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Foreign Portfolio Investments Post Net Inflows for the First Seven Months of 2015

08.14.2015

Transactions for the period January to July 2015 yielded net inflows of US$478 million, a turn-around from the US$1.1 billion net outflows recorded in 2014 when funds flowed back to the United States as tapering of the quantitative easing program started in early 2014.

 For the month of July 2015, registered foreign portfolio investments amounted to US$1.4 billion compared to US$1.7 billion last month, as the imminent interest rate hike in the US weighed down on investor sentiment. Outflows registered a drop of more than US$0.6 billion from the June 2015 figure, resulting in an overall net outflow of US$160 million for July.

About 75.4 percent of investments registered during the month were in PSE-listed securities (mainly pertaining to holding firms; banks; property firms; food, beverage and tobacco companies; and telecommunication firms); 24.0 percent in Peso GS, and the rest in Peso time deposits and other peso debt instruments (0.6 percent). Transactions in Peso time deposits and Peso GS yielded net inflows of US$9 million and US$1 million, respectively, while net outflows were recorded for PSE-listed securities (US$159 million) and other peso debt instruments (US$11 million).

The United Kingdom, United States, Singapore, Hong Kong, and Luxembourg were the top five (5) investor countries for the month, with combined share to total of 80.2 percent. The United States continued to be the main destination of outflows, receiving 71.9 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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