The country’s recurring dollar income rose significantly last year amid the sustained strength of cash transfers and a narrower trade gap due to the recovery in the exports sector.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that the Philippines’ current account surplus in 2013 rose by more than a third, helping the country maintain economic stability amid volatile financial market conditions.
The country ended 2013 with a current account surplus of $9.4 billion or the equivalent of 3.5 percent of gross domestic product (GDP). This was 35.6 percent higher than the previous year, the BSP said.
However, the net inflow in 2013 was still lower than the projected record-high surplus of $11.1 billion for the year.
The current account refers to the country’s income from recurring sources such as remittances from overseas Filipino workers, and revenue from the business process outsourcing (BPO) and tourism sectors.
The difference between revenue from exports of goods and services minus the money spent on imports is also counted under the current account.
This year, the country’s economic managers expect the Philippines to record a surplus of $10.4 billion.
The narrower trade deficit in 2013, which partly accounted for the higher current account surplus, was a result of the contraction of imports, which outpaced the contraction of exports, the BSP said.
A surplus of $6.8 billion was also recorded in services income, made up mainly of revenue dollar-earning BPOs.
Remittances from overseas Filipino workers (OFW) also rose by 7.4 percent to a record high of $22.96 billion in 2013.
The current account surplus allowed the Philippines to post a balance-of-payments (BOP) surplus of $5.1 billion.
The BOP surplus helps ensure the ample supply of foreign exchange liquidity that the economy needs to do business with the rest of the world.