BSP-registered foreign portfolio investment transactions yield net inflows in February

March 20, 2020

BSP-registered foreign portfolio investments for February yielded net inflows of $40 million resulting from the $1.37 billion inflows and US$1.33 billion outflows for the month,  the Bangko Sentral ng Pilipinas said Friday.

This is a reversal from the recorded net outflows of US$486 million in January.

The $1.4 billion registered investments reflected an 11.3 percent increase from the $1.2 billion figure in January 2020.

About 68.7 percent of investments registered during the month were in Philippine Stock Exchange (PSE)-listed securities (pertaining mainly to holding firms, property companies, banks, transportation services firms, and food, beverage and tobacco companies) while the remaining 31.3 percent went to investments in peso government securities.

The United Kingdom, Singapore, the United States (US), Luxembourg and Japan were the top five investor countries for the month, with combined share to total at 72.8 percent.

Outflows for the month ($1.3 billion) were lower compared to the level recorded for January ($1.7 billion or by 22.5 percent). The US received 63  percent of total outflows.

Developments for the month included the: (i) ongoing concern on the potential global economic impact of the coronavirus disease (COVID-19) outbreak; and (ii) release of 2019 corporate earnings report of several listed firms.

Year-on-year, registered investments were broadly unchanged (2.5 percent lower than the  $1.41 billion level recorded in February 2019), while gross outflows were higher by 24.7 percent compared to the outflows recorded a year ago ( $1.07 billion).

The net inflows recorded for February were lower compared to the $340 million net inflows recorded during the same period last year.

Registration of inward foreign investments with the Bangko Sentral ng Pilipinas (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 or their subsidiary  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.