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Net Inflows from Foreign Portfolio Investments Reach US$182 Million for the First Eight Months of 2009

09.10.2009

Transactions in BSP-registered foreign portfolio investments for January to August yielded a net inflow of US$182 million, in sharp contrast to the US$446 million net outflow recorded for the comparable period in 2008. Improving business and consumer confidence brought about by encouraging domestic macroeconomic fundamentals such as declining inflation, easing interest rates and robust remittances by overseas Filipinos, contributed to the upbeat investor sentiment on the Philippines.

Gross investment inflows were recorded at US$4.0 billion, with the United States, the United Kingdom, Japan, Singapore and Luxembourg as the top five investor countries, which collectively contributed 81 percent of total funds received.

Transactions for the month of August, however, resulted in a net outflow of US$83 million, a reversal from the US$66 million net inflow recorded in July. Investors were less aggressive during the so-called “ghost month”a   as investors cashed in on gains from previous market rallies to reposition their portfolio for the next month.
 
Registered foreign portfolio investmentsb    of US$385 million fell by 26 percent compared to the previous month. About 88 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 IPDsc   , increased to US$468 million or by 4 percent.

Registration of inward foreign investments with the Bangko Sentral, which is voluntary, entitles the foreign 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  Buddhists, Taoists and believers of Chinese folk religions regard the month of August as "ghost month" where, during this most ill-fated time of the year, people suspend all important activities and decision.

b    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.

c    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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