Foreign portfolio investments transactions in January 2017 yielded overall net inflows of US$301 million, a major reversal from the net outflows recorded for both January and December 2016 (US$130 million and US$315 million, respectively).
Registered investments during the month amounted to US$1.1 billion, reflecting a slight increase (8.7 percent) from the figure recorded in December 2016. This may be attributed to optimism about the New Year and positive investor reaction to the announced 6.6 percent GDP growth of the country in the fourth quarter of 2016. Year-on-year, a 39.8 percent growth in registered investments was noted compared to the US$820 million figure for the same period last year.
Outflows for the month declined to US$846 million or by 38.3 percent from US$1.4 billion in December 2016. Year-on-year, outflows were also down by 11.0 percent from US$950 million.
About 95.4 percent of investments registered during the month were in PSE-listed securities (pertaining mainly to banks, holding firms, property companies, food, beverage and tobacco firms, and utilities companies); 3.4 percent were investments in Peso government securities (GS); the 1.2 percent balance went to other peso debt instruments (OPDIs). Transactions for Peso GS and Peso time deposits resulted in net outflows of US$42 million and US$31 million, respectively while net inflows were realized for other instruments (PSE-listed securities – US$360 million; and OPDIs – US$13 million).
The United Kingdom, United States, Singapore, Luxembourg, and Hong Kong were the top five (5) investor countries for the month, with combined share to total of 79.6 percent. The United States continued to be the main destination of outflows, receiving 89.3 percent of total remittances.
Registration of inward foreign investments with the Bangko Sentral ng Pilipinas (BSP) is optional 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.