BSP-registered foreign portfolio investments yield net outflows in July

BSP-registered foreign portfolio investmentsa  for July 2020 yielded net outflows of US$453 million resulting from the US$1.2 billion gross outflows and US$719 million gross inflows for the month.  This is larger than the recorded net outflows of US$235 million in June.

 

The US$719 million registered investments for the month reflected a 29.5 percent decline compared to the US$1.0 billion recorded for June 2020. About 96.5 percent of investments registered were in PSE-listed securities (pertaining mainly to utilities companies, holding firms, property companies, banks and food, beverage and tobacco companies) while the remaining 3.5 percent went to investments in Peso government securities. Singapore, the United Kingdom, the United States (US), Bahamas and Hong Kong were the top five (5) investor countries for the month, with combined share to total at 84.6 percent.

 

Gross outflows for July (US$1.2 billion) were lower compared to the level recorded for June (US$1.3 billion or by 6.6 percent).  The US received 63.7 percent of total outflows.

 

Registered FPI transactions from 1 January to 31 July 2020 yielded net outflows of US$3.8 billion resulting from the US$10.2 billion gross outflows and US$6.4 billion gross inflows for the said period.  This is larger compared to the US$706 million net outflows noted for the same period last year (1 January to 31 July 2019) brought about by uncertainties due, among others, to the impact of the COVID-19 pandemic to the global economy and financial system, and other key events earlier in the year such as the geopolitical and trade tensions, and corporate governance issues involving the water concessionaires. Meanwhile, year-to-date transactions for all investments (PSE-listed securities, Peso GS, and other investments) resulted in net outflows.

 

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.

 

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a  Refer to inward foreign investments in PSE-listed securities (PSE); Peso-denominated government securities (GS); Peso time deposits with banks with minimum tenor of 90 days; other Peso debt instruments; unit investment trust funds; and other portfolio investments such as Exchange Traded Funds and Philippine Depositary Receipts

 

Source: Bangko Sentral ng Pilipinas (BSP)