PRESS RELEASE

Finance Secretary Ralph G. Recto has assured the public that the government is intensifying targeted actions to further protect the purchasing power of Filipinos from the effects of El Niño and La Niña on food and energy supplies.

“The Inter-Agency Committee on Inflation and Market Outlook is all hands on deck in monitoring weather-related disturbances as well as other external factors and their effects on the prices of essential goods to protect Filipinos’ purchasing power. Mitigating the effects of inflation, especially on our vulnerable sectors, is our top priority,” the Finance Chief said.

El Niño is characterized by abnormally dry and hot weather that brings drought or dry season, while La Niña is associated with above-normal rainfall that results in flooding. 

These abnormal weather patterns, exacerbated by climate change, can adversely impact agricultural production and society as a whole.

Droughts during El Niño reduce crop yields and increase the cost of electricity while excessive rainfall brought about by La Niña can lead to the overflowing of dams and flooding that damage crops and infrastructure.

The Philippine Atmospheric, Geophysical, and Astronomical Services Administration (PAGASA) reported that the El Niño weather started in January and is expected to settle down between April and June 2024. Meanwhile, there is a 55% probability of La Niña emerging by June to August 2024.

Despite the ongoing onslaught of El Niño in March, the government managed to keep the inflation rate to 3.7%, within the target band of 2% to 4%, due to vigorous implementation of measures that ensured sufficient imports of key commodities and improved agricultural production. 

The slight uptick in March was largely due to a higher rice inflation rate (24.4% in March from 23.7% in February) as El Niño affected rice-producing countries in Southeast Asia and export limits in India drove international rice prices higher.

Nevertheless, the food inflation rate was tempered by the slower price increases of eggs and other dairy products (2.3% from 3.5%), fruits (7.9% from 8.7%), bread and other cereals (4.6% from 5.1%), and ready-made food products (4.3% from 4.6%).

A decline in prices was also recorded for fish (-0.9% from 0.7%), vegetables (-2.5% from -11.0%), and sugar (-2.9% from -2.4%).

Non-food inflation, on the other hand, remained steady at 2.4% in March. While there was a slight increase in the prices of transportation, restaurants and accommodation, health, and recreation, this was offset by the continued deceleration of prices of electricity, gas, and other fuels. 

Government’s Intensified Actions to Combat the Effects of Weather-Related Challenges 

The Marcos, Jr. administration is accelerating its whole-of-government approach in implementing interventions to ensure food and energy security, clean water supply, public health safety, as well as targeted support to vulnerable sectors amid the strong El Niño and looming La Niña.

To boost agricultural production and help farmers affected by El Niño, the Department of Agriculture (DA) will continue to provide Fertilizer Discount Vouchers (FDVs).

The DA is likewise supporting the rehabilitation of irrigation systems, targeted cloud seeding operations, and the promotion of water-saving technology that rice farmers can apply to reduce their water use in irrigated fields.

Meanwhile, the government has provided farmers with a total of PHP 362.56 million worth of financial assistance through the Rice Farmers Financial Assistance (RFFA).

In addition, the Agricultural Credit Policy Council (ACPC) allotted PHP 500 million under the Survival and Recovery (SURE) Loan Program to assist 20,000 borrowers, including farmers and fisherfolk, who will be affected by calamities in 2024.

The National Irrigation Administration, for its part, is expanding the distribution of solar-powered irrigation systems to major rice-producing areas to provide stable irrigation, ensure sufficient water supply, and support farmers during the drought season. 

Programs ensuring sufficient water supply throughout the country amidst the El Niño season are also being undertaken by water regulatory bodies namely the Local Water Utilities Administration (LWUA), Metropolitan Waterworks and Sewerage System (MWSS), and the National Water Resources Board (NWRB).

To mitigate rising electricity prices, the government encourages distribution utilities to avail of the Anti-Bill Shock Program to protect end-users from a sudden increase in electricity rates by allowing electric cooperatives to implement rate adjustments on a staggered basis. 

In line with this, a Lifeline Rate Subsidy Program has also been implemented since January 2024 to ensure that the marginalized sector is protected from the burden of high electricity prices. Eligible consumers can receive a 100% discount on their monthly bills through this program.

“Rest assured, we are doubling down on our efforts to address the ongoing El Niño situation while actively preparing for the anticipated La Niña phenomenon in the latter part of the year,” Secretary Recto said.

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