Current acct surplus hits record high

MANILA, Philippines - The country’s current account surplus reached a record high $12.6 billion last year, up from $11.4 billion in 2013, the Bangko Sentral ng Pilipinas (BSP) said in a report.

“This was mainly due to the narrowing of the trade-in-goods deficit and to gains in the primary and secondary income accounts,” the BSP said in its latest Balance of Payments Quarterly report.

The trade-in-goods deficit during the period narrowed by 10.3 percent as the growth in exports outpaced the increase in imports.

The central bank also said country raked in $1.1 billion in net receipts in primary income, primarily due to the strong inflows of remittances from overseas Filipino workers.

Net receipts from the secondary income, meanwhile, went up seven percent to $22.6 billion on earnings from non-resident workers in the country.

The current account is one of the components of the balance of payments (BOP), a summary of the country’s transactions with the rest of the world.

Looking at the capital account, net receipts recorded under this component slid 24 percent to $101 million amid a drop in capital transfers to the National Government.

Net outflows in the financial account, meanwhile, rose last year to $10.1 billion due to net outflows in portfolio and direct investments during the period.

The BOP position swung to a deficit of $2.879 billion last year from a surplus of $5.085 billion in 2013 due to net outflows in investments stemming from investors’ rebalancing of portfolio in reaction to the US Federal Reserve’s reduction in its massive monthly bond purchases.

It marked the first time the country recorded a BOP deficit after nine years in surplus.

For this year, the BSP has forecast the BOP position to return to a surplus of $1 billion. Latest central bank data showed the BOP position amounted to a surplus of $1.121 billion in the first two months of the year.