AS the Philippines, a rice-dependent economy, braces for the impact of ‘Godzilla’ El Niño, it should prioritize pouring investments into climate change adaptation rather than pooling funds and resources for Artificial Intelligence (AI), according to the central bank governor.
In his speech at the 2026 Green Swan Conference, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. pointed out that climate risk is no longer just a ‘scenario’ in a model.
‘It’s now a reality we live with,’ Remolona asserted. He explained that what begins as a climate event can ‘quickly’ become an inflation problem, a financial stability concern, and a threat to sustained growth.
As such, he pointed out the need to put in place ‘resilient infrastructure, insurance that absorbs losses, and financing that supports adaptation.’
In the Philippines, the BSP governor said the past two months alone saw ‘unusual successive’ tropical cyclones.
‘The southwest monsoon caused massive damage to our farms and roads,’ Remolona said.
‘And we are now preparing for the opposite shock: what we call the ‘Godzilla’ El Niño with the risk of severe drought,’ he also noted.
With this, the central bank chief said: ‘Our task goes beyond measuring exposures. We need to prepare for the worst.’
Crowded out by AI
‘Sadly, at the very time when we need to make massive investments in adaptation, such investments are being crowded out by investments in AI [artificial intelligence] and investments in data centers,’ Remolona emphasized.
Remolona recently admitted that El Niño is the biggest inflation risk that the Philippine economy faces at the moment.
‘The scenario that we care about the most is El Niño. There’s a regular El Niño, a kind of benign El Niño which is bad news. But there’s a bad El Niño which is really, really bad news,’ Remolona said at a recent forum.