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Foreign portfolio investment transactions yield net inflows in February

03.14.2019

Registered investments for the month of February 2019 amounted to US$1.4 billion, lower by 31.6 percent compared to the US$2.1 billion recorded for January 2019. Year-on-year, however, inflows rose by 34.9 percent compared to the US$1.0 billion noted for the same period a year ago. About 77.4 percent of investments registered during the month were in PSE-listed securities (pertaining mainly to banks, holding firms, property companies, food, beverage and tobacco companies, and transportation companies); while 22.4 percent went to Peso government securities (GS) and the 0.2 percent balance went to other Peso debt instruments (OPDIs). The United Kingdom, the United States (US), Singapore, Luxembourg, and Norway were the top five (5) investor countries for the month, with combined share to total at 67.0 percent.

Outflows for the month (US$1.1 billion) were lower compared to figures recorded for January 2019 (US$1.3 billion or by 17.6 percent) and February 2018 (US$1.6 billion or by 32.0 percent). The US continued to be the main destination of outflows, receiving 80.3 percent of total remittances.

On the overall, transactions for the month resulted in net inflows of US$340 million, which may be attributed to investor optimism arising from developments on trade negotiations between the US and China and the passage of the tariffication law, which is expected to help boost the rice supply in the country and thereby temper inflation. On a month-on-month basis, the figure is lower vis-a-vis the US$763 million recorded for January 2019; while year-on-year it reflected an improvement from the US$529 million net outflows for February 2018. Net inflows were noted for all investment instruments: PSE-listed securities (US$175 million); Peso GS (US$162 million); and OPDIs (US$3 million).

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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