BSP-registered foreign portfolio investments yield net outflows in May

June 25, 2020

BSP-registered foreign portfolio investments for May 2020 yielded net outflows of US$1.0 billion resulting from the US$1.5 billion gross outflows and US$486 million gross inflows for the month.  This is larger than the recorded net outflows of US$660 million in April.

The US$486 million registered investments for the month reflected a 22.4 percent decline from the US$627 million figure in April 2020 and is also the lowest recorded monthly gross inflows since November 2009.  About 88.3 percent of investments registered were in PSE-listed securities (pertaining mainly to property companies, holding firms, banks, retail companies and telecommunication firms) while the remaining 11.8 percent went to investments in Peso GS. The United Kingdom, the United States (US), Singapore, Hong Kong and Luxembourg were the top five (5) investor countries for the month, with combined share to total at 88.1 percent.

Outflows for May (US$1.5 billion) were higher compared to the level recorded for April (US$1.3 billion or by 15.9 percent).  The US received 47.5 percent of total outflows.

Year-to-date (1 January to 29 May 2020) FPI transactions yielded net outflows of US$3.1 billion resulting from the US$7.8 billion gross outflows and US$4.7 billion gross inflows for the said period.  This is larger compared to the US$685 million net outflows noted for the same period last year (1 January to 31 May 2019) brought about by uncertainties due, among others, to the impact of the COVID-19 pandemic to the global economy and financial system, and other key events earlier in the year such as the: (i) continuing geopolitical tensions between the US and Iran; (ii) ongoing trade negotiations between the US and China; and (iii) renegotiation of the contracts of the country’s water concessionaires. Meanwhile, year-to-date transactions for all investments (PSE-listed securities, Peso GS, and other investments) resulted in net outflows.

Registration of inward foreign investments with the BSP is optional under the liberalized rules on foreign exchange transactions.  The issuance of a BSP registration document entitles the investor or his representative to buy foreign exchange from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of earnings that accrue on the registered investment.  Without such registration, the foreign investor can still repatriate capital and remit earnings on his investment but the foreign exchange will have to be sourced outside the banking system.