Economy sound despite diverse woes

Despite the still elevated commodity prices and the uptick in the number of jobless Filipinos, the overall economic situation remains positive, according to a private economist.

The onslaught of El Niño has had an adverse effect not only on rice but on all crops, Michael Ricafort, Rizal Commercial Banking Corporation’s (RCBC) chief economist, said.

In an interview on DAILY TRIBUNE’s Straight Talk digital show Wednesday, Ricafort said rice prices were a major contributor to the rise in inflation to 3.8 percent.

But Ricafort said the economic momentum remains even as it is saddled by the weather anomaly and geopolitical problems.

“Rice really stood out; it went up by 23.9 percent year on year in April compared to a year ago. Although in March it was at 24.4 percent, it is still the same. El Niño is still the reason for that. It is a similar situation in ASEAN because the heatwave is not only here, but also in neighboring countries. They also feel it,” he said.

As a result, the economist said, rice prices in the world market soared to a 15-year high.

“Although we already saw this similar episode in August of last year, there was also a drought in ASEAN countries, especially those rice-producing countries from which our country imports,” he said.

“Given the demand-supply balance, rice prices can go up as a result, and it’s not just rice. It may include other agricultural products that may have suffered in terms of reduced output or production due to a lack of rainfall,” Ricafort added.

The Philippine Atmospheric, Geophysical, and Astronomical Services Administration declared the onset of El Niño in June 2023.

In March, the weather bureau said the phenomenon was waning. However, it warned of its delayed impact that is expected to persist until May.

Moreover, the Department of Science and Technology said there is an increasing possibility of La Niña occurring in June which, according to Ricafort, will be another challenge to the country’s agriculture sector.

According to the RCBC executive, there’s a risk of livelihoods being affected during the typhoon season, especially in areas that will be directly hit.

“That is the feature of La Niña. There will be excessive rainfall. (In) that situation, the tendency is for agricultural commodity prices to go up,” he said.

“That’s why some areas will declare a state of calamity. That is the thing that enables you to control the prices. State calamities are also declared to prevent undue profiteering or undue price increases in basic commodities in typhoon-hit areas,” he added.

2-M unemployed in March

The unemployment rate, meanwhile, inched up in March on the back of the African swine fever (ASF) epidemic and the El Niño phenomenon which both severely affected the agriculture sector, the Philippine Statistics Authority said on Wednesday.

Data from the state statistics bureau showed the jobless rate in the country reached 3.9 percent in March, higher than the 3.5 percent seen in February.

This means 2.42-million Filipinos were either jobless or out of business in March, up from the 1.8-million unemployed Pinoys in February.

In a briefing, National Statistician Claire Dennis Mapa said the PSA noted a decline in the number of hogs to 202,000 for the month due to the ASF.

Mapa said the ASF has affected hog production in some provinces which led to a reduction in their output.

He said the El Niño also affected the output in the agriculture sector, affecting the livelihood of farmers.

“One of those greatly affected in terms of employment is the agriculture sector, which includes fisheries. This is related to planting, harvesting, and growing,” Mapa said.