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Foreign portfolio investments result in net outflows in February 2017

03.16.2017

Foreign portfolio investments transactions for February 2017 resulted in overall net outflows of US$409 million, a reversal from the net inflows recorded last month (US$301 million) and a year ago (US$58 million).

Registered foreign portfolio investments for the month amounted to US$981 million, reflecting a 14.5 percent decline from the US$1.1 billion in January 2017 as the following developments in the domestic and international fronts weighed down on investor sentiment: i) concerns on trade and immigration policies under the Trump administration; and ii) the closure order for several mining companies all over the country. Year-on-year, an 8.2 percent decrease in inflows was also noted, compared to the US$1.1 billion figure recorded last year.

Outflows for the month rose by 64.4 percent from US$846 million in January due to profit taking and withdrawals from investments in Peso government securities. Year-on-year, outflows rose by 37.5 percent from the US$1.0 billion level in 2016.

About 91.3 percent of investments registered during the month were in PSE-listed securities (pertaining to mainly banks, holding firms, property companies, food, beverage and tobacco firms, and utilities companies); while the 8.7 percent balance went to Peso GS. Transactions in all instruments resulted in net outflows: Peso GS - US$318 million; PSE-listed securities - US$88 million; and
OPDIs -US$3 million.

The United Kingdom, United States, Malaysia, Hong Kong, and Norway were the top five (5) investor countries for the month, with combined share to total of 71.1 percent. The United States continued to be the main destination of outflows, receiving 85.0 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.

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