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Foreign portfolio investment transactions yielded net inflows in November

12.14.2018

Registered investments for the month of November 2018 amounted to US$2.0 billion, more than twice the US$953 million figure last month and reflecting an 80.8 percent growth compared to the US$1.1 billion level recorded during the same month a year ago.

About 66.8 percent of investments registered during the month were in PSE-listed securities (pertaining mainly to food, beverage and tobacco companies holding firms, property companies, banks, and utilities companies), while the 33.2 percent balance went to Peso government securities (GS). Transactions in Peso GS and PSE-listed securities yielded net inflows of US$510 million and US$322 million, respectively.

The United Kingdom, Singapore, the United States, British Virgin Islands and Cayman Islands were the top five (5) investor countries for the month, with combined share to total at 83.5 percent.

Outflows for the month (US$1.2 billion) were higher by 18.4 percent compared to figures recorded for October 2018 and November 2017 (both at levels of about US$1.0 billion). The US continued to be the main destination of outflows, receiving 84.8 percent of total remittances.

On the overall, transactions for the month resulted in net inflows of US$832 million. This reflects a turnaround from the US$68 million net outflows recorded last month and an improvement from the US$108 million recorded for November 2017. This may be attributed to positive investors’ reaction to the following: (i) decreasing global oil prices; (ii) BSP’s decision to raise its policy rate; and (iii) progress on the rice tariffication bill, all of which are expected to temper inflation as well as Chinese President Xi Jinping’s visit to the country, which was expected to further deepen ties with China in terms of diplomacy and business development.

Year-to-date transactions (1 Jan to 30 November 2018) yielded net inflows of US$926 million compared to the US$635 million net outflows for the same period last year (2 January to 1 December 2017),  which is attributed to a large investment in a holding company registered this year.

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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