Arabic version: الفلبين تستعد لمخاطر تضخم «إل نينيو غودزيلا»

According to Cnbc, the Bangko Sentral ng Pilipinas is preparing for a possible “Godzilla” El Niño alongside a prolonged oil shock as it seeks to contain inflation that has reached a three-year high. Governor Eli Remolona said the central bank uses policy scenarios that account for oil prices and both ordinary and severe El Niño conditions.

Speaking Wednesday on a panel at the IMF and World Bank annual meetings in Bangkok, Remolona described the difference between the two weather cases. “We have the regular, ordinary El Niño, which is bad, and then we have the Godzilla El Niño, which is really, really bad,” he said. He said the central bank expects the worst effects on prices from November through February and that price stability remains its priority.

Philippine inflation accelerated to 7.2% in September from 6.1% in August, while rice prices rose 18%, according to the Philippine Statistics Authority. As the world’s biggest rice importer, the country faces food-supply risks if drought constrains domestic output. Agriculture Secretary Francisco Tiu Laurel has warned that a fresh drought could tighten supply.

Higher Philippine rice purchases could add demand to a global market already affected by El Niño and export curbs. The UN Food and Agriculture Organization’s rice price index has risen for six consecutive months to a 20-month high. The central bank raised its benchmark rate by 25 basis points to 5% in August. HSBC Bank senior ASEAN economist Aris Dacanay said in a Wednesday note that the BSP should raise the rate by another quarter percentage point next week to 5.25%, followed by a similar increase in December. “We’re holding our breath,” Remolona said, “but we have to be prepared for the worst.”