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Foreign Portfolio Investments Yield Net Inflows in February

03.17.2011

February 2011 Transactions

 Transactions during February 2011 resulted in a net inflow of US$534 million, nearly thrice the US$193 million net inflow in January due to lower outflows (US$935 million in February 2011 against US$1.3 billion in January 2011). The net inflow also represented almost four times the US$139 million recorded a year ago due to more registered investments this year, US$1.5 billion compared to only US$500 million last year.  This year’s rise in registered investments is backed by a surge in investments in Peso-denominated government securities (Peso GS), to US$730 million of total (or 49.6 percent) against US$90 million in 2010.  Favorable yields have attracted foreign investor to Peso GS placements.

 Investments in PSE-listed shares amounted to US$740 million (or 50.4 percent of total registered investments), twice the US$370 million recorded in February 2010. The US$730 million balance of registered investments were in Peso GS and Peso time deposits with minimum maturity of 90 days (nil in February this year against US$40 million last year).  Singapore, the United States, the United Kingdom, Luxembourg and Hong Kong were the top five (5) investor countries, collectively contributing 89.6 percent to total registered investments.

Outflows increased to US$935 million from US$362 million in February last year, the bulk of which were withdrawals from interim peso deposits.  These are believed to be in reaction to the sharp rise in oil prices stemming from escalating violence in the Middle East and North Africa, fuelling investor concerns.

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

January to February Flows

For the first two months of the year, transactions netted an inflow of US$727 million, 135.6 percent higher than the figure recorded for the comparable period in 2010.  Registered investments reached US$3.0 billion, or an increase of 179.3 percent from last year’s performance.  Investments in PSE-listed shares of US$1.4 billion exceeded the 2010 figure by 68.3 percent.  Major beneficiaries were banks (US$336 million); holding firms (US$248 million); utility companies (US$241 million); property firms (US$182 million); and telecommunication companies (US$167 million).

Outflows likewise increased to US$2.3 billion from US$768 million and were mostly withdrawals from IPDs (92.4 percent of total).  

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