Registered foreign portfolio investments for March 2014reached US$2.1 billion, 42.7 percent higherthan the previous month’s US$1.5 billion. Year-on-year, however, registered investments were lowerby 8.8 percent asa result of the tapering of the quantitative easing (QE) program in the United States (US) in January this year.
Investments during the month were in PSE-listed securities (76.7 percent) and Peso GS (23.3 percent). For PSE-listed securities, the main beneficiaries were: holding firms;banks;property companies;food, beverage and tobacco firms; and telecommunication companies.
Outflows amounted to US$2.2 billion,19.8 percenthigher than the US$1.9 billion recorded in February in reactionto news of further reductionby another US$10.0 billion of the USQE program starting April, and plans to end the QE by year-end.
While transactions resulted in net outflows of US$92million,this nevertheless reflected a significant improvement fromthe previous net outflows in February 2014 (US$361 million) and March 2013 (US$395 million).This may be attributed to positive investor reaction to the Federal Reserve’s announcement to maintain its current monetary policy coupled with better-than-expected March inflation rate for the Philippines of 3.9 percent versus 4.2 percent in January and 4.1 percent in February.
Transactions in PSE-listed securities yielded net inflows of US$153 million, a rebound from the US$483 million net outflows a year ago and an improvement from the February 2014 net inflows of US$148 million. The reverse was noted for peso GS where net outflows of US$231 million were posted compared to last year’s net inflows of US$77 million. The net outflows were, however, much lower than the February 2014 figure of US$509 million. Peso Time Deposits resulted in net outflows of US$14 million.
The United States, the United Kingdom, Singapore, Malaysia, and Luxembourg were the top five (5) investor countries for the month with combined share to total of 79.7 percent, while the United States continued to be the main destination of outflows receiving 84.5 percent of total.
Registration of inward foreign investments with the BangkoSentralngPilipinas (BSP) is voluntary under the liberalized rules on foreign exchange transactions. The issuance of a BSP registration document 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 earnings that accrue on the registered investment. Without such registration, the foreign investor can still repatriate capital and remit earnings on his investment but the foreign exchange will have to be sourced outside the banking system.