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Foreign portfolio investments rebound in June

07.11.2013

 Registered portfolio investments for the month of June rose to US$2.8 billion, or by 41.6 percent from the US$2.0 billion figure for May due to heightened interest in Peso GS (from US$150 million last month to US$787 million in June). The transactions in May 2013 were a knee jerk reaction of investors to the pronouncement of the U.S. Federal Reserve and considered a healthy market correction after surges in inflows, particularly in April this year.  The expected return of funds to emerging markets has already started in June this year.  Year-on-year, registered investments more than doubled to US$2.8 billion (or by 133.9 percent) from US$1.2 billion in 2012.

 Investments in June consisted of the following: PSE-listed securities (US$2.0 billion or 70.9 percent), Peso GS (US$787 million or 27.7 percent) and Peso time deposits (US$40 million or 1.4 percent). The main beneficiaries of investments in PSE-listed securities were: holding firms (US$889 million), banks (US$270 million), property firms (US$219 million), food, beverage and tobacco companies
(US$207 million), and telecommunication firms (US$140 million).

Outflows, however, rose to US$2.9 billion from US$2.6 billion (or by 8.2 percent) in May  due to massive sell-offs triggered by news on the possible scaling down of the U.S. Federal Reserve’s quantitative easing program within the year. As a consequence, transactions in PSE-listed securities resulted in net outflows of US$541 million, however, this was partly offset by transactions in Peso GS and Peso time deposits which yielded net inflows of US$491 million, and US$27 million, respectively.

The United Kingdom, United States, Luxembourg, Singapore and Hong Kong were the top five (5) investor countries for the month with combined share of 80.4 percent.  The United States continued to be the main beneficiary of outflows from investments receiving US$2.3 billion.
 
Registration of inward foreign investments with the Bangko Sentral ng Pilipinas (BSP) is voluntary.  It entitles the 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 dividends/profits/earnings that accrue on the registered investment.

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