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Foreign Portfolio Investments Yield a Record US$4.6 Billion Net Inflows in 2010

01.20.2011

Transactions in foreign portfolio investments for the year 2010 yielded a net inflow of US$4.6 billion, almost 12 times the US$388 million net inflow for 2009, the highest recorded for the past seven (7) years and surpassing the previous record of  US$3.5 billion in 2007.

Registered investments aggregated US$13.0 billion, more than double last year’s US$6.3 billion.  Investments in PSE-listed shares reached US$8.5 billion (65.2 percent of total), or 74.9 percent higher than 2009’s US$4.8 billion. Major beneficiaries were banks (US$1.7 billion); property companies (US$1.6 billion); holding firms (US$1.5 billion); telecommunication companies (US$1.3 billion); and utility firms (US$930 million).

The US$4.5 billion balance of registered investments were in Peso GS – US$4.0 billion, and Peso time deposits and money market instruments – US$503 million.

Registration of foreign investments with the BSP is voluntary. It entitles the non-resident investor or his representative to buy foreign exchange from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of related earnings.

The United States, Singapore, the United Kingdom, Luxembourg and Hong Kong were the top five (5) investor countries, contributing 81.7 percent to total registered investments.

Outflows amounted to US$8.4 billion, and were mostly withdrawals from interim Peso deposits (93.3 percent of total).

Contributing to the strong inflows during the year (US$13.0 billion) were two (2) major initial public offerings (IPOs) by Cebu Air, Inc. and Nickel Asia Corporation, as well as the strong interest in government securities which brought investments of US$4.0 billion. Placements in Peso time deposits also grew fourfold in 2010.

The bullish stock market performance in 2010 resulted from positive investor sentiment with the assumption of a new administration and strong macroeconomic fundamentals on the domestic front, inspiring greater confidence in the country vis-à-vis sovereign debt concerns in the euro zone, the benign economic outlook for the United States and China, and the effects of the geopolitical risks within the Korean peninsula.

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