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Foreign Portfolio Investments Yield Net Inflows Anew in February

03.12.2015

Transactions in foreign portfolio investments for February yielded net inflows of US$1.2 billion, twice the figure recorded a month ago. Investments rose due to: (i) block sale of shares of two (2) holding firms; and (ii) renewed interest in Peso government securities. This amount is in contrast to the US$355 million net outflows recorded a year ago, due to tapering of the quantitative easing program of the United States.
 
Foreign portfolio investments registered during the month rose to US$2.5 billion, or by 16.2 percent from last month’s level. Year-on-year, the figure is  70.3 percent higher as the first quarter of 2014 saw the largest impact of the  tapering of the quantitative easing (QE) program of the United States (US) which started in early 2014. Total outflows for the month of US$1.4 billion were lower by 15.3 percent than those recorded in January 2015 (US$1.6 billion) and by 26.6 percent vis-à-vis the figure for the same period last year (US$1.9 billion).

About 66.4 percent of investments registered in February were in PSE-listed securities (mainly holding firms; property companies; banks; food, beverage and tobacco companies; and utilities firms); the rest of the investments were in Peso GS (30.6 percent) and Peso time deposits (3.0 percent). Transactions in all investment instruments yielded net inflows: PSE-listed securities - US$637 million; Peso GS – U$479 million; and Peso time deposits - US$75 million.

Singapore, the United Kingdom, the United States, Luxembourg, and Hong Kong were the top five investor countries for the month, with combined share to total of 82.1 percent. The United States continued to be the main destination of outflows, receiving 81.9 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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