The Philippines’ balance of payments (BOP) position ended in negative territory for full-year 2014 with a $2.88 billion deficit, reversing the 2013 surplus of $5.09 billion, central bank data shows.
The 2014 BOP position is the biggest deficit since it dipped to a $509 million shortfall in 2000, according to the Bangko Sentral ng Pilipinas (BSP) data.
Compared against BSP’s projection of a $3.4 billion deficit for that year, however, the payments gap was lower. From a peak of $15.2 billion in surplus in 2010, the country’s payments position has been progressively declining to $11.4 billion in 2011, $9.2 billion in 2012 and $5 billion in 2013.
The BOP summarizes the country’s economic transactions with the rest of the world over a certain period. It consists of the current account, capital account and financial account.
Analysts are predicting that in 2015, the country’s external payments will be supported by surpluses in current accounts this year.
Singapore’s DBS and ING Bank Manila said the country’s current accounts—a major BOP component—will continue to post surpluses that will contribute 2 to 3 percent to gross domestic product (GDP) this year. Robust dollar inflows from overseas Filipino workers (OFWs) and business process outsourcing (BPO) remittances are seen boosting current accounts.
Together with capital accounts and financial accounts, current accounts consist of transactions in goods, services, primary income and secondary income, and measure net transfers of real resources between the domestic economy and the rest of the world.