MANILA -- Food prices could spike because of the Taal Volcano eruption, which affected one of the country's top sources of chicken and hogs, Philippine National Bank said in a research note Wednesday.
The Calabarzon region, south of Manila, is the country's second largest producer of both live chickens and hogs, PNB said.
Coupled with a strong typhoon at the close of 2019, the volcanic eruption could "take its toll on inflation rather than on domestic demand that could undermine GDP prospects," PNB said.
However, food price shocks due to natural disasters usually don't last once imports are brought in and businesses normalize operations, it said.
"Significant" government and private sector spending on rebuilding and recovery will help compensate for the downside risks, the bank said.
"Post-disaster, domestic demand prospects in the affected regions can easily recover with a strong fiscal response," it said.