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Foreign portfolio investment transactions yield net inflows in January


Registered foreign portfolio investments in January 2018 amounted to US$1.62 billion, surpassing the US$1.56 billion and US$1.1 billion recorded the previous month and a year ago, respectively.

However, the US$1.5 billion outflow for the month similarly reflected an increase compared to those recorded in December (US$1.1 billion) and January of 2017 (US$846 million).

On the overall, transactions for the month yielded net inflows of US$162 million attributable to investor optimism over the passage of the first phase of the government’s tax reform program, positive news on corporate earnings, and expected higher government spending for infrastructure projects. The figure is, however, lower than the net inflows recorded in January 2017 (US$301 million) and December 2017 (US$457 million).

About 69.2 percent of investments registered during the month were in PSE-listed securities (pertaining mainly to holding firms, banks, property companies, food, beverage and tobacco firms, and utilities companies), while the 30.8 percent balance went to Peso government securities (GS). Transactions in PSE-listed securities and Peso GS yielded net inflows of US$80 million and US$82 million, respectively.

The United Kingdom, the United States (US), Malaysia, Singapore, and Hong Kong were the top five (5) investor countries for the month, with combined share to total at 80.2 percent. The US continued to be the main destination of outflows, receiving 79.9 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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