The ongoing El Niño will have little effect on the country's economic growth and uptick in the prices of goods and services, the National Economic Development Authority said on Friday.
Socioeconomic Planning Secretary and NEDA chief Ernesto Pernia said the agriculture sector would be most affected by drought. However, its contribution to the gross domestic product (GDP) was relatively small.
"Given that the contribution of agriculture sector to GDP is 8 to 9 percent, the impact would be proportionate to the percentage contribution," Pernia said at news briefing in Pasig City.
NEDA Assistant Secretary for Planning and Policy Carlos Bernardo Abad Santos said initial estimates showed that El Niño would slash a mere 0.2 percentage points from the country's full-year GDP.
The NEDA official added that the weather phenomenon had already been considered in the revised 6 to 7 percent GDP target for 2019.
The -0.2 percentage points reduction on GDP brought by El Niño could also be lower as the government will employ mitigating measures to address the adverse impact of the phenomenon, Abad Santos said.
Pernia is optimistic that inflation rate will settle within the target range of 2 to 4 percent this year despite the droughts, dry spell, and reduced rainfall brought by El Niño.
"Maybe there is some impact on inflation but it will still be below 4 percent," the NEDA chief said.
Abad Santos, for his part, said the implementation of the Rice Tariffication Law would mitigate the inflationary impact of the weather phenomenon.
The law is expected to result in imported rice flooding the Philippine market.
"If the pathway or if the impact is on the price of rice then if you do importation then walang impact," Abad Santos said.
NEDA Undersecretary Adoracion Navarro presented the "holistic" and proactive approaches the government would employ to mitigate the impacts of El Niño.
Government agencies involved such as the Department of Agriculture, National Disaster Risk Reduction and Management Council, and National Irrigation Administration, among other should focus on the five critical areas identified in the Roadmap for Addressing the Impacts of El Niño (RAIN) framework namely food security, water security, energy security, health, and safety.
“We cannot stop El Niño but we can make swift and effective moves to soften its impact on the lives of our countrymen and the economy,” Pernia said.
The DA recently reported that as of March 18, damage to the agriculture has reached P1.33 billion affecting 70,353 hectares and a total 84,932 farmers all over the country.
Meanwhile, the National Disaster Risk Reduction and Management Council has approved the full reactivation of the El Niño Task Force in August 2018, and is now waiting for a Memorandum Order from the Office of the President.
“NEDA is ready to take a lead role in mitigating the effects of El Niño. We will also review and improve the RAIN to better suit the country’s current conditions,” Pernia said.
As an interim measure, NEDA is proposing to transform the National Water Resource Board into the National Water Management Council to strengthen the board and provide it with additional manpower and financial resources.
“There is a need for an apex body that will oversee the overall planning, programming, and policy formulation based on sound data. We should also cite the gaps in water services that remain despite the abundance of the resource and programs and projects for the sector,” the NEDA chief said.
He also emphasized that the long-term solution is to push for the creation of the Department of Water Resources that will ensure the sufficient allocation of water resources across sectors. —NB, GMA News