Foreign portfolio investments post net inflow in July: BSP

The United States (US), United Kingdom, Hong Kong, Singapore, and Luxembourg were the top five (5) investor countries for the month, with combined share to total at 84.8 percent, the Bangko Sentral ng Pilipinas (BSP) revealed in a statement on Thursday. (File Photo: Bangko Sentral ng Pilipinas/Facebook)

MANILA — Registered foreign portfolio investments for the month of July 2018 amounted to USD959 million, reflecting a 5.3 percent improvement from the USD911 million figure in June 2018. Year-on-year, however, a 33.1 percent decline may be noted from the USD1.4 billion level recorded during the previous year.

The United States (US), United Kingdom, Hong Kong, Singapore, and Luxembourg were the top five (5) investor countries for the month, with combined share to total at 84.8 percent, the Bangko Sentral ng Pilipinas (BSP) revealed in a statement on Thursday.

The bulk of investments registered during the month were in Philippine Stock Exchange (PSE)-listed securities (pertaining mainly to banks, property companies, holding firms, food, beverage and tobacco firms, and small and medium enterprises), while the balance went to Peso government securities (GS).

Net inflows were noted for transactions in PSE-listed securities (USD51 million) and other Peso debt instruments (USD11 million), while those for Peso GS resulted in net outflows (USD9 million).

Outflows for the month (USD906 million) were lower by 36.5 percent and 26.2 percent, respectively, compared to those recorded in June 2018 (USD1.4 billion) and July 2017 (USD1.2 billion). The US continued to be the main destination of outflows, receiving 78.7 percent of total remittances.

On the overall, transactions for July 2018 yielded net inflows of USD53 million, a significant reversal from net outflows of USD516 million in June 2018. This may be attributed to investors’ anticipation of good second quarter corporate earnings results. The figure, however, is lower compared to the USD206 million net inflows recorded in July last year.

Registration of inward foreign investments with the 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.