Q3 current account surplus down

MANILA, Philippines—The Philippines’ current account surplus dropped in the third quarter, dragged largely by the decline in demand for the country’s exports amid economic and fiscal woes in the country’s major export markets such as the United States and the eurozone.

Data from the Bangko Sentral ng Pilipinas showed that the country posted a current account surplus of $2.033 billion in the third quarter. This was down by 40 percent from $3.392 billion in the same period last year.

The current account for the three months to September brought the total for the first three quarters of the year to $5.057 billion, down by 25 percent from $6.743 billion in the same period last year.

Current account is the record of the inflows and outflows of foreign currencies resulting mainly from exportation, importation, remittances and debt payments.

Monetary officials said remittances from overseas-based Filipinos remained strong this year, helping boost the country’s current account position. This was attributed to moves of the government to find alternative markets for Filipino workers to compensate for the anemic demand in some major markets.

Government officials said foreign employers continued to prefer Filipino workers.

But while remittances continued to grow this year, the export story is different. The country’s exports have drop this year versus last year as the crisis in the US and eurozone led to shrinking demand, especially for non-essentials like electronics.

Economists said that in tough times, consumers tend to focus spending on basic goods and defer consumption of non-essentials.

Electronics is the Philippines’ major export product, accounting for about 50 percent of the country’s total export revenue. The Philippines exports intermediate electronics that are used for the production of consumer electronic goods, such as cellular phones and computers.

With the latest export data, officials are projecting that export earnings this year will drop by one percent from a year ago.

In the meantime, the BSP reported that the country’s capital and financial account posted a higher surplus in the third quarter.