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Foreign portfolio investment transactions yield net inflows for 2018


Registered foreign portfolio investments for 2018 amounted to US$16.03 billion, slightly lower (by US$38 million or 0.2 percent) than the US$16.07 billion level in 2017. On a monthly basis, the highest gross inflows were recorded in March (US$2.5 billion) while the lowest was noted in September (US$743 million). On a quarterly basis, the largest inflows were noted in the first quarter at US$5.1 billion, representing 32.0 percent of the total for the year. This may be attributed to the large investment in a holding company registered this year accompanied by investors’ optimism over the passage of the first phase of the government’s tax reform program

Outflows for the year amounting to US$14.8 billion reflected an 8.8 percent decline compared to US$16.3 billion in 2017. About 96.8 percent of total outflows represented capital repatriation with the remaining 3.2 percent pertaining to earnings.

Transactions for 2018 yielded net inflows of US$1.2 billion compared to the US$195 million net outflows for the same period last year,  which is attributed to a large investment in a holding company registered in 2018.

Portfolio investments registered during the year were mainly in PSE-listed securities (71.4 percent), Peso government securities (GS - 20.2 percent), and other Peso debt instruments (OPDIs - 8.3 percent). Transactions for the following instruments generated net inflows: OPDIs - US$1.3 billion; Peso GS – US$1.2 billion; and Peso time deposits – less than US$1 million; while net outflows were noted for PSE-listed securities (US$1.3 billion).
The United Kingdom, the United States (US), Singapore, Netherlands, and Hong Kong were the top five (5) investor countries during the year, with combined share to total of 72.8 percent, while the US continued to be the main destination of outflows, receiving  78.8 percent of total.

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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