Philippines’ central bank braces for ‘Godzilla’ El Niño - Financial Times

The Philippine central bank is preparing for the economic effects of a strong El Niño weather pattern, described in the Financial Times report as "Godzilla" in scale. El Niño typically brings below-normal rainfall to parts of the Philippines, which can weigh on agricultural output, particularly rice and other staple crops.

For markets, the key channel is inflation. Reduced harvests can push up food prices, and food carries a large weight in the Philippine consumer price basket. That matters for monetary policy: a sustained food-price shock could complicate the central bank's efforts to manage inflation while supporting growth. The currency and government bonds are also sensitive to shifting rate expectations.

What to watch: the severity and duration of the dry spell, rice supply and import decisions, and the central bank's inflation forecasts and policy statements. The situation is a reminder that weather is a real macroeconomic variable in the region, not just a seasonal footnote.