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Foreign Portfolio Investments Record Net Inflow in February

03.14.2008

February 2008 Flows

Transactions in Bangko Sentral-registered foreign portfolio investments resulted in a net inflow of US$370.9 million in February, in contrast to the US$237.0 million net outflow posted in January.  The net inflow reflected renewed investor confidence owing to positive economic reports such as the better-than-expected fiscal deficit of PhP9.4 billion in 2007, the 21.4 percent expansion in exports in December 2007, and the strong 2007 earnings performance of several blue chip companies.  Seen to have limited the magnitude of the net inflow were continued negative reports on the US economy, soaring oil prices which triggered fears of rising inflation, and domestic political concerns.

On a gross basis, registered foreign portfolio investments  in February aggregated almost US$1.2 billion, 53 percent (US$623.7 million) of which pertained to shares listed in the Philippine Stock Exchange (PSE).  Investments in peso-denominated government securities, primarily Fixed Rate Treasury Bonds or FXTBs and placements in peso time deposits accounted for 22 percent and 25 percent, respectively, of registered investments.  Capital repatriations amounted to US$814.1 million and arose from the following: a) divestments from PSE-listed shares (48 percent) and government securities (23 percent); and b) withdrawals of peso deposits  (29 percent).

January-February 2008 Flows

For the first two months of the year, foreign portfolio investment transactions posted a net inflow of US$133.9 million.  This level represented 20 percent of the US$664.8 million net inflow for the comparable period in 2007, due primarily to lingering fears of a slowdown in the US economy and lower initial/follow-on public offerings. 

Gross investment inflows reached over US$2.3 billion, three percent more than the total recorded for the same period in 2007.  Investments in PSE-listed shares of US$1.2 billion accounted for 52 percent of total, almost half of which went to telecommunications and property firms. Peso-denominated government securities, primarily FXTBs, comprised  35 percent (US$808 million) of total investment inflows while peso bank deposits accounted for the 13 percent balance.  The top four countries of origin of investment inflows during the period were Singapore, United Kingdom, United States and Malaysia.

Meanwhile, gross capital outflows for the period rose to US$2.2 billion or by 38 percent from last year. The outflows arose from divestments from listed shares (42 percent of total) and government securities (28 percent), as well as withdrawals of peso deposits (30 percent). 

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