The Philippines posted a surplus in its services trade of $ 13.1 billion in 2020, an increase of 0.3% over 2019.
More than anything, the larger surplus in services trade was attributed to a 5.2% increase in the surplus of other businesses and services from $ 12 billion in 2019 to $ 12.6 billion in 2020.
They also influenced a 20.6% decrease in the deficit of insurance and pension services from $ 1.6 billion in 2019 to $ 1.2 billion in 2020; and a 37.4% contraction in the insurance and pension services deficit from 805 million in 2019 to 504 million in 2020.
According to the government of the Philippines, these effects on trade in services were partially offset by a 15.0% decrease in the telecommunications, computing and information services surplus from $ 4.8 billion in 2019 to $ 4.1 billion in 2020.
The Government actively encourages national and foreign private investment.
GDP and reforms
The Philippine economy is considered one of the most dynamic in East Asia and the Pacific.
But in 2020, that country’s GDP contracted by 8.3% (estimated), due to the Covid-19 outbreak.
The Philippines has undertaken these changes:
- Liberalization of trade and investment.
- eregulation of the financial system.
- Liberalization of currency exchange.
- Tax reforms
- Acceleration of privatization.
- Increased competition in the supply and operation of public services.
- Deregulation of the oil and energy industries.
Trade in services
The balance of payments figures measure the relative flow of goods, services and capital to and from the country represented in the current account and in the capital and financial account.
The current account tracks a country’s trade in services, goods, income, and current transfer transactions.
Meanwhile, the capital and financial account includes the capital account, which covers all transactions involving capital transfers and the acquisition or disposal of non-produced non-financial assets, and the financial account, which covers all transactions associated with changes. ownership in foreign financial assets and liabilities of an economy.
A balance of payments surplus indicates a net inflow of foreign exchange, which increases demand and strengthens the local currency.
This decline was primarily due to the effects of the ongoing global Covid-19 pandemic and resulting domestic closures, border controls, reduced tourism, disruption to trade and manufacturing, and financial market spillovers, which which caused a decrease in imports of capital goods, raw materials and intermediate goods, mineral fuels and lubricants, and consumer goods.