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Foreign Portfolio Investment Transactions Resulted in Net Outflows in February


Registered foreign portfolio investments in February 2018 amounted to US$1.0 billion, 36.6 percent lower than the US$1.6 billion recorded in January 2018. Year-on-year, however, inflows rose by 4.8 percent (or US$47 million) from US$981 million in February 2017.

About 81.0 percent of investments registered during the month were in PSE-listed securities (pertaining mainly to holding firms, property companies, banks, food, beverage and tobacco firms, and casinos and gaming companies), while the 19.0 percent balance went to Peso government securities. The United Kingdom, the United States (US), Malaysia, Hong Kong, Luxembourg, and Singapore were the top six (6) investor countries for the month, with combined share to total at 85.1 percent.

Outflows for the month of US$1.6 billion reflected increases of 7.7 percent and 13.2 percent compared to those recorded in the previous month (US$1.5 billion) and a year ago (US$1.4 billion), respectively. The US continued to be the main destination of outflows, receiving 73.8 percent of total remittances.

On the overall, transactions for February resulted in net outflows of US$545 million. This is a reversal from the US$162 million net inflows in January 2018, and may be attributed to profit taking as well as investor reaction to news of possible rate increases by the US Federal Reserve due to an expected surge in inflation amidst implementation of the US government’s tax cuts. Year-on-year, the figure is higher than the US$409 million net outflow recorded for February 2017.

 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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