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Foreign Portfolio Investments Post Net Outflows in April 2016

05.13.2016

Foreign portfolio investment transactions for April 2016 resulted in overall net outflows of US$354 million, a reversal from the US$482 million net inflows recorded in March, and much higher compared to the US$31 million recorded a year ago.

Registered foreign portfolio investments for the month amounted to US$1.3 billion, reflecting a 24.6 percent decline from the US$1.7 billion level in March when there were significant inflows, mainly for government securities (GS). The amount is also lower compared to the US$1.9 billion recorded a year ago when there were large inflows due to stock rights offerings by two (2) holding firms, a property company and a universal bank.
  
Outflows rose by US$421 million (or 34.9 percent) from last month’s US$1.2 billion due to profit taking, coupled with concerns on: i) the oil supply surplus; ii) slump in Chinese equities; and iii) the coming elections. On a year-on-year basis, however, outflows were lower by US$338 million (or 17.2 percent).

About 80.3 percent of investments registered during the month were in PSE-listed securities (mainly holding firms; food, beverage and tobacco firms; banks; property companies; and telecommunication companies), while the 19.7 percent balance were in Peso GS. Transactions in PSE-listed securities and Peso GS yielded net outflows of US$252 million and US$103 million, respectively.
 
The United Kingdom, the United States, Singapore, Luxembourg, and Hong Kong were the top five (5) investor countries for the month, with combined share to total of 78.5 percent. The United States continued to be the main destination of outflows, receiving 83.2 percent of total remittances.

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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