Metro Manila (CNN Philippines) — The country’s balance of payments (BOP), which comprises all transactions of its residents with the rest of the world, yielded a surplus in the first three months of the year, according to the Bangko Sentral ng Pilipinas (BSP).
The figure marks a reversal from the $4.5 billion deficit incurred in the previous quarter. In 2014, the country registered a full-year deficit of $2.9 billion.
The BSP credited the first quarter’s rebound to robust inflows in the country’s current account, which registered a surplus of $3.3 billion, equivalent to 4.8% of Philippine gross domestic product (GDP) January to March. Likewise, it also noted a marked decline in net outflows in the financial account.
The surplus was buoyed by a lower trade-in-goods deficit and higher net receipts in the services, primary, and secondary income accounts. Trade-in-goods, trade-in-services, and other sources of income (such as those form investments and remittances) form a major part of the current account.
Continued demand from major trading partners such as the U.S., Hong Kong, and Malaysia drove an slight increase in exports of goods to $10.4 billion during the first quarter, compared to the $10.2 billion in the same period last year.
On the other hand, Imports posted a year-on-year dip of 3% to $15.6 billion, mainly due to the decline in imports of mineral fuels and lubricants, and capital goods. Overall, the trade-in-goods deficit shrunk to $4.7 billion in the first quarter compare to the %.4 billion in the same period last year.
Net receipts from trade-in-services posted a year-on-year surge of 38.8% to $2.5 billion, largely because of technical, trade-related, and other business services. The business process outsourcing sector alone raised $4.3 billion in export revenue. Higher receipts were also recorder in personal, cultural, and recreational services.
The primary income account, which factors in income from loans and investments, raised net receipts of $308 million — that’s more than fourfold the $66million raised in the same period last year.
On the other hand, the secondary income account, which personal remittances fall under, recorded net receipts of $5.2 billion in the first quarter — 2.8% higher compared to the same period last year. Growth was attributed mainly to a 3.9% growth in personal transfers, totaling $4.8 billion.
The financial account posted net outflows (or net lending by residents to the rest of the world) of $606 million, the BSP added. The figure is 85.2% lower than the $4.1 billion recorded in the same period last year. However, the decline was offset by the reversal of the direct investment account to net outflows from net inflows.
“The improving global economic conditions supported the favorable outturn in the country’s BOP. In particular, the economic momentum in the United States remained firm and Japan showed some modest expansion,” the BSP said in a statement.
“Some growth was also seen in the euro area owing largely to firming domestic demand and gradual strengthening of external trade. Meanwhile, the global inflation environment remained benign, reflecting the broadly subdued outlook for the international price of oil.”
Late last March, the BSP projected a $2 billion BOP surplus for 2015. “Overall, the external position of the Philippines is seen to improve in 2015…[T]he country’s external position remains a key source of resilience and policy flexibility that would enable the economy to ride out the volatilities of global economic and financial developments.”
