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Foreign Portfolio Investments Yield Net Inflows in April 2014

05.15.2014

Transactions in April 2014 for registered foreign portfolio investments yielded net inflows of US$324 million, an improvement from last month’s net outflows of US$92 million. While registered investments of US$1.9 billion were lower by 12.1 percent compared to the previous month’s US$2.1 billion, outflows declined to US$1.5 billion from US$2.2 billion in March 2014.

The net inflows arose from investor optimism about the economy’s growth and strong quarterly corporate results, ignoring the possibility of a further cut in the United States Federal Reserve’s quantitative easing program.

About 76.7 percent of the investments went to PSE-listed securities (holding firms; property companies; banks; telecommunication companies; and utilities firms) and 23.3 percent to Peso GS.

Transactions in PSE-listed securities yielded net inflows of US$217 million, higher than the March 2014 figure of US$153 million. Peso GS likewise yielded net inflows of US$112 million in contrast to last month’s outflows of US$231 million. On the other hand, net outflows of US$5 million were recorded for Peso Time Deposits, compared to the US$14 million outflows posted a month ago.

The United States, Singapore, the United Kingdom, Malaysia, and Luxembourg were the top five (5) investor countries for the month with combined share to total of 78.8 percent, while the United States continued to be the main destination of outflows, receiving 80.0 percent of total.

Registration of inward foreign investments with the Bangko Sentral ng Pilipinas (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.

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