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, which the country's weather agency has described as a "Godzilla" event. El Niño typically brings below-normal rainfall to the Philippines, raising the risk of drought that can hit agricultural output and push food prices higher.

That matters for monetary policy because food makes up a large share of the Philippine consumer price basket. A supply-driven spike in food costs can feed headline inflation even as broader demand remains soft, complicating the central bank's task of setting interest rates.

For markets, the key variables to watch are rainfall and crop conditions, rice and food price data, and any government measures such as rice imports or price controls. The central bank's inflation forecasts and policy signals will show how much weight it gives to a weather-driven price shock versus underlying demand pressures.