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Foreign Portfolio Investments Post Net Outflow in 2008


For the whole of 2008, foreign portfolio investments registered with the Bangko Sentral posted a net outflow of US$1.4 billion, reflecting a sharp reversal from the US$3.5 billion net inflow in 2007.  “The global financial turmoil, which was precipitated by the U.S. subprime mortgage crisis, has led to recession in many countries across the globe and heightened risk aversion among investors,”   Bangko Sentral Governor Amando M. Tetangco, Jr. said. 

Registration of inward foreign investments with the Bangko Sentral is voluntary and entitles the investor/his representative to buy foreign exchange from the banking system for repatriation of capital and remittance of dividends/earnings that accrue on the registered investment.

Gross inflows of registered foreign portfolio investments  totaled over US$8.3 billion during the period, a 46 percent drop from the more than US$15.5 billion level recorded in 2007.  Investments in PSE-listed shares of US$5.7 billion (almost half of which were in telecommunications and property firms) and in peso-denominated government securities of nearly US$2.1 billion comprised 68 percent and  25 percent, respectively, of the  total registered investments and posted declines of 54 percent and 27 percent from their corresponding 2007 levels.   Meanwhile, investments in peso time deposits grew by 142 percent to US$571.2 million (7 percent) and investments in money market instruments, by 282 percent to US$4.9 million (less than 1 percent).

The United Kingdom, Singapore and the United States were the top three investor countries and accounted for 70 percent of the registered portfolio investments during the year.

Meanwhile, gross capital outflows fell by 19 percent to US$9.7 billion, from the over US$12.0 billion figure in 2007. Capital repatriations from the following investments declined: (a) listed shares by 41 percent to US$3.4 billion (35 percent of total); (b) government securities by 9 percent to US$2.2 billion (23  percent), and (c) money market instruments by 73 percent to US$5.3 million (less than 1 percent).  On the other hand, outflows from withdrawals of investments in peso bank deposits went up by 6 percent to US$4.1 billion (42 percent).  

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