‘Strong’ El Niño to ravage farms, imperil food By Ada Pelonia @adapelonia
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“STRONG” El Niño occurring this year could ravage farmlands, shrinking harvests and disrupting the country’s food supply, the Department of Agriculture (DA) said. While the country cannot entirely stave off such losses, Agriculture Secretary Francisco Tiu Laurel Jr. said this could be minimized through various strategies. This includes shifting to less water-dependent crops such as munggo in drought-prone areas, using solar-powered irrigation, adopting
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THAILAND’S THAKSIN RELEASED FROM PRISON AFTER SERVING 8 MONTHS FOR ABUSE OF POWER
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low-cost greenhouses, and implementing earlier planting schedules. Such measures form part of the DA’s intensified efforts to prepare local farmers and consumers for a potentially strong dry spell event. The DA said a severe El Niño could slash farm production by 20 to 30 percent, citing recent studies. “What we learned during the 2024 El Niño will guide how we prepare and intervene this time around,” Tiu Laurel said. Ongoing interventions under the National Rice Program (NRP) and the Rice Competitiveness Enhancement Fund (RCEF) are also being strengthened to cushion the
impact of El Niño on rice production and farmer incomes. These include the provision of high-quality and climate-resilient seeds, fertilizer assistance, farm mechanization, irrigation support, water-saving technologies, credit assistance, and intensified extension and farmer training services. The DA said it is also enhancing preparedness measures through irrigation system assessments, climate risk mapping, localized planning, and the prepositioning of drought-tolerant seeds, fertilizers, and irrigation support. It added that existing assistance, such as crop insurance, credit ac-
cess, and market facilitation, is also being reinforced, while the El Niño Task Force is being reactivated to improve interagency coordination and response readiness. As part of preparations for the potential impact of the dry spell, the Philippines and Vietnam recently agreed that the former could purchase up to 1.5 million metric tons (MMT) of rice from the latter at competitive prices, if deemed necessary. Tiu Laurel, however, stressed that actual import volumes will depend on both market prices and domestic production. See “El NiÑo,” A2
BusinessMirror A broader look at today’s business
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2-MO FDI NET INFLOWS DOWN 34.8% TO $1.03B www.businessmirror.com.ph
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Tuesday, May 12, 2026 Vol. 21 No. 210
P25.00 nationwide | 2 sections 26 pages | 7 DAYS A WEEK
By Andrea E. San Juan
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@andreasanjuan
ASTER inflation and weaker economic expansion, coupled with global uncertainties, could delay long-term investments into the Philippines as these economic challenges tend to raise operating costs and weaken profit expectations, analysts pointed out. Ruben Carlo Asuncion, chief economist of the Union Bank of the Philippines (UBP) told the BusinessMirror on Monday: “Faster inflation and slower GDP growth are both unfavorable for FDI, as they simultaneously raise costs and dampen expected returns, creating a less attractive investment climate.” Asuncion explained that higher inflation increases uncertainty over input costs and may delay monetary easing while slower growth reduces the size and “dynamism” of the domestic market that foreign investors target. “In this context—compounded by global uncertainties including geopolitical tensions—FDI inflows are likely to remain subdued in the near term, with downside risks dominating in the first half of 2026,” added the UBP chief economist. Analysts explained their outlook on the foreign direct investments (FDI) after latest data from the Bangko Sentral ng Pilipinas (BSP) showed FDI net inflows contracted by 34.8 percent to $1.03 billion in the first two months of 2026 from the $1.58 billion posted in the January to February period a year ago.
SENATE SHIFTS, BATO DROPS IN Senate President Vicente “Tito” Sotto III was unseated on Monday, May 11, after senators moved to declare all leadership posts vacant through a motion of Sen. Joel Villanueva, paving the way for Senate Minority Leader Alan Peter Cayetano to be elected as the new Senate President following a shift in plenary voting; the leadership shake-up came amid rising tensions over looming impeachment proceedings involving Vice President Sara Duterte, with Sen. Ronald “Bato” dela Rosa’s return helping bolster the bloc behind the change. Stories on Second Front page A18, “House votes to impeach VP Sara Duterte, 257-26-9” and “Coup rocks Senate, as ‘Bato’ surfaces anew, gets chased.” ROY DOMINGO
MOODY’S ANALYTICS: PRICE SHOCKS HIT GROWTH ENGINE By Bless Aubrey Ogerio
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@blessogerio
ONSUMER spending is beginning to lose momentum, raising concerns that one of the Philippines’s growth cushions may be weakening, according to Moody’s Analytics. In its latest Asia-Pacific economic outlook, Moody’s Analytics said the Philippines is becoming more vulnerable to external and geopolitical pressures as domestic demand increasingly struggles to offset slowing global growth and rising inflation. The think tank described the country’s latest economic fig-
ures as “underwhelming,” after the Philippine economy expanded by just 2.8 percent in the first quarter of 2026, based on data from the Philippine Statistics Authority (PSA). The figure marked the slowest pace of growth in five years, or since the 3.8-percent contraction recorded in the first quarter of 2021 at the height of the pandemic. Private consumption, long considered the backbone of the Philippine economy, also lost steam, growing by only 3 percent during the quarter, likewise the weakest pace in five years. “Spillovers from the Middle See “Growth,” A2
See “FDI,” A2
‘Pinoys’ spending habits to change’
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ILIPINO consumers are expected to become more selective with spending through 2026 as inflation, debt burdens and global uncertainty continue to pressure household budgets, according to BMI, a unit of Fitch Solutions. In a recent outlook, BMI said consumers are likely to remain cautious in their spending habits, prioritizing essential goods and services while pulling back on discretionary purchases and big-ticket items. “Heightened geopolitical uncertainty tends to reduce consumers’ willingness to spend on non-essential and big-ticket items, as households increase savings and delay purchases,” BMI said. “Even if labor markets remain relatively stable, persistent war-related headlines and volatility can materially depress sentiment, leading to softer demand across retail, travel and durable goods,” it added. BMI said the consumer sector is facing mounting challenges amid an uncertain macroeconomic environment marked by stubborn inflation, geopolitical tensions, global trade barriers and the risk of softer labor market conditions. While some recovery in disposable incomes
is expected in several economies, the firm noted that many households remain financially strained compared to conditions before the global inflation surge. “This economic pressure is driving increasingly defensive spending strategies, with consumers prioritizing essential goods and services while postponing discretionary purchases,” BMI said. For the Philippines, BMI maintained what it described as a “cautious but positive” outlook for consumer spending, although growth is expected to slow slightly next year. The firm projects real household spending growth to ease to 4.4 percent in 2026 from 4.6 percent in 2025, reflecting softer consumption amid rising price pressures and elevated debt servicing costs. In real terms, household spending is still expected to reach P14.1 trillion in 2026, or 26.1 percent higher than 2019 levels. BMI said a relatively tight labor market and the return of positive real wage growth could help support purchasing power and prevent a sharper slowdown in spending. However, inflationary pressures are expected
to remain a major drag on consumption, particularly as higher oil prices continue to feed into transport and energy costs. “With oil prices staying elevated for longer under our Country Risk team’s prolonged USIran conflict scenario, this will further raise the Philippines’ import bill and higher domestic pump prices,” BMI said. “This then erodes household purchasing power, weighing on domestic consumption,” it added. The firm also noted that high household debt levels and related debt servicing costs continue to limit consumers’ financial flexibility. Despite these pressures, BMI said the central bank still has sufficient reserves to manage currency volatility and prevent sharper peso depreciation. Over the medium-term, however, BMI said improving economic conditions could eventually support stronger consumer activity and provide momentum for the retail sector. “The improving outlook over the medium term means that consumers will expand spending, leading to growth in consumer spending and providing tailwinds to the growth of the Philippine retail sector over 2026,” BMI said. Bless Aubrey Ogerio
PESO EXCHANGE RATES n US 60.5430 n JAPAN 0.3863 n UK 82.1629 n HK 7.7339 n CHINA 8.9027 n SINGAPORE 47.7619 n AUSTRALIA 43.6939 n EU 71.2167 n KOREA 0.0414 n SAUDI ARABIA 16.1396 Source: BSP (May 11, 2026) TEAM GENERAL CLASSIFICATION TOP 3
STAGE 12 May 11, 2026 (Monday)
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