Net outflows of foreign portfolio investments slightly higher in March

April 20, 2017

Foreign portfolio investments transactions for March 2017 resulted in overall net outflows of $460 million, slightly higher than the $409 million net outflows recorded in February 2017, a statement by the Bangko Sentral ng Pilipinas (BSP) said Thursday. Registered foreign portfolio investments during the month amounted to $1.4 billion, reflecting a 40 percent increase from the $981 million in February 2017 due to bargain hunting after the much anticipated interest rate increase by the United States Federal Reserve and the BSP’s decision to keep interest rates on the overnight reverse repurchase facility at three percent. Year-on-year, however, inflows declined by 18.7 percent. Outflows for the month rose to $1.8 billion (or by 31.9 percent) from $1.4 billion in February due to profit taking and news about higher inflation (3.4 percent in March 2017, from 3.3 percent in February 2017, and 1.1 percent a year ago). Year-on-year, outflows also rose by 51.9 percent from $1.2 billion in 2016. For the first quarter of 2017, registered foreign portfolio investments amounted to $3.5 billion, while outflows were recorded at less than $4.1 billion, resulting in overall net outflows of $568 million. This is attributable mainly due to profit taking and continued uncertainties arising from international and domestic developments, such as the anticipated interest rate increase in the United States, and the closure order for several mining companies in the country. About 83.8 percent of investments registered in March were in PSE-listed securities (pertaining to mainly holding firms, banks, property companies, food, beverage and tobacco firms, and telecommunication companies). The balance were investments in peso government securities and unit investment trust funds. Net outflows were recorded for PSE-listed securities ($320 million) and peso government securities ($158 million), while net inflows ($18 million) were noted for investments in unit investment trust funds. The United Kingdom, US, Singapore, Belgium, and Switzerland were the top five  investor countries for the month, with combined share to total of 73.9 percent. The US continued to be the main destination of outflows, receiving 87.6 percent of total remittances. DMS