Foreign portfolio investment transactions yield net outflows in November

Transactions on BSP-registered foreign portfolio investments for November 2019 yielded net outflows of US$345 million as a result of the US$1.5 billion outflows and US$1.2 billion inflows for the month. This is in contrast from the net inflows noted in October 2019 (US$105 million).

The US$1.2 billion registered investments reflected a 4.5 percent decrease from the US$1.3 billion figure in October. About 86.4 percent of investments registered during the month were in PSE-listed securities (pertaining mainly to holding firms, banks, property companies, food, beverage and tobacco firms, and transportation services companies) while the remaining 13.6 percent went to investments in Peso GS. The United Kingdom, the United States (US), Singapore, Hong Kong, and Luxembourg were the top five (5) investor countries for the month, with combined share to total at 78.6 percent.

Outflows for the month (US$1.5 billion) were higher compared to the level recorded for October 2019 (US$1.1 billion or by 34.2 percent). The US received 73.4 percent of total outflows.

Developments for the month included: (i) stalled negotiations between the US and China which could delay the first phase of the implementation of their trade deal; (ii) start of the public impeachment hearings on US President Donald Trump; (iii) US Congress' passage of a human rights bill supporting the pro-democracy protests in Hong Kong; and (iv) the rebalancing of the Morgan Stanley Capital International Philippines Index to reflect its new weightings.

Year-on-year, registered investments were 41.4 percent lower than the US$2.0 billion level recorded in November 2018. Similarly, gross outflows were higher than the outflows noted a year ago (US$1.2 billion or by 27.5 percent). In contrast, net inflows of US$832 million were noted for the same period a year ago.

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.

Source: Bangko Sentral ng Pilipinas (BSP)