Current account shows $2.5-B surplus in Q2

INCOME earned by the country from abroad, net of investments, grew slightly in the second quarter of the year amid the steady inflow of remittances and revenues of business process outsourcing (BPO) firms, documents released by the Bangko Sentral ng Pilipinas showed.

The country posted a $2.5-billion surplus in its current account in April to June, which counted earnings from exported goods and services as well as other foreign exchange inflows net of loans and investments.

This was higher than the $2.3-billion surplus in the current account in the same three-month period last year.

The current account is one of the two main components of the country’s balance-of-payments (BOP) position, which is the summary of all the money that entered the country and the funds that went out.

“The continued surplus in the current account was buoyed by the combined effect of higher net receipts in the secondary income and services accounts as well as the reduced deficit in trade-in-goods,” the BSP said in a statement.

The main component in the secondary income account were remittances from non-resident overseas Filipino workers (OFWs), which made up 98 percent of the total. Non-resident OFWs refer to migrants with long-term contracts.

These remittances, the BSP said, more than offset the reversal of the primary income balance from net receipts to net payments. The primary income account referred to export revenues, money earned from investments of foreigners—not to be confused with actual investments that came in and out—and remittances from resident OFWs or those with shorter contracts.

Despite the increase in remittances from resident OFWs, the primary account still slumped to a net payments of $465 million on the back of 75.2-percent and 137.1-percent increases in dividends from foreign direct and portfolio investments, respectively.

Net service receipts, the third component of the current account, amounted to $226 million in the second quarter, higher than the $156 million in net receipts in the same quarter last year.

This came on the back of higher net receipts from the BPO sector, BSP Deputy Governor Diwa C. Guinigundo said.