Current account posts surplus of $8.6 billion in 2009

MANILA, Philippines – The country’s current account surplus posted a more than two-fold increase last year due to higher remittances from overseas Filipinos as well as higher investment inflows, the Bangko Sentral ng Pilipinas (BSP) reported.

The BSP said the country’s current account posted a surplus of $8.6 billion in 2009 or $5 billion higher than the $3.6-billion surplus registered in 2008.

“The more than two-fold increase over the $3.6-billion surplus recorded in 2008 was brought about by the favorable performance of all the components of the current account, except the income account,” the central bank said.

Data showed that the country’s trade deficit improved 31.1 percent to $8.9 billion last year from a year-ago level of $12.9 billion. The country’s merchandise exports plunged 22.3 percent while imports fell 24.1 percent due to the global economic meltdown.

On the other hand, the BSP said trade-in-services account recorded net receipts of $1.5 billion in 2009 or 32.7 percent higher than the $1.2 billion surplus recorded in 2008, on the back of the country’s resilient business process outsourcing (BPO) sector.

“This developed due largely to the gains registered in BPO-related transactions as reflected in higher net receipts from miscellaneous business, professional and technical services as well as computer and information services which expanded by 16 percent and 11 percent, respectively,” the BSP said.

Meanwhile, the BSP reported that income account reversed to a deficit of $69 million compared to the year-ago surplus of $111 million due to the 19.9 percent increase in net income payments by residents to affiliated enterprises and the 35.6 percent rise in portfolio investments.

The central bank also noted lower net interest income receipts on currency and deposit placements by the monetary authorities and corporations due to the decline in global interest rates.

The decline in income account, the BSP said, negated the 12 percent growth in earnings of resident overseas Filipino workers which reached $4.6 billion during the year.

Statistics showed that net current transfers receipts inched up 4.7 percent to $16 billion mainly on account of the 4.2 percent growth in remittances of non-resident OFWs to $15.1 billion in 2009.

The BSP said the net outflows in the capital and financial account widened to $2 billion in 2009 from $1.8 billion in 2008 as the other investment account reversed to a net outflow from a net inflow recorded a year ago.

The direct investment account went up 23.7 percent to $1.6 billion as the country continued to attract foreign investments in 2009 as investors recognized the relative strength of the country’s underlying macroeconomic fundamentals.

On the other hand, the portfolio investment account reversed to a net inflow of RP’s current $1.4 billion from a net outflow of $3.8 billion particularly from the subscription to the bond flotation by the National Government with $3.3 billion, state-run Power Sector Liabilities and Management Corp. (PSALM) with $2.2 billion, and others.

The BSP said the other investment account posted a net outflow of $5.1 billion in 2009, a complete turnaround from the $771 million net inflow in 2008. –Lawrence Agcaoili (The Philippine Star)