THE Philippines’s current-account surplus hit a multiyear high in 2014, proving the component’s stronghold amid the deficit in the overall balance of payments (BOP) seen in the previous year.
This record high surplus in current account, which is the difference between how much the country saved and its investments, will likely be exceeded again this year, according to ING Bank economist Joey Cuyegkeng.
Cuyegkeng explained that the continuous “significant” slide in oil prices in the previous months has helped bumped up current-account figures.
This development will likely add about $1 billion to $2 billion in the country’s current-account surplus this year, he added.
Cuyegkeng shared his view, after the Bangko Sentral ng Pilipinas (BSP) reported on Friday that the Philippines’s current account yielded a surplus of $12.6 billion in 2014. In 2013 the figure was at $11.4 billion.
On record, this is the highest current-account surplus the country recorded since 2005, or when the central bank began recording the BOP position under the new format “BPM6”.
The latest current-account figure also exceeded a government projection of $6.6 billion, or 2.2 percent, of the country’s gross domestic product. The latest surplus numbers contrast with the $2.9-billion BOP—the summary of all the country’s transactions with the rest of the world—deficit seen in 2014.
The central bank attributed the high current-account surplus to the narrowing of the trade-in-goods
deficit, and to the gains in the primary and secondary income accounts.
In particular, the trade-in-goods deficit narrowed by 10.3 percent, to $15.9 billion from the $17.7 billion in the previous year.
This, as the expansion of exports exceeded the growth of imports during the year.
Also, net receipts in the primary income account reached $1.1 billion in 2014—higher by 11.9 percent than the $957 million last year.
Net receipts in the secondary income account, meanwhile, grew by 7 percent to $22.6 billion.