El Niño in H2 to worsen ME war impact on farms By Ada Pelonia
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US ATTACKS IRANIAN NUCLEAR SITE WHILE TEHRAN HITS OIL TANKER OFF DUBAI COAST
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HE looming El Niño in the second half of 2026 threatens to exacerbate the Middle East war’s impact on the global agriculture sector, according to BMI. BMI, a unit of Fitch Solutions, made the pronouncement after a recent forecast of the National Oceanic and Atmospheric Administration (NOAA) for the El NiñoSouthern Oscillation (ENSO). The NOAA expects El Niño to emerge with a 62-percent probability over June to August 2026
and persist until the end of the year. It also assigns a 33-percent likelihood of a “strong” El Niño to develop in the fourth quarter of 2026. “An El Niño occurring in H2 2026 would raise drought and flood risks in several major economies, with impacts varying depending on local conditions,” BMI said in its latest report. On average, the research firm said the last three El Niño events to occur in the reference period have “more than doubled” the share of cropland exposed to droughts in Colombia and Indonesia, while it “nearly doubled” in
Australia, Bangladesh, Peru, Thailand, Vietnam, and others. It added that El Niño also increases the risk to more droughtexposed cropland in markets such as Egypt, Spain, and South Africa. “Agriculture accounts for a substantial share of national income and employment in many of the affected markets, implying higher risks to economic growth in Q4 2026 and in 2027,” BMI said. Meanwhile, the research firm warned that further risks would rise under an El Niño scenario in the second half of 2026, as elevated input costs brought by the war could coincide with drought-and
flood-related output losses. “The US-Iran war is heightening agricultural price risks by introducing a cost shock that could overlap with weather-related production stress if El Niño materialises,” BMI said. It explained that disruption to transit through the Strait of Hormuz has placed pressure on fertilizer, fuel, and freight costs via higher war-risk premia, rerouting, and tighter delivery schedules. “If crop prices do not rise enough to offset these higher input and shipping costs, producer margins will be squeezed, raising See “ME war,” A2
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BSP EXPECTS INFLATION TO HIT 3.1-3.9% IN MARCH www.businessmirror.com.ph
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Wednesday, April 1, 2026 Vol. 21 No. 171
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PETRON STAKE SALE TO GOVT ‘CREDIT POSITIVE’ –CREDITSIGHTS
By Andrea E. San Juan
IGNIFICANT increases in domestic fuel prices, higher rice prices and electricity charges, alongside the weakening of the peso, likely quickened the country’s headline inflation in March, according to the Bangko Sentral ng Pilipinas (BSP).
In a statement on Tuesday, the BSP said it projects March 2026 inflation to be within the range of 3.1 to 3.9 percent. According to the central bank, inflation risks have “intensified” with upward price pressures stemming from the significant increase in domestic petroleum prices, higher rice prices, increased electricity charges in Meralco-serviced areas, and depreciation of the peso. However, it noted that the anticipated lower prices of vegetables, fish, and meat may help temper inflation. “But upside pressures continue to warrant close monitoring,” the central bank emphasized. As such, the BSP pointed out it will remain vigilant and guided by incoming data, specifically on inflation and growth prospects. “We will continue to monitor recent developments in the Middle East for their implications on inflation and economic activity,” the central bank also noted. In February 2026, inflation quickened to 2.4 percent, the highest in 13 months. In March 2025, the country’s headline inflation was at 1.8 percent. Even after a month since the onset of the Middle East conflict which led to higher oil prices, this inflation forecast range of BSP settles within its 2 to 4 percent target band for the year. At the off-cycle monetary policy meeting held on March 26, the central bank kept its key policy
rate steady, with BSP Governor Eli M. Remolona Jr. saying a rate hike would delay economic recovery. In the meantime, BSP said monetary policy will zoom in on addressing second-round effects that may arise. (See: https://businessmirror.com.ph/2026/03/31/experts-tracking-oil-shocks-passthrough/) “The Monetary Board will act as needed in pursuit of the BSP’s primary mandate to maintain price stability,” the BSP said in an earlier statement.
‘KALBARYO’ TAKES SHAPE
A resident of Makati City adds the finishing touches to a tarpaulin depicting the Agony in the Garden, one of the life-size biblical scenes featured in The Kalbaryo in Poblacion. The annual Holy Week tradition vividly recreates the journey of Jesus Christ to Calvary, drawing the faithful and visitors alike into a reflective experience of His passion and sacrifice. The Agony in the Garden, which took place immediately after the Last Supper, marks a pivotal moment of prayer and surrender before Christ’s arrest. NONIE REYES
By Andrea E. San Juan
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HE potential stake sale in Petron to the government is “modestly credit positive” in the longer-term as the Philippine government has higher likelihood of financial support for operations and debt repayment if needed, and has stronger access to diverse bank financing, among others, according to financial research firm CreditSights, a FitchSolutions Company. “It is worth noting that this is not the first time Mr. Ramon Ang has raised the possibility of selling Petron back to the Philippine government, with a similar proposal having been floated in 2021, likewise during a period of elevated oil prices and heightened sensitivity around fuel affordability,” CreditSights said. The financial research firm thinks that such discussions resurfacing during high oil price environment may reflect his intention to reduce the possibility of price caps being imposed on Petron, as there have been protests by transport workers and comments by lawmakers that the deregulated oil price structure in the Philippines was allowing oil companies to benefit over ordinary citizens, rather than indicating any near‑term expectation of a change in ownership. “That said, should the proposed sale indeed go through, we view a potential stake sale in Petron to the government as modestly credit-positive in the longer-term,” CreditSights said. CreditSights said with the
Peso hits new all-time low
MEANWHILE, the depreciation of the peso was also cited as one of the factors that could have led to faster inflation in March. Data from the Bankers’ Association of the Philippines (BAP) showed the Philippine peso hit a new record low of P60.748 against the dollar on Tuesday, 5 centavos weaker than its previous finish of P60.69 on Monday. Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co., said volatile oil prices and “sustained” dollar demand weighed on the local currency as Middle East risks linger. As such, he said: “Expect range‑bound trading at 60.60060.900 levels, as uncertainty around energy persists.” When asked if the current level of the local currency is already contributing significantly to inflation and if this would warrant intervention See “Inflation,” A2
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Poorest Pinoys to be hit hardest by oil shock at dinner table: PIDS By Justine Xyrah Garcia
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HE poorest Filipinos could be hit hardest by the global oil shock, not at the pump but at the dinner table, as higher fuel costs ripple through food prices. A policy note by Adoracion M. Navarro, a senior research fellow at the Philippine Institute for Development Studies (PIDS), stated the
impact of rising oil prices goes beyond transport and electricity. It warned that second-round effects on food costs could further squeeze household budgets, especially among low-income groups. While fuel inflation is the initial shock, PIDS said the bigger risk lies in how higher transport and production costs feed into food prices, which carry a heavier weight in household spending.
Data from the 2021 Family Income and Expenditure Survey of the Philippine Statistics Authority (PSA) showed that the poorest decile spends 64.1 percent of its budget on food. In contrast, the richest decile allocates only 30.9 percent. This means any increase in food prices is “inherently regressive,” the report said. “The poorest households, with their high food expenditure shares
and limited income flexibility, bear the brunt of second-round inflation effects. In contrast, higherincome households are relatively insulated,” it also said. PIDS explained that higher fuel prices raise transport and production costs, which then push food prices up and squeeze incomes, quickly pushing vulnerable households closer to the poverty threshold as wages adjust slowly.
The state think tank urged policymakers to look beyond aggregate indicators such as GDP growth, inflation, and the current account, warning that these may “obscure the unequal burden” of the shock. Instead, it called for targeted measures, including direct income or consumption support for poorer households, subsidies for vulnerable sectors, protection of real wages, and efforts to stabilize food
supply. “Ultimately, the central policy problem is not pump prices per se and how to subsidize oil consumption through universal fiscal absorption of the price shock (which benefits higher-income groups more than the poor). The central policy problem is how to address distributional asymmetry to mitigate the socioeconomic impacts of the crisis,” it said.
PESO EXCHANGE RATES n US 59.4400 n JAPAN 0.3747 n UK 79.5664 n HK 7.6232 n CHINA 8.5304 n SINGAPORE 46.1562 n AUSTRALIA 39.8129 n EU 69.0098 n KOREA 0.0404 n SAUDI ARABIA 15.8507 Source: BSP (March 16, 2026)