Philippines’ current account—a major component of the balance of payments (BOP)—for full-year 2015 remained in surplus at $8.4 billion, or 3.8 percent of the country’s gross domestic product, but was lower than the surplus in 2014.
The BSP said the country’s current account last year declined 21.9 percent from a $10.8 billion surplus recorded in full-year 2014 “due primarily to the widening of the trade-in-goods deficit and contraction in net services receipts.”
Current accounts consist of transactions in goods, services, primary income and secondary income, and measure the net transfer of real resources between the domestic economy and the rest of the world.
The BSP data showed that the trade in goods account, which is composed of exports and imports of goods, posted a wider deficit of $21.7 billion compared with the $17.3-billion de icit seen a year earlier.
The trade in goods account worsened by 25.2 percent as the 13.1 percent decline in exports surpassed the 3.2 percent contraction in imports during the period.
The net services receipts account, which measures production activity that changes the conditions of the consuming units or facilitates the exchange of products or financial assets, amounted to $4.2 billion, down 7.3 percent from the $4.6 billion net receipts posted in 2014.
“The contraction caused mainly by higher net payments for travel, charges for use if intellectual property, insurance and pension, government goods and services, along with lower net receipts in telecommunications, computer and information services, and the reversal of personal, cultural and recreational services to net payments from net receipts,” the BSP said.
Primary, secondary income growth
The primary income account, which shows flows for the use of labor and financial resources between resident and nonresident institutional units, recorded net receipts of $2.3 billion in 2015, higher by 220 percent than the $727 million net payments a year earlier.
“This was attributable mainly to reduced net payments in investment income on both direct and portfolio investments,” the central bank explained.
Finally, the net receipts of secondary income account, or current transfers between residents and nonresidents, increased by 3.2 percent to $23.5 billion, boosted by nonresident workers’ remittances, which reached an aggregate $21.7 billion in 2015.
Despite the lower current account surplus last year, the country’s full-year balance of BOP showed a $2.6-billion surplus in 2015, a reversal of the $2.9 billion deficit recorded in 2014.