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Foreign portfolio investments result in net outflows in October 2017


 Foreign portfolio investments registered in October 2017 reached US$1.4 billion, higher by 6.8 percent than the US$1.3 billion recorded the previous month. This may be attributed to investor optimism arising from the anticipated approval of the tax reform program of the government. However, the figure is lower compared to the US$1.6 billion a year ago.

About 89.8 percent of investments registered during the month were in PSE-listed securities (pertaining mainly to holding firms, property companies, mining, banks, and food, beverage and tobacco companies); 10.1 percent went to Peso government securities (GS), while the 0.1 percent balance to other Peso debt instruments (OPDIs) and Peso time deposits (PTDs). Transactions in the following instruments resulted in net outflows: PSE-listed securities - US$513 million, Peso GS – US$47 million, and PTDs – US$4 million, while transactions in OPDIs yielded net inflows of US$1 million.

The United States (US), the United Kingdom, Norway, British Virgin Islands, and Luxembourg were the top five investor countries for the month, with combined share to total of 81.0 percent. 
Profit-taking resulted in outflows for the month (US$1.9 billion) which rose by 64.5 percent and 23.8 percent compared to US$1.2 billion and US$1.6 billion for the previous month and a year ago, respectively. The US continued to be the main destination of outflows, receiving 75.5 percent of total remittances.

On the overall, transactions for October resulted in net outflows of US$563 million, a reversal from the net inflows recorded in September 2017 (US$113 million) and October 2016 (US$60 million).

Year-to-date transactions (2 January to 3 November 2017) resulted in net outflows of US$812 million, in contrast to the net inflows of US$1.5 billion for the comparative period last year (4 January to 4 November 2016). This may be attributed 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).

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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