BSP-registered foreign portfolio investments yield net outflows in April 2020

BSP-registered foreign portfolio investments yield net outflows in April 2020

BSP-registered foreign portfolio investments[1] for April 2020 yielded net outflows of US$660 million resulting from the US$1.3 billion gross outflows and US$627 million gross inflows for the month. This is lower than the recorded net outflows of US$961 million in March.

The US$627 million registered investments for the month reflected a 34.3 percent decline from the US$954 million figure in March 2020 and is also the lowest recorded monthly gross inflows since July 2010. About 91.2 percent of investments registered were in PSE-listed securities (pertaining mainly to holding firms, property companies, banks, food, beverage and tobacco firms and telecommunication companies) while the remaining 8.8 percent went to investments in Peso government securities. The United Kingdom, the United States (US), Singapore, Hong Kong and Switzerland were the top five (5) investor countries for the month, with combined share to total at 85.5 percent.

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Outflows for April (US$1.3 billion) were lower compared to the level recorded for March (US$1.9 billion or by 32.8 percent). The US received 61.7 percent of total outflows.

Year-to-date (1 January to 30 April 2020) FPI transactions yielded net outflows of US$2.1 billion resulting from the US$6.3 billion gross outflows and US$4.2 billion gross inflows for the said period. This is a reversal from the US$37 million net inflows noted for the same period last year (1 January to 3 May 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: (i) continuing geopolitical tensions between the US and Iran; (ii) ongoing trade negotiations between the US and China; and (iii) renegotiation of the contracts of the country’s 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.

[1] 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

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Source: Bangko Sentral ng Pilipinas

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