PH trade in services, income continue to improve

The ratio between the country’s economy and the net value of services and compensations paid by foreign enterprises to Filipinos rose in the firstquarter of the year, climbing up further the measurement ladder.

Based on Finance Undersecretary Gil Beltran’s latest Economic Bulletin, the country's trade in services and income balances in the balance-of-payments (BOP) stood at 13.31 percent of gross domestic product (GDP) in January to March this year.

The end-March figure is an improvement compared to 12.35 percent registered in the same period last year.

Beltran said in his report submitted to Finance Secretary Carlos Dominguez III that the expansion pace registered in the first three months is aligned with the upward trajectory the country saw in the past four years.

“Trade in services, primary income and secondary income balances all rose as a percent of GDP,” Beltran said, noting the economic ratio was at 13.32 percent last year, 12.85 percent in the previous year and 11.57 percent in 2014.

“The biggest contributor to this growth was secondary income which consists of unrequited transfers mostly from remittances. It grew 9.5 percent during the quarter,” said Beltran, who is also the Department of Finance’s (DOF) chief economist.

Net receipts in the secondary income account reached $6.5 billion, higher than the $5.9 billion registered in the previous year due to increased personal transfers, which mainly came from overseas Filipino workers' remittances

“Trade in services came second with services balance rising by 19 percent as services exports rose by 6.3 percent and services imports lagged behind at 2.0 percent. BPO (business process outsourcing) services account for over a half of services exports,” Beltran said.

Net receipts in trade-in-services rose to $2.37 billion in the first-quarter from $1.99 billion in the same period last year owing to higher net receipts in technical, trade-related and other business services; manufacturing services on physical inputs; and computer services.

Export revenues in BPO sector totaled $5.5 billion at end-March, a growth of 9.9 percent from the $5-billion earnings in the previous year.

“Primary income which comes mainly from outward direct and portfolio investments by Filipinos less payments for inward foreign investment and foreign loans also rose by 5.7 percent and has been growing from a measly 0.24 percent of GDP since 2014,” the finance official said.