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Net Foreign Portfolio Investment Inflow Rose Over Threefold in 2003

01.15.2004

Bangko Sentral Governor Rafael B. Buenaventura reported today that foreign portfolio investment transactions registered a sizeable US$675.8 million net inflow in 2003, over threefold the US$211.7 million figure in 2002. Data sources are the weekly reports submitted to the Bangko Sentral by five largest custodian banks.

Nonresident investments in all types of portfolio investment instruments posted net inflows during the year: PSE-listed securities, US$30.7 million; government securities/money market instruments, US$180.3 million; and peso bank deposits, US$464.8 million. In 2002, only investments in peso bank deposits showed a net inflow of US$350.2 million while investments in PSE-listed securities and government securities/money market instruments registered net outflows of US$115.2 million and US$23.3 million, respectively.

On a gross basis, foreign portfolio investment inflows totaled US$1,644.2 million in 2003, 29 percent more than the US$1,277.6 million figure in 2002. On the other hand, withdrawals of foreign investments in portfolio instruments dropped by 9 percent to US$968.4 million, from US$1,065.9 million in 2002.

On a monthly basis, only the month of February recorded a net outflow (a minimal US$1.6 million). Positive developments such as the strong gains in Wall Street, the generally lower-than-expected budget deficit and inflation rate figures, reduced interest rates and high corporate earnings apparently outweighed the negative factors such as the US-Iraq War, the SARS outbreak and the lingering security and political concerns, insofar as the foreign investors were concerned.

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