BSP-registered foreign portfolio investment transactions yield net outflows for 2020
BSP-registered foreign portfolio investments (FPIs) for 2020 yielded net outflows of US$4.2 billion as a result of the US$15.9 billion outflows and US$11.7 billion inflows for the year. The net outflows may be broken down to net outflows in the following instruments: Philippine Stock Exchange (PSE)-listed shares (US$3.3 billion); Peso government securities (GS) (US$931 million); and other portfolio instruments[2] (US$22 million).
BSP-registered FPIs for 2020 aggregated US$11.7 billion, reflecting a 29.7 percent decrease (or by US$4.9 billion) compared to the US$16.6 billion level in 2019. These FPIs were predominantly investments in PSE-listed securities (80.5 percent) mostly in property companies, holding firms, banks, food, beverage and tobacco firms and information technology companies, while the balance
(19.5 percent) were invested in Peso GS. The United Kingdom, Singapore, United States (US), Luxembourg and Hong Kong were the top five (5) investor countries during the year, with combined share to total of 78.2 percent
Recorded outflows (US$15.9 billion) for 2020 were also lower compared to previous year’s US$18.5 billion (by 14.0 percent or US$2.6 billion). Majority (or 96.9 percent) of these outflows represented capital repatriation while the remaining 3.1 percent pertained to remittance of earnings. The US continued to be the main destination of outflows with 63.8 percent of total.
Developments for the year included the ongoing impact of the COVID-19 pandemic to the global economy and financial system, along with international and domestic developments throughout the year such as geopolitical tensions, certain corporate governance issues and extended community quarantine measures in various regions in the country.
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.
[1] Refer to inward foreign investments in PSE-listed securities (PSE); Peso-denominated government securities (GS); Peso time deposits (PTDs) with banks with minimum tenor of 90 days; other Peso debt instruments (OPDIs); unit investment trust funds (UITFs); and other portfolio investments such as Exchange Traded Funds (ETFs) and Philippine Depositary Receipts (PDRs)
[2] Includes PTDs, OPDIs, UITFs, ETFs, and PDRs
