Foreign portfolio investments yield net inflows in July: BSP

August 17, 2017

Foreign portfolio investments registered in July amounted to $1.4 billion, reflecting a decline of 28.9 percent and 36.8 percent from the $2 billion and $2.3 billion in June 2017 and July 2016, respectively.

Outflows for July of $1.2 billion were 36.8 percent lower than the $1.9 billion figure in June, but were 2.1 percent higher compared to $1.2 billion a year ago, the Bangko Sentral ng Pilipinas (BSP) said Thursday.

Overall, transactions for July yielded net inflows of $206 million, an improvement from the $73 million last month.

This may be attributed to:  positive investor sentiment on news of inflation declining to 2.8 percent in June from 3.1 percent in May;  strong net foreign buying;  investor reaction to President Rodrigo  Duterte’s second State of the Nation Address; and the US Federal Reserve’s decision to maintain interest rates. However, the figure is lower compared to $1.1 billion in July last year.

On a year-to-date basis from January to July 2017,  transactions still reflected net outflows of $204 million, due to certain domestic and international developments, such as the US air strike against Syria, global terrorist attacks, interest rate increase by the US Federal Reserve, political turmoil in the US, and the closure order for several mining companies in the country.

In contrast, net inflows of $1.7 billion were realized for the same period a year ago from January to July 2016).

About 90.5 percent of the registered investments in July 2017 were in PSE-listed securities (pertaining mainly to food, beverage and tobacco companies, holding firms, banks, property companies, and utilities companies). The 9.5 percent balance went to peso government securities .

Transactions in PSE-listed securities yielded net inflows of $224 million, while investments in peso government securities resulted in net outflows of US$18 million.

The United States, Singapore, the United Kingdom, Luxembourg, and Switzerland, were the top five (5) investor countries for the month, with combined share to total of 82.6 percent. The US continued to be the main destination of outflows, receiving 86.1 percent of total remittances. DMS