Foreign portfolio investment transactions for the month of April yielded overall net inflows of US$51 million, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday. This was a reversal from the net outflows recorded last month (US$460 million) and a year ago (US$354 million).
The reversal may be attributed to investor reaction to the World Bank’s view that the Philippines will continue to be a top performer in the region, coupled with positive sentiment in anticipation of the country’s strong gross domestic product number for the first quarter of 2017.
On a year-to-date basis, however, transactions for the first four months of the year resulted in net outflows of US$516 million vis-à-vis the US$56 million net inflows for the same period in 2016. International developments such as the United States (US) air strike against Syria and the increase in US interest rates continued to influence investments into the country.
Registered foreign portfolio investments in April amounted to US$1.3 billion, reflecting a 3.9 percent decline from the US$1.4 billion recorded in March 2017. Year-on-year, however, inflows were higher by 3.6 percent.
Outflows for April declined by 30.8 percent from US$1.8 billion in March, and by 22.1 percent compared to US$1.6 billion in 2016.
About 67.8 percent of investments registered in April went to PSE-listed securities (pertaining to mainly holding firms, banks, property companies, food, beverage and tobacco firms, and telecommunication companies); 32.0 percent to Peso government securities (GS); and the 0.2 percent balance to other Peso debt instruments (OPDIs). Transactions in Peso GS and OPDIs yielded net inflows (US$82 million and US$3 million, respectively), while those for PSE-listed securities resulted in net outflows of US$33 million.
Singapore, United Kingdom, US, Malaysia, and Hong Kong were the top five investor countries for the month, with combined share to total of 81.7 percent. Meanwhile, the US continued to be the main destination of outflows, receiving 75.7 percent of total remittances.
Registration of inward foreign investments with the BSP is optional under the liberalized rules on foreign exchange (FX) transactions.
The issuance of a BSP registration document entitles the investor or his representative to buy FX from authorized agent banks and/or their subsidiary/affiliate FX 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 FX will have to be sourced outside the banking system. BSP