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January to July 2009 Foreign Portfolio Investments Net Inflows Amount to US$265 Million

08.13.2009

Foreign portfolio investments for the first seven months of the year yielded a net inflow of US$265 million, in sharp contrast to the US$577 million net outflow recorded for the comparable period in 2008. Gross investment inflows were recorded at US$3.6 billion, with the United States, the United Kingdom, Japan, Singapore and Luxembourg as the top investor countries, collectively contributing 81 percent of total funds received.

Transactions in BSP-registered foreign portfolio investments for the month of July resulted in a net inflow of US$66 million, a reversal from the net outflow of US$77 million recorded in June. Investor confidence was boosted by positive reports on corporate earnings, further reduction in the BSP policy rates, and an upgrade in the country's credit rating. Global consumer confidence rose following the previous quarter's perception that the recession has bottomed out, and as consumers started to embrace the idea of a "recovery".
 
Registered foreign portfolio investments a  increased by 15 percent in July to reach US$518 million. About 81 percent of these investments were in PSE-listed shares while the balance pertained to peso-denominated government securities. Total outflows, which were largely in the form of withdrawals from interim peso deposits or IPDsb   , fell by 14 percent to US$452 million.

Registration of inward foreign investments with the Bangko Sentral, which is voluntary, 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 investment.

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a  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.

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

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