La Niña expected to induce inflation

·2 min read
A resident removes his fishing gear from an overflowing river due to heavy rains brought about by tropical storm Florita (Ma-on) and exacerbated by the La Niña phenomenon in Ilagan City, Isabela.
A resident removes his fishing gear from the overflowing Pinacanuan river due to heavy rains brought about by tropical storm Florita (Ma-on) in Ilagan City, Isabela province on August 23, 2022. The La Niña climate phenomenon that brings a lot of rainfall is expected to aggravate inflation woes due to its effect on agricultural products. (Photo by VILLAMOR VISAYA/AFP via Getty Images)

La Niña, a climate phenomenon wherein the Philippines experiences a lot of rainfall, is expected to aggravate inflation woes due to its effect on agricultural products.

This came after the Climate Prediction Center (CPC) found that “Overall, the coupled ocean-atmosphere system remained consistent with an ongoing La Niña.”

They added, “La Niña is expected to continue, with chances for La Niña gradually decreasing from 86 percent in the coming season [September to November 2022] to 60 percent during December-February 2022-2023.”

The increased amount of rainfall is known to damage crops due to continuous rainfall in rural areas, causing the prices of agricultural produce to go up. This is on top of the 20 typhoons normally experienced by the country on average.

A few days ago, Tropical Storm Florita made its landfall in the Philippine Area of Responsibility, which the Department of Agriculture (DA) reported which did P19.1 billion in damages for the agricultural sector – more than six times larger than what the agency initially reported. In the Ilocos region alone, the damages were at P26.53 million.

In terms of quantity, there was a loss of 1,132 metric tons (MT). However, the DA assured the public that the marketing of agricultural products is not a problem, saying that “there are no changes in the volume traded at the centers in La Trinidad. Supply and prices of basic commodities remain stable in regions affected by ‘Florita.'”

There were also damages to irrigation worth P22.7 million in the Ilocos and Cordillera regions, which will surely affect production in the future. The earthquake's effect on crops, livestock, and farm-to-market roads prompted the Cordillera DA to request for P148 million for the purchase of seeds, fertilizer vouchers, and financial assistance.

Earlier this month, the Philippine Statistics Authority (PSA) announced that July 2022’s headline inflation is 6.4 percent, the highest since October 2018. Additionally on Tuesday (August 23), digital analytics group Kantar mentioned that roughly a third of Filipino income was spent on food, wherein it peaked at 37 percent during the onslaught of the pandemic.

The Department of Trade and Industry (DTI) also approved an increase of Suggested Retail Price (SRP) for sardines and noodles, amid public clamor to control inflation.

UPDATE: Additional information added in seventh paragraph.

Mark Ernest Famatigan is a news writer who focuses on Philippine politics. He is an advocate for press freedom and regularly follows developments in the Philippine economy. The views expressed are his own.

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