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Foreign Portfolio Investments Post Higher Net Inflows in July 2016

08.12.2016

Foreign portfolio investment transactions for July 2016 yielded overall net inflows of US$1.1 billion, reflecting a significant improvement from the US$451 million recorded last month. This was also a major turnaround from last year’s US$160 million net outflows.

Registered investments for the month reached US$2.3 billion, 25.4 percent higher than the US$1.8 billion in June, and by 58.6 percent from US$1.4 billion a year ago. This was mainly due to an initial public offering by an industrial company as well as renewed interest in Peso GS.

Outflows for the month declined by 11.5 percent from the US$1.4 billion figure in June 2016, and by 24.4 percent from last year’s US$1.6 billion.

Year-to-date transactions yielded overall net inflows of US$1.6 billion, despite profit taking, concerns about the slowdown of the Chinese economy and the decline in global oil prices. This may be attributed to: (a) large inflows arising from an initial public offering by an industrial company and investments in shares of a holding company and a universal bank; and (b) renewed interest in Peso GS. The figure is more than three (3) times the US$478 million recorded for the same period last year when cumulative net inflows dropped from the US$1.8 billion level recorded for January and February 2015, mainly due to profit taking and growing concerns on the then looming interest rate adjustment in the United States.

About 81.7 percent of investments registered in July went to PSE-listed securities (mainly pertaining to construction, infrastructure and allied services; property companies; holding firms; banks; and food, beverage and tobacco firms), while the 18.3 percent balance were investments in Peso GS. Transactions in PSE-listed securities and Peso GS yielded net inflows of US$821 million and
US$246 million, respectively.

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 79.5 percent. The United States continued to be the main destination of outflows, receiving 79.3 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.

View TableAnnex A | Annex B

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