Agri output likely contracted in 3Q
The DA expects agricultural output to have contracted in 3Q26 after expanding in 2Q26, with weakness potentially extending through 1Q27 as El Niño intensifies.
AB Capital Securities predicts agricultural output may have decreased in the third quarter of 2026 after growing in the second quarter, potentially affecting GDP growth through early 2027 due to El Niño intensifying. Heavy rains and flooding damaged recent production, while hotter, drier conditions are anticipated to worsen early next year.
Agriculture, forestry, and fishing contributed 7.5% to Q2 GDP, so a 3.0 percentage point decline in sector growth would diminish headline GDP growth by approximately 0.2 percentage points. The main concern is rising food inflation into early 2027, with September food inflation already at 6.8%. El Niño could further tighten crop supplies.
The government plans to use irrigation, fertilizer, seed, and Kadiwa measures to aid farmers, along with adequate chicken and pork inventories. A persistent farm contraction could weaken economic recovery and maintain high food inflation, supporting a tight monetary policy stance. For equities, value-oriented staples and defensive recurring income stocks are recommended, with cautious selections in consumer discretionary sectors.
AB Capital Securities emphasizes that the information provided is based on reliable sources but is not guaranteed and should not be considered an offer or solicitation to buy or sell securities.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
