It is very rare that from school age, a child would develop a curiosity for numbers and the economy, which is what set Michael Ricafort, Rizal Commercial Banking Corporation (RCBC) chief economist, apart.

“I developed an early curiosity on wealth creation and how to make lives better,” Ricafort said on the path towards being among the most sought-after private economists in the land.

By mastering economics, finance, and industries, as well as a recognition of the need to develop more local talent and expertise in these, Ricafort nurtured his interest in sectors that few dare to tread.

“Since high school, it became more pronounced in college, that’s when I started to read the complimentary copy of the Wall Street Journal to have a better global perspective.”

Ricafort said his father shared with him copies of business newspapers and magazines, especially those from Japan (in English) “when I was still a student.”

“So my father saw my early interest in business and economics,” he added.

“I also had after-class discussions to talk about more on economics with my high school Economics teacher (at Manila Science High School), who was also the author of our Economics textbook,” Ricafort added.

As a recent guest in Daily Tribune’s online talk show Straight Talk, Ricafort displayed his deep knowledge and passion for the economy.

Despite the several factors that affect the economy, from El Niño, inflation, and external geopolitical challenges, the overall economic situation remains relatively stable, according to Ricafort.

He said 2018 was a terrible year for inflation as all factors fueling higher prices were present.

“The last time, there was a problem in terms of the spike in rice prices was in 2018, which was six years ago. I think the cheap price then was P25 per kilo, and suddenly, although we have also seen activity in the world market back then, that was the time that previous US President Trump was also trying to bring back some of the sanctions on Iran, also because of the alleged breaches of the nuclear [program],” he said.

Frightening 2018

“Maybe 2018 was a terrible year for inflation because all the factors that led to higher prices were there,” he added, citing 2018 as the maiden year when the Tax Reform for Acceleration and Inclusion law took effect and geopolitical tensions between Iran and the United States rose.

“It’s reversing the easing of the restrictions during the previous US administration under former President Obama.”

“Suddenly, there was this sudden lack of supply of cheap rice, NFA (National Food Authority) rice, in the market. They did act in fairness later that year, and shortly thereafter, you saw cheaper rice being sold in the biggest retailers in the country. There was cheaper rice, like P28 [per kilo],” which he said was visible at major local retailers.

But he said that for the Rice Tariffication Law (RTL) to be effective in pushing prices down, it needs major adjustments that will ensure benefit to all key industrial players, from farmers to consumers.

“Maybe comparing it now, of course, the laws have evolved with the Rice Tariffication Law, we need to nationalize it and try to bring back some of the mechanisms that indeed work. It should be market forces that should prevail but there may be times an active (government) role may be necessary to ensure that the general public will enjoy a lower rice price,” Ricafort said.

“It’s a matter of empowerment. [M]aybe the element is missing due to the previous mechanism before the Rice Tariffication Law. It is a matter of fine-tuning it,” he noted.

The Department of Agriculture (DA) has backed extending the 2019 enacted law, proposing major amendments to ensure Filipino farmers’ livelihoods in times of emergencies.

The revisions to the RTL include strengthening the role of the NFA as a price stabilizer by restoring its ability to import if needed to boost domestic supply and only through the authority of the DA Secretary; its warehouse registration and monitoring functions; and its power to regulate rice prices and market supply.

It also pushed for the allocation of rice import tariff revenues exceeding P15 billion to various programs aimed at financial assistance, crop diversification, water impounding and watershed rehabilitation and development, solar power irrigation programs, and extending of the Rice Competitiveness Enhancement Fund (RCEF) until 2030, including the reallocation of funds toward farm machinery and post-harvest facilities, as well as storage and processing; seed development; and training and extension services, with special attention to soil health improvement initiatives and pest and disease management strategies to protect and enhance rice production.

El Niño havoc dissected

Ricafort said that the continued onslaught of El Niño significantly damaged not only rice but all crops.

Despite this, economic momentum remains even as it is saddled by weather anomalies and geopolitical problems.

“Rice stood out; it went up by 23.9 percent year on year in April compared to a year ago,” he said.

“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 heat wave is not only here but also in neighboring countries. They also feel it,” he added.

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

Besides causing damage to agriculture, El Niño, along with the African swine fever (ASF) epidemic, drove the country’s unemployment rate up in March.

According to the Philippine Statistics Authority, the jobless rate in the country increased to 3.9 percent in March from 3.5 percent recorded in February, which is equivalent to 2.42 million Pinoys being jobless or out of business in March, up from the 1.8 million unemployed in February.

National Statistician Claire Dennis Mapa said the ASF had affected local hog production, causing a reduction in their output.

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

In June last year, the Philippine Atmospheric, Geophysical and Astronomical Services Administration declared the onset of El Niño.

Last March, the weather bureau said the phenomenon was waning. However, it warned of its delayed impact, which 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 as there’s a risk of livelihoods being affected during the typhoon season, especially in areas that will be directly hit.