‘Philippines among most vulnerable to surge in global food prices’

MANILA, Philippines — The Philippines is among the economies most vulnerable to a possible surge in global food prices, as elevated energy and fertilizer costs, coupled with the risk of a severe El Niño, threaten to deepen inflation pressures and constrain policy responses.

In a special report, Nomura Global Markets Research ranked the Philippines 21st out of 110 countries in its updated Food Vulnerability Index, which measures exposure to large food price increases based on income levels, the share of food in household spending and dependence on net food imports.

The Philippines posted an index score of 100.7, placing it among the 50 economies most exposed to a sustained food price shock. Nomura said this group includes several large and populous markets such as Bangladesh, Nigeria, Egypt, Vietnam, India, China and the Philippines.

Based on Nomura’s index, the Philippines had a 2025 gross domestic product per capita of $4,270, while food accounted for 37.3 percent of household expenditures in 2023. The country’s net food imports were equivalent to 2.7 percent of GDP in 2024.

“The most vulnerable countries are more likely to encounter large negative economic effects from a sustained rise in food prices, including rising inflation, widening fiscal and trade deficits, slowing GDP growth and possible sovereign credit rating downgrades,” Nomura said.

The Philippines was also included in Nomura’s heat map of vulnerable economies that could face tighter policy space if food prices rise sharply.

Nomura warned that many food-vulnerable economies are entering a potential shock with already strained macroeconomic conditions. It said policy choices could narrow quickly if weaker fundamentals trigger capital flight and currency depreciation, forcing central banks to tap foreign exchange reserves or raise interest rates even as growth softens.

The report comes as the Middle East conflict and the closure of the Strait of Hormuz have already jolted global commodity markets, causing what Nomura described as the largest oil supply loss on record. While the impact on food markets has so far been more limited than on energy, Nomura said the risk of a broader food shock could increase later this year.

Nomura identified three key triggers for a potential food price surge, namely higher oil prices, rising fertilizer costs and El Niño. It said the link between crude and food prices tends to strengthen when oil breaches $80 per barrel, as modern food production relies heavily on fuel-intensive machinery, irrigation, transport and cold storage.

Fertilizer prices are another concern. Nomura said the closure of the Strait of Hormuz has disrupted supplies of urea and diammonium phosphate, two widely used fertilizer products, with about one-fifth of global exports originating from Persian Gulf countries.

The report also flagged growing odds of El Niño. It cited the US National Oceanic and Atmospheric Administration, which assigned an 87-percent probability of El Niño in the third quarter and 93 percent in the fourth quarter. There is also a 50-percent chance that a strong to very strong El Niño develops by year-end.

Of the 50 most vulnerable economies in Nomura’s index, 48 are developing countries with a combined population of 4.7 billion, or about 58 percent of the global population.

By contrast, eight of the 10 least vulnerable countries are advanced economies, led by New Zealand, Ecuador, Ireland, the Netherlands and Luxembourg.