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Foreign portfolio investments yield net inflows in September 2017


Registered foreign portfolio investments for the month of September reached US$1.30 billion, higher by 38.5 percent and 1.8 percent than the US$936 million and US$1.27 billion recorded in August 2017 and September last year, respectively. This may be attributed to investor reaction to the extension of the debt limit deadline in the United States (US), and the Philippine Senate’s approval of the first package of the government’s tax reform program.

About 80.9 percent of investments registered during the month were in PSE-listed securities (pertaining mainly to holding firms, property companies, banks, casinos and gaming firms, food, beverage and tobacco companies); 18.7 percent went to Peso government securities (GS), and the 0.4 percent balance to Peso time deposits (PTDs). Transactions in PSE-listed securities resulted in net outflows of US$42 million, while investments in Peso GS and PTDs yielded net inflows of US$150 million and US$5 million, respectively.

The United Kingdom, the US, Singapore, Norway, and Luxembourg were the top five investor countries for the month, with combined share to total of 79.4 percent.
Outflows for the month of US$1.2 billion were 19.1 percent higher compared to the US$994 million level in August, while the reverse was noted year-on-year, as outflows declined by 43.1 percent from US$2.1 billion. The US continued to be the main destination of outflows, receiving 79.1 percent of total remittances.

On the overall, transactions for the month yielded net inflows of US$113 million, a reversal from the net outflows recorded in August 2017 (US$58 million) and September last year (US$807 million).

Year-to-date transactions (2 January to 29 September 2017) resulted in net outflows of US$206 million, in contrast to the net inflows of US$1.3 billion for the comparative period last year (4 January to 30 September 2016), due to certain domestic and international developments (including the interest rate hikes by the US Federal Reserve, global terrorist attacks, North Korea’s nuclear missile testing and the closure order for several mining companies in the country) earlier in the year.

Registration of inward foreign investments with the Bangko Sentral ng Pilipinas (BSP) is optional under the liberalized rules on foreign exchange (FX) transactions.  The issuance of a BSP registration document entitles the investor or his representative to buy FX from banks and their subsidiary/affiliate FX corporations for repatriation of capital and remittance of earnings that accrue thereon.

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