Long-term solution to El Niño

(Part 1)

Once again, the Philippines — together with all the economies along the Pacific Rim — are faced with the threat of El Niño, the natural climate phenomenon that occurs when the surface waters of the central and eastern Pacific Ocean become unusually warm for an extended period. It is one phase of the broader El Niño-Southern Oscillation (ENSO) cycle, whose phases are La Niña (cooler-than-normal Pacific waters) and ENSO-neutral conditions. The typical effects of El Niño are:

• droughts in parts of Southeast Asia, Australia, and the Western Pacific;

• increased rainfall and flooding in parts of South America;

• hotter global temperatures; and,

• changes in tropical cyclone activity and agricultural production.

The latest forecast from the US National Oceanic and Atmospheric Administration (NOAA) indicates a very high likelihood that El Niño will develop this year. According to NOAA’s most recent outlook:

• there is an 82% probability of El Niño during May to July;

• a 92% probability during June to August;

• around a 96-98% probability of El Niño from later summer through the end of the year.

So, considering the current forecasts, El Niño is far more likely than not to develop and persist through much of the remainder of 2026 (as the world is already suffering economically from the US-Iran war), with probabilities exceeding 90% by mid-year.

Specifically for the Philippines, El Niño increases the risk of:

• below-normal rainfall;

• drought conditions in some agricultural areas with the consequent increase in food inflation that can be as high as 12% to 15%;

• water supply stress, especially in urban areas like Metro Manila, Metro Cebu, and Baguio City; and,

• higher temperatures and heat waves.

The exact impacts will depend on the strength and timing of the event and on local weather systems such as the southwest monsoon and tropical cyclones. For example, as I write this in late June, there are reports of flooding in some areas of Mindanao. The probability that El Niño will hit the Philippines during the second half of 2026 is 80% according to PAGASA (the Philippine Atmospheric, Geophysical and Astronomical Services Administration), and over 90% according to international forecasting centers.

Government agencies, farmers, business enterprises, and households should waste no time in preparing for possible impacts on water supply, agriculture, food prices, and energy demand for the rest of 2026 up to early 2027.

Because of this recurring weather phenomenon, it is imperative that the Philippines find long-term solutions to the water shortage problem that results from it. That is why it is providential that the search for alternative sources of energy is leading a good number of power companies to look at hydropower as a substitute to fossils-based electricity.

On May 29, there was the happy news that appeared in this publication that First Gen is making a long-term investment in pumped-storage hydropower assets which can become one of the most critical segments of the future energy system. First Gen operates the Pantabangan-Masiway complex and the Casecnan hydroelectric facility in Nueva Ecija. It is also preparing for the development of the 120-MW Aya Pumped Storage Project adjacent to the Pantabangan facility.

Also worth citing is the hydropower developer Repower Energy Development Corp. (REDC) that is growing its portfolio of hydropower plants. REDC is the hydropower arm of publicly listed Pure Energy Holdings, which has an interest in hydropower, bulk water and distribution, solar, and geothermal projects. This hydropower developer is currently developing the Piapi mini hydropower plant in Quezon province and the Pulanai mini hydropower plant in Bukidnon. Mini hydropower plants are an effective solution to at least four recurring problems in the islands of the Philippines: flooding, lack of water for irrigation, lack of water for human consumption, and a shortage of energy.

Let me revisit at this time — when we shall be facing another shortage of water for both human consumption and irrigation — what I have already discussed in the past about our teaming up with Spanish infrastructure companies to replicate what happened in Spain during the rule of General Francisco Franco (1939 to 1975), which I personally witnessed during a short stay in Spain after I finished by Ph.D. studies in the US in 1963 to 1964.

Under the authoritarian regime of Franco, Spain was often associated with large hydraulic works. There was, however, also the significant promotion of small- and medium-sized dams, reservoirs, and irrigation projects, especially from the 1940s through to the 1970s. These projects formed part of a broader policy known as obras hidraulicas (hydraulic works), inspired partly by earlier plans.

The objectives of the small- and medium-sized dams were: 1.) to irrigate farmland in dry regions; 2.) to supply water to rural communities; 3.) to support hydroelectric generation; 4.) to reduce vulnerability to drought and flooding; and, 5.) to encourage human settlement and agricultural development. Compared with major dams such as those on the Ebro or Tagus rivers, smaller projects flooded less land; required fewer relocations of villages; cost less to build; saw quicker completion; and served specific local and agricultural areas, in Andalusia, Aragon, Castille and Leon, Extremadura, Murcia, and Valencia. These are the regions which suffer periodic droughts and which benefited from irrigation expansion. In fact, Valencia oranges are well known to us Filipinos.

A distinctive feature of Franco’s water development policy was the creation of new agricultural villages by the Instituto Nacional de Colonizacion. Many of these villages were linked to small reservoirs, canals, and irrigation schemes rather than giant dams. Examples were Vegaviana, Esquivel, and Gevora. The cited benefits were increased agricultural output; greater food self-sufficiency and security; reduced rural poverty; a contribution to Spain’s rapid economic growth during the 1960s which I personally witnessed during my temporary residence in the Catalunya region in the early 1960s.

There were, however, some critics who said that even smaller projects altered ecosystems and changed traditional farming patterns, though their impacts were generally much less severe than those of the larger reservoirs in the country.

As I have recommended in previous columns, it would be desirable for our economic managers to continue discussions with the Spanish Government on how any development assistance they have available for the Philippines could be partly channeled to help us replicate their success in building hundreds of mini dams to address their water shortage problems as well as seasonal flooding (e.g., the recent one in Valencia that killed some people). Not to mention their contribution to the irrigation of the farms that produce some of the high-value agricultural exports of Spain, such as grapes and wine, olives and olive oil, kiwi fruits, and oranges and orange juice, among others. It is also providential that some of the largest Spanish infrastructure companies like Acciona are already very active in the Philippines.

(To be continued.)

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia