The Philippines’ current account—a major component of the balance of payments—for full-year 2014 reached a record surplus of $12.6 billion as exports far outpaced imports and compensation for resident Filipino workers overseas increased, official data shows.

In a press briefing on Friday, the Bango Sentral ng Pilpinas (BSP) said the country’s current account last year rose about 11 percent over an $11.4 billion surplus recorded in full-year 2013.

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.

Trade gap narrows, services decline

The BSP data showed that the trade in goods account, which is composed of exports and imports of goods, posted a narrower deficit of $15.9 billion compared with the $17.7-billion deficit seen a year earlier.

The trade in goods account improved by 10.3 percent on the back of a 7.3 percent expansion in exports, compared with a 2.3 percent rise 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 $4.9 billion, down 30.5 percent from the $7 billion net receipts posted in 2013.

“The decline resulted largely from increased net payments for travel and transport services by 63.9 percent and 8 percent, respectively, combined with decreased net receipts from technical, trade-related and. other business services (by 2.1 percent),” 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 $1.1 billion in 2014, higher by 11.9 percent than the $957 million net payments a year earlier.

“This was attributable to the 7.4 percent expansion in receipts from compensation of resident overseas Filipino workers to $7.4 billion,” the central bank explained.

Finally, the net receipts of secondary income account, or current transfers between residents and nonresidents, increased by 7 percent to $22.6 billion, boosted by nonresident workers’ remittances, which reached an aggregate $20.4 billion in 2014.

Despite the record-high current account last year, the country’s full-year balance of payments (BOP) showed a $2.88-billion deficit in 2014, a reversal of the $5.09 billion surplus recorded in 2013. The BSP traced the deficit to a slowdown in other BOP components.

The capital account recorded a net receipt of $101 million in 2014, down 24.1 percent from the $134 million posted the previous year as other capital transfers to the national government declined.

The financial account registered a net outflow amounting to $10.1 billion in 2014, more than fourfold the $2.2 billion net outflow registered a year earlier.

“This was due to the substantial increase in the net outflows in other investments and the reversal to net outflows in portfolio and direct investments,” the BSP said.

Investment accounts also recorded significant outflows. The direct investment account showed a reversal to a net outflow of $789 million from a net inflow of $90 million a year earlier, while the portfolio investment account posted a net outflow of $2.5 billion during the period, a reversal of the previous year’s net inflow of $1 billion.

Net outflows in the other investment account doubled to $6.9 billion from $3.4 billion in 2013, while residents’ net repayment of liabilities amounted to $66 million.