In Asia, PH ‘most vulnerable’ to severe El Niño–ANZ study

business / Agriculture Agriculture Heavy rice importer In Asia, PH ‘most vulnerable’ to severe El Niño–ANZ study By: Ian Nicolas P. Cigaral - Reporter / @IanCigaral Phiippine Daily Inquirer / 02:05 AM July 04, 2026 Share: Dry lands brought by El Niño in Barangay Gabawan, Daraga, Albay province. —MARK ALVIC ESPLANA MANILA, Philippines – The Philippines is among the Asian economies most vulnerable to a severe El Niño, largely because of its heavy reliance on imported rice and heightened exposure to regional supply disruptions, according to a report by ANZ Research.

In a note to clients, ANZ said the Philippines “appears the most vulnerable” in the region, as weak domestic agricultural production has left the country increasingly dependent on food imports, especially rice. READ: El Niño may cut PH rice output by 700,000 metric tons, says DA Article continues after this advertisement Other major economies are seen as better positioned to absorb the shock. ANZ said Thailand and Vietnam, both major rice exporters, benefit from sizable food trade surpluses that could cushion the effects of prolonged drought.

India’s record rice inventories and ample wheat stockpiles are expected to help stabilize domestic food supplies even if harvests are affected by extreme weather.FEATURED STORIES BUSINESS Diesel prices seen rising anew on July 7 BUSINESS Marcos reappoints Wassmer, Querubin to BSP Monetary Board BUSINESS Does new upper-middle income status reflect PH reality? Indonesia has built record rice reserves, giving policymakers greater flexibility to manage supply disruptions and contain food inflation.

Malaysia, meanwhile, faces a more complex set of risks, with potential disruptions to both rice supplies and palm oil production. In the Philippines, ANZ said food-price sensitivity remains high, while imported rice continues to account for a meaningful share of domestic consumption. “Although rice inventories are somewhat higher than a year ago, the improvement has been modest,” the bank said.

“This leaves the Philippines exposed to a combination of weaker domestic agricultural production, higher food import costs and tighter regional rice supply if weather-related disruptions emerge,” it added. Article continues after this advertisement The warning comes as the US National Oceanic and Atmospheric Administration’s Climate Prediction Center said El Niño conditions have emerged and are expected to intensify. The agency estimates a 63-percent chance that the weather pattern will become a very strong El Niño by late 2026 or early 2027, potentially ranking among the most powerful events recorded since 1950.

For Asia as a whole, ANZ said the greater economic risk lies in inflation rather than growth, as higher food prices could force central banks to keep monetary policy tighter for longer. Article continues after this advertisement In the Philippines, the Bangko Sentral ng Pilipinas stands ready to take the necessary steps to return inflation to its 3-percent target. Last month’s quarter-point rate increase pushed the policy interest rate to 4.

75 percent, extending cumulative hikes in the current tightening phase to 50 basis points. READ: DA braces for impact of looming El Niño on rice production Your subscription could not be saved. Please try again.

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“While the climate backdrop looks potentially more challenging than in 2023-2024, the eventual macro impact will depend not only on the severity of weather disruptions, but also on the buffers available to absorb the shock, including food inventories, trade positioning, policy preparedness and the importance of agriculture in each economy,” ANZ said. INQ READ NEXT In Asia, PH ‘most vulnerable’ to severe El Niño–ANZ study Megawide raises P4.5 billion from sale of stake in CREC EDITORS' PICK Typhoon outside PH may enter PAR by Wednesday — Pagasa Angara urges schools to maximize PTAs in promoting school safety BINI tapped as PH tourism ambassadors Not only drought but floods: What to expect from severe El Niño?

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