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Foreign Portfolio Investments Post Net Inflows in May 2016

06.16.2016

Foreign portfolio investment transactions for May 2016 yielded overall net inflows of US$73 million, in contrast to the net outflows recorded in April (US$354 million) and May 2015 (US$569 million).

 Registered investments amounted to US$1.8 billion, reflecting a growth of 40.1 percent from the US$1.3 billion figure in April and 12.3 percent over the US$1.6 billion recorded a year ago. This was mainly due to: (i) large inflows in shares of a holding company and a universal bank; (ii) renewed interest in Peso GS; and (iii) the relatively peaceful conduct of elections. 
  
Outflows for May rose to US$1.7 billion or by US$84 million (5.1 percent) from the April level due to profit taking. Year-on-year, however, outflows were lower by US$447 million (20.7 percent).

For the first five (5) months of 2016, registered investments reached US$6.6 billion, while outflows amounted to US$6.5 billion, yielding net inflows of US$129 million, amidst profit-taking, concerns about the slowdown of the Chinese economy, and the decline in global oil prices. The level of net inflows this year is  lower compared to the US$1.2 billion recorded for the same period in 2015 which included large inflows for stock rights offerings by two (2) holding firms, two (2) universal banks, and a property company.

About 83.8 percent of investments registered in May 2016 were in PSE-listed securities (mainly pertaining to holding firms; property companies; banks; food, beverage and tobacco firms; and telecommunication companies), and the 16.2 percent balance in Peso GS. Transactions in PSE-listed securities and Peso GS yielded net inflows of US$46 million and US$27 million, respectively.
 
The United Kingdom, the United States, Singapore, Luxembourg, and Switzerland were the top five (5) investor countries for the month, with combined share to total of 84.8 percent. The United States continued to be the main destination of outflows, receiving 80.9 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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