The country’s current account posted a $13-billion surplus last year, the biggest since 2005, according to the Bangko Sentral ng Pilipinas (BSP).
The latest figure reversed the $3.1-billion deficit in 2019. Based on latest available central bank data, the 2020 current account surplus was also the highest since 2005.
“Imports contracted more than the exports of goods, which led to lower trade in goods deficit in 2020,” Redentor Paolo Alegre Jr., senior director at the BSP’s Department of Economic Statistics, said during a virtual briefing on Friday.
According to the balance of payments report also released by the Bangko Sentral, the trade in goods deficit last year narrowed by 35.4 percent to $31.8 billion.
Total imports of goods plunged by 22.9 percent to $79.3 billion from $102.8 billion in the previous year as a result of reduced importation across all major commodity groups.
Exports of goods, meanwhile, shrank by 11.3 percent to $47.4 billion in 2020 from $53.5 billion last year, mainly from the shortfall in shipments of manufactures (12.2 percent), mostly electronic products as well as travel goods and handbags, brought about by weak demand from major export markets.
“The trade in services also contributed to the current account surplus by posting higher net receipts,” Alegre added.
Net receipts in the trade in services account amounted to $13.1 billion in 2020, registering a slight growth of 0.3 percent from the $13 billion posted in 2019.
Higher net receipts of technical, trade-related and other business services along with lower net payments of insurance and pension services, charges for the use of intellectual property, and financial services were recorded during the period.
However, these were tempered by higher net payments posted in travel and telecommunication services, combined with lower net receipts in computer and manufacturing services.
This year, the central bank projects the current account to post a lower surplus of $9.1 percent, equivalent to 2.3 percent of the country’s gross domestic product (GDP).
The latest estimate is an upward adjustment of the BSP’s December forecast of $6.1 billion.
“The upward revision in the current account considers the anticipated broad-based recovery in both goods and services trade amid expectations of a vaccine-backed and policy-supported resumption of global and domestic economic activities this year,” the Bangko Sentral said.
A major component of the country’s balance of payments (BoP), the current account consists of transactions in goods, services, primary income and secondary income. It measures the net transfer of real resources between the domestic economy and the rest of the world.
As for the overall payments balance position, the BSP said it may moderate to a surplus of $6.2 billion this year from its recent peak of $16 billion in 2020.
This forecast, however, reflects an upward adjustment from the earlier projection of a $3.3 billion BoP surplus or 0.8 percent of GDP for the year, the central bank said.
“On balance, the latest BoP assessment for 2021 reflects optimism amid expectations of gradual strengthening of the economy anchored mainly on positive developments on the rollout of Covid-19 (coronavirus disease 2019) vaccines, better-than-anticipated global growth momentum, and continued strong government support to stimulate recovery,” it added.