — comes as the global economy is struggling with inflationary pressures from higher oil and gas prices."}],[{"start":71.35,"text":"In the Philippines and other countries, cost of living pressures have prompted protests and calls for more generous government subsidies."}],[{"start":null,"text":""}],[{"start":79,"text":"Inflation in the Philippines was 6.1 per cent in August, among the highest in south-east Asia and a level the central bank has forecast it will maintain for the full year. The country imports nearly all its oil and is highly reliant on food imports."}],[{"start":94.9,"text":"Abenoja said the BSP had been factoring El Niño into its policy decisions over the past few meetings. The central bank has raised rates by a total of 0.75 percentage points since April, bringing its benchmark rate to 5 per cent."}],[{"start":108.55000000000001,"text":"“It’s a tough period for policymakers for sure,” Abenoja said. “We think that headline inflation could remain elevated over the near term, just because of the continuing impact of some of the recent increases in oil prices and weather disturbances.”"}],[{"start":123.95000000000002,"text":"The El Niño phenomenon, which the World Meteorological Organization expects to peak in November or December and persist until at least February, is expected to have a widespread impact across the region."}],[{"start":137.00000000000003,"text":"In Asia, the shift in the trade winds that is behind the El Niño pattern has already brought high temperatures to many heavily populated capitals, delayed rainfall in some parts and worsened drought in others. In some places, it is also expected to worsen rainfall, raising the risk of floods."}],[{"start":153.95000000000002,"text":"India has warned that this year’s monsoon could be the driest in 17 years. In Indonesia, fires caused by slash-and-burn farming practices have been exacerbated by the El Niño effect, spreading toxic haze across south-east Asia."}],[{"start":168.50000000000003,"text":"Several south and south-east Asian countries have also warned of lower production of key agricultural commodities such as rice and palm oil."}],[{"start":177.80000000000004,"text":"Abenoja said the Philippine government had been taking preparatory steps by adjusting crop cycles and sourcing food items and commodities from overseas."}],[{"start":187.05000000000004,"text":"He declined to comment on whether the central bank would continue to increase rates. The BSP has previously said it is prepared to act to ensure inflation returns to its tolerance range of 2-4 per cent."}],[{"start":null,"text":""}],[{"start":199.75000000000003,"text":"In August, the BSP raised its inflation projection for 2027 to 5.4 per cent from its previous estimate of 4.5 per cent, reflecting the potential impact of El Niño on agricultural prices and the phased introduction of higher minimum wages in the Philippines."}],[{"start":218.85000000000002,"text":"The BSP, which economists say is one of the most inflation-sensitive central banks, was among the first in Asia to start raising rates after the US-Israeli strikes on Iran. However, it does not expect inflation to return to its target range until 2028."}],[{"start":234.65000000000003,"text":"Economic growth slowed after the government of President Ferdinand Marcos Jr cut state spending following a corruption scandal involving public infrastructure projects."}],[{"start":245.20000000000005,"text":"The Philippines’ economy grew 2.3 per cent year-on-year in the second quarter of 2026, its slowest quarterly pace in five years."}],[{"start":255.20000000000005,"text":"Abenoja said a planned increase in government spending should begin to affect the economy in the second half of the year."}],[{"start":262.05000000000007,"text":"“We continue to be focused on inflation, and we think that’s actually our best contribution to a more durable long-term growth,” he said."}],[{"start":269.8500000000001,"text":"Data visualisation by Haohsiang Ko in Hong Kong"}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":280.3500000000001,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1790829393_5585.mp3"}