The Philippines is likely to be the Southeast Asian economy hardest hit by an emerging strong El Niño, with Bank of America (BofA) expecting inflation to average 6.7 percent this year, according to a Philstar Biz report.
The weather phenomenon is expected to bring drier conditions and disrupt agricultural production, which could push food prices higher and place additional pressure on the country's inflation outlook. BofA's projection of 6.7 percent would make the Philippines the highest-inflation economy among major ASEAN nations this year.
The bank's assessment underscores the country's exposure to climate-related supply shocks, which may complicate monetary policy decisions as authorities balance price stability with economic growth. The report highlights the need for government preparedness measures to mitigate the impact of the El Niño event on food security and overall inflation.