July 19, 2018, 6:04 am
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PH CA posts deficit of P2.5B

The current account registered a deficit of $2.5 billion, more than twice the $1.2 billion deficit recorded in 2016, data from the Bangko Sentral ng Pilipinas showed.

BSP said this developed on account of the widening trade-in-goods deficit which more than offset the increased net receipts in the trade-in-services, and secondary and primary income accounts during the year.

Because of the decline, the country’s balance of payments (BOP) position for full year 2017 registered a deficit of $863 million, more than double the $420 million deficit recorded in 2016. 

BSP said this development was underpinned mainly by the increased deficit in the current account during the year, despite the reversal in the financial account to net inflows from net outflows in the previous year.

The trade-in-goods deficit for full year 2017 went up by 15.9 percent to $41.2 billion as the growth in imports of goods of 14.2 percent outpaced that of exports of goods at 12.8 percent. 

Exports of goods rose to $48.2 billion in 2017 from $42.7 billion in 2016 driven by continued demand from the country’s trading partners like China, Hong Kong, South Korea and some countries in Europe. 

The expansion in exports of goods was due largely to higher shipments of manufactured goods and mineral products, which registered double-digit growth of 10.3 percent and 72.4 percent, respectively. 

Imports of goods, meanwhile, aggregated $89.4 billion in 2017 from $78.3 billion a year ago. 

The upturn was accounted for mainly by higher imports of raw materials and intermediate goods at 16.7 percent, and mineral fuels and lubricant 32.9 percent.

Net receipts in the trade-in-services account amounted to $9.5 billion in 2017, higher than the $7 billion net receipts recorded a year ago. 

According to the BSP, the 34.8 percent expansion was accounted for by:  increased net receipts in other business services, particularly technical, trade-related, and other business services as well as computer services; reversal of financial services to net receipts from net payments; and lower net payments for travel and government goods and services. 

Earnings from BPO services for full year 2017 amounted to $22.1 billion or a growth of 9.6 percent from 2016.

The primary income account posted net receipts of $3.1 billion, 20 percent higher than the $2.6 billion net receipts in 2016. 

This was due to the expansion in net compensation inflows mostly from resident overseas Filipino workers by 5.2 percent coupled with lower net payments in investment income by 2.8 percent.

Net receipts in the secondary income account grew by 5.5 percent to $26.1 billion, boosted by the 4.1 percent increase in remittances of non-resident OF workers amounting to $24.1 billion.

Meanwhile, net receipts in the capital account totaled $57 million in 2017, 8.7 percent lower than the $62 million recorded in 2016. 

Receipts in other capital transfers of financial corporations, non-financial corporations, households, and non-profit institutions serving households declined during the year.

The financial account reversed to net inflows of $2.2 billion in 2017 from net outflows of $175 million in 2016. 

This developed mainly on account of the increase in residents’ net incurrence of liabilities to $8.7 billion even as their net acquisition of financial assets rose to $6.5 billion.

Net inflows of direct investments surged to $8.1 billion in 2017. 

The hefty increase was boosted by the significant inflows of FDI which reached a record high of $10 billion during the year. 

Investor sentiment remained positive on the back of the country’s sound macroeconomic fundamentals and growth prospects. 

In particular, investments in debt instruments rose by 20.7 percent to $6 billion.  

Moreover, net equity capital investments expanded by 25.9 percent to $3.3 billion. 

Gross placements of about $3.7 billion originated largely from the Netherlands, Singapore, the United States, Japan, and Hong Kong. 

These were channeled mainly to gas, steam and air-conditioning supply; manufacturing; real estate; construction; and wholesale and retail trade activities.

Net outflows of portfolio investments more than doubled to $3.9 billion in 2017 as residents’ net acquisition of assets and net repayment of liabilities both increased.  

In particular, residents’ net acquisition of financial assets rose by 154.3 percent to $3.1 billion as residents’ net placements in debt securities issued by non-residents increased markedly to $2.4 billion. 
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