Combination Of El Niño And Inflation Is 'Dangerous': NEDA

The upcoming El Niño phenomenon combined with inflation may push more people to poverty, the National Economic and Development Authority (NEDA) warned.

"What we want to ensure is that we can mitigate the negative effects of El Niño. We can start planning and putting the necessary adjustments now to reduce the negative effects, while at the same time, already making arrangements for the necessary support for those who are most exposed, particularly the vulnerable groups," NEDA chief Arsenio Balisacan said in this report.

The NEDA official said the government is working to assure the protection of vulnerable sectors from the impact of El Niño which is expected towards the latter part of the year and will likely result in decreased agricultural production.

"We (should) prevent people from falling into poverty, (because) once they fall, it's really difficult for them to go up. We don't want that. So that's why with the inflation, elevated inflation that you have now, if you are unable to reduce inflation and then you get this El Niño phenomenon, that is a dangerous combination. And we want to prevent that from happening," Balisacan pointed out.

The country's overall inflation rate is now on a downward trend since March, the Philippine Statistics Authority (PSA) earlier reported.

According to the PSA, the country's inflation rate went down from 8.6% in February to 7.6% in March which is 4% lower than analysts' forecasts. The downward trend is mainly due to the lower inflation rate of food and transportation costs, NEDA said.

"We're really monitoring the situation and implementing the necessary measures to ensure that by the end of the year, we should be in our target of roughly around 3.5 to four percent. So we are on a downward trajectory already," Balisacan explained.

Last month, President Ferdinand Marcos, Jr. approved the creation of the Inter-agency Committee on Inflation and Market Outlook (IAC-IMO) to fight inflation. The IAC-IMO serves as an advisory body to the Economic Development Group that will recommend measures to keep inflation, particularly on food and energy, within the target range set by the government.