The country’s balance of payments (BOP) position recorded a surplus of $1.5 billion in the first quarter of the year, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
The BSP explained that the said figure was equivalent to 2.4 percent of the country’s gross domestic product.
For the first three months of 2013, the BOP position rose by 23.5 percent from the $1.2 billion in the comparable period a year ago.
The BOP summarizes the country’s economic transactions with the rest of the world, such that a surplus means dollar receipts exceed payments and a deficit the reverse.
“The country’s external payments position in the first quarter of 2013 sustained the surplus recorded since 2005 on the back of strong current account,” it stated.
The central bank said that the current account for the first quarter recorded a surplus of $3.4 billion, rising by eightfold compared to the $393 million surplus in the same period a year ago.
Current account consists of transactions in goods, services, income and current transfers.
This account measures the net transfer of real resources between the domestic economy and the rest of the world.
It attributed that rise on the current account surplus to the improved external demand for the Philippine-made goods from the country’s major trading partners, which showed signs of economic recovery.
The continued growth of the business process outsourcing industry and sustained demand for skilled overseas Filipino workers were also identified as drivers.
“This appreciable uptrend was mainly due to higher net receipts in the secondary income and service accounts, combined with the reduced deficit in trade-in-goods and the lower net payments of primary income,” the BSP said.
Moreover, the central bank said that the country continued to be a net recipient of funds from the rest of the world, as the financial account recorded net inflows of investments from nonresidents in the first quarter of the year.
Financial account yielded net borrowings, or net inflows by residents of $1.5 billion in the first quarter, lower by 69.1 percent compared to the $4.8 billion a year ago.
Financial account covers transactions associated with financial assets and liabilities.
Furthermore, the BSP said that direct investments continued to post net inflows at $814 million, lower by 9.4 percent than the level in the first quarter of 2012.
Portfolio investment account reached $3.1 billion in the first quarter of 2013.
Good for the economy
The BSP explained that persistent BOP surpluses help build up the country’s gross international reserves (GIR), an ample supply of which helps prop up the peso and keeps domestic inflation at bay.
The central bank said that the sustained BOP surplus allowed the accumulation of higher gross international reserves of $84 billion as of end-March 2013, expanding by 10.3 percent from a year-ago level of $76.1 billion.
For the rest of 2013, the BSP expects a balance of payments surplus of $4.4 billion, which will be supported by robust remittances and a recovery in trade.