PAGASA says a strong to very strong El Niño is present. The central bank has put it in its 2027 outlook. September inflation is 7.2%. Which of those is weather risk, and which is already in prices.
Two things happened in the Philippines within six weeks, and they are easy to run together. On 27 August the central bank raised its 2027 inflation forecast and named El Niño as one reason. On 6 October the statistics office reported September inflation at 7.2%. The first is a forecast about weather risk. The second is a measurement of prices, and the release does not say what caused it.
That distinction is the whole piece. Current inflation is not automatically El Niño damage, and a policy forecast is not a record of it either. What the evidence supports is that the weather risk is now large enough to sit in the central bank’s outlook, and that today’s prices already carry a lot that has nothing to do with weather.
PAGASA’s El Niño update dated 7 October says a strong to very strong El Niño is present in the tropical Pacific, may reach its peak before the end of 2026, and is expected to continue into the first half of 2027. It says below-normal rainfall is more likely and warns of dry spells and droughts in some areas. It also says rain from tropical cyclones and other systems can still push totals above normal, which is the same odds language we use for the Atlantic. We read that update on PAGASA’s agricultural weather page, which shows the 7 October date but no advisory number.
That is a shift in odds, not a forecast for any month or province. PAGASA’s July advisory had already expected a very strong event by October to December, and counted 10 provinces in meteorological drought and 21 in dry spells for June. We did not find a newer province count.
On 27 August the Bangko Sentral ng Pilipinas raised its policy rate to 5.00% from 4.75%, lowered its 2026 inflation forecast to 6.1% from 6.4%, and raised its 2027 forecast to 5.4% from 4.5%, with 3.3% for 2028. News reports of the meeting give two reasons for the 2027 revision: a possible severe El Niño affecting rice prices and food supply, and higher minimum wage increases. So the 2027 number is not an El Niño forecast alone. We read these figures in news coverage, because the BSP’s own site was not readable to us, and the revision is six weeks old, not new.
The table sets what is measured now against what is still a projection. Rice is the large one: the Philippines imports heavily, so output matters at the margin and import timing matters a lot. The Department of Agriculture kept imports open, in contrast to 2025, and Secretary Laurel said buffer stocks should cover El Niño effects through April 2027. The DA’s own projection of a palay loss of about 750,000 tonnes is a projection, not a harvest result.
| Channel | Measured now | Still a projection |
|---|---|---|
| Rice | Rice inflation 20.3% in September, 19.4% in August (PSA). Imports received about 4.3 million tonnes by 6 October, with 0.9 to 1.0 million more contracted (DA, via S&P Global). | USDA cut 2026/27 output to 12.25 from 12.36 million tonnes. DA projected a palay loss of about 750,000 tonnes before the early 2027 dry-season harvest. |
| Vegetables, fruit, fish | Vegetables, tubers and pulses +10.7% in September after −3.4% in August; fruit +8.7%; fish +7.4% (PSA). | Whether dry spells persist into the dry season. PAGASA warns of dry spells and droughts in some areas. |
| Water and irrigation | Angat fell to a record 150.91 m on 24 July, passed 190 m on 23 August and was reported at 208 m on 30 September. Minimum operating level is 180 m. | Dry-season irrigation. Reported October allocations are 20 cubic meters per second for irrigation and 44 for Metro Manila, set against a forecast, not an empty dam. |
| Fertilizer | Urea up 34% year on year to 2,290 pesos a bag on 2 October (S&P Global). Not a weather effect. | Planting decisions for the next crop. |
| Fuel and transport | Transport inflation 14.6%, housing and utilities 8.4% (PSA). Together they contributed 3.0 of the 7.2 points. | Oil and the peso, both cited in the BSP’s September range. Not El Niño. |
Water is the other channel, and so far it has recovered. Angat Dam hit a record low in July, then monsoon rains refilled it. The dam supplies more than 90% of Metro Manila’s drinking water and irrigation for Central Luzon rice. Our piece on the 44 cubic meter allocation covers why allocations were cut anyway. Fertilizer and fuel are also in the table because they are real price pressures that El Niño did not cause.
The statistics office put September inflation at 7.2%, with food and non-alcoholic beverages contributing 2.6 percentage points, housing and utilities 1.7 and transport 1.3. Those three groups account for 5.6 of the 7.2 points, about 78%. Food inflation was 6.8%, vegetables and pulses were up 10.7% after a 3.4% decline in August, and rice was 20.3%. The release attributes the acceleration to food, housing and utilities, and transport, and does not mention weather, oil or El Niño.
The central bank’s own September range of 6.4% to 7.4% pointed to weather-related price increases for vegetables, fish, rice and fruit, along with higher fuel prices and a weaker peso. That is a mix. Weather may have played a part in vegetables and fish, though the release does not say so. It is harder to pin on rice: rice inflation was already 17.1% in July, when PAGASA still described a weak to moderate El Niño, and the year-on-year comparison starts from September 2025, when headline inflation was 1.7% and the Agriculture Department says rice imports were suspended from September to December. We have not decomposed any of this, and neither has the statistics office.
The checkpoints below are the measurable ones. Rainfall and reservoir levels show whether the weather risk is arriving. Rice output and imports show whether supply can absorb it. Food inflation, read next to the transport and utilities contributions, shows whether prices are moving for weather reasons or for the reasons already in the table. The wider food picture is in our pieces on rice as the El Niño crop and convergent food stresses.
| Checkpoint | What to read | What would matter |
|---|---|---|
| Rainfall | PAGASA El Niño advisories and monthly assessments | Province counts of dry spells and drought rising from the 10 drought and 21 dry-spell provinces PAGASA reported for June |
| Reservoirs | PAGASA dam data for Angat and NWRB allocations | Angat falling toward 180 m before the rains return, or irrigation allocations staying at 20 cubic meters per second |
| Rice output and imports | PSA palay estimates, DA import totals | Output below the year before, or imports running above DA’s roughly 4 million tonne plan for 2027 |
| Food CPI | PSA releases for October, November and December | Food above the 6.8% of September, with vegetables staying above 10% |
| Central bank | BSP Monetary Board meetings expected in October and December | A change to the 5.4% forecast for 2027, or to the stated reasons for it |
We have not read the BSP’s own statement, PSA’s detailed tables, a newer PAGASA province count, an Angat reading after 30 September, or Philippine rice output estimates from PSA. The BSP’s October meeting date was not confirmed.