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Foreign Portfolio Investments Yield Net Outflow in April

05.14.2009

April 2009 Flows
 
Foreign portfolio investments registered with the Bangko Sentral   yielded a net outflow of US$276.1 million in April, from the US$32.2 million net inflow in March. "Investors cashed in on gains on previous month’s investments in PSE-listed shares and government securities as they opted for more liquidity following the release of the official government data showing an overshooting of the programmed fiscal deficit for the first quarter of the year. On the global front, investors remained risk averse amid the still unstable state of the global economy and the imminent economic threat of the spread of the H1N1 virus," Bangko Sentral Governor Amando M. Tetangco, Jr. said.

Registration of inward foreign investments with the Bangko Sentral is voluntary and entitles the investor to buy foreign exchange from authorized agent banks or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of dividends/earnings that accrue on the registered investment.

Registered foreign portfolio investments 1  totaled US$435.3 million, of which 63 percent or US$275.5 million were invested in PSE-listed shares and 37 percent or US$159.8 million went to peso denominated government securities (peso GS).  Total outflows aggregated US$711.4 million, bulk of which were withdrawals from interim peso deposits or IPDs 2   (US$521.2 million or 73 percent) and remittances of dividends from PSE-listed shares (US$136.1 million or 19 percent).

January-April 2009 Flows

Year-to-date transactions resulted in a lower net outflow of US$221.3 million, from a net outflow of US$287.3 in the same period in 2008.   

Gross investment inflows totaled nearly US$1.7 billion during the period, 58 percent lower than the almost US$4.0 billion posted last year as investors remained risk averse due to the uncertain state of the global economy and the spread of the H1N1 virus in the recent weeks.  Investments in PSE-listed shares of US$1.1 billion (77 percent of which went to telecommunication, mining, property and holding firms) comprised 63 percent of the total and were 55 percent lower than the US$2.3 billion level in 2008. Similarly, investments in peso GS of US$583.9 million (34 percent of total) and peso bank deposits with minimum maturity of 90 days amounting to US$0.8 million (less than 1 percent of total) dropped by  45 percent (from US$1.1 billion) and over 99 percent (from US$545.8 million), respectively.  Meanwhile, placements in money market instruments rose by US$46.2 million for a 3 percent share of the total inflows. The United States, the United Kingdom, Singapore and the Netherlands were the top investor countries and collectively contributed 81 percent of total investment funds during the period.

Gross investment outflows aggregated US$1.9 billion, 55 percent lower than last year’s US$4.2 billion.  Withdrawals from IPDs of US$1.7 billion increased by US$275.3 million or by 20 percent, while withdrawals from peso time deposits fell to US$0.6 million from US$89.2 million. Repatriation of divestment proceeds from a) PSE-listed shares (from US$1.6 billion to US$38.3 million) and b) peso GS (from US$964.3 million to US$64.5 million) declined by 98 percent and 93 percent, respectively. Remittance of cash dividends, profits and earnings dropped by only 19 percent from US$173.6 million to US$141.1 million.

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1  These statistics, which pertain to newly registered investments, are different from foreign portfolio investments in the balance of payments which represent the amount of foreign exchange inflows converted to pesos for investment purposes during the period under review.

2  Interim peso deposit is a temporary deposit account maintained by the foreign investor where sales proceeds of earlier BSP-registered investments are temporarily parked pending subsequent reinvestment or repatriation offshore.

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