Current account surplus up 34% in Q3

THE COUNTRY enjoyed a double-digit increase in its current account surplus in the third quarter as exports rose while remittances from overseas Filipino workers remained robust.

According to the Bangko Sentral ng Pilipinas, the current account surplus in the third quarter amounted to $3.1 billion, rising by 34 percent from 2.3 billion as of the same period last year.

Current account is the record of inflows and outflows of foreign exchange to and from the country resulting from trade of goods and services, and income transfers such as remittances.

Export earnings improved in the third quarter from a year ago despite lingering problems confronting the euro zone, as demand from alternative markets reportedly increased.

Higher export earnings were driven largely by increased sale of machinery and transport equipment, wood manufacture and food and beverages to foreign buyers, the BSP yesterday said.

Buyers were mostly from Japan, Hong Kong, Singapore, the United Kingdom and Canada.

Current transfers, which include remittances, reached a net amount of $4.6 billion in the third quarter, up year-on-year by 2.6 percent from $4.5 billion.

“This developed on the back of sustained foreign demand for skilled Filipino manpower and continued financial service innovations of banks and other financial institutions to address the remittance needs of overseas Filipinos and their beneficiaries,” the central bank said in its “Balance of Payments Report” for the third quarter.

Meantime, for the first three quarters of the year, the current account posted a surplus of $7.2 billion, rising by 41 percent from $5.1 billion in the same period last year.

The central bank said exports grew in January to September, thereby boosting inflow of dollars into the country. Officials said, however, that export performance could have been better if not for the crisis gripping the euro zone, a key export market.

Cumulative exports in the first three quarters reached $39.7 billion, up by 7.9 percent from $36.79 billion.

“Total exports of goods were driven mainly by higher growth in exports of manufactured products, fruits and vegetables, and forest products,” the BSP said in the report.

Current transfers posted a net of $13.19 billion up by 2.3 percent from $12.9 billion in the same period last year.

According to the BSP, there is a strong likelihood that the county’s current account would post a higher surplus next year on the back of better export earnings and growing remittances.  Michelle V. Remo