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

30 July 2020
BSP-registered foreign portfolio investments yield net outflows in June

BSP-registered foreign portfolio investments[1] for June 2020 yielded net outflows of US$235 million resulting from the US$1.3 billion gross outflows and US$1.0 billion gross inflows for the month. This is smaller than the recorded net outflows of US$1.0 billion in May.

The US$1.0 billion registered investments for the month is more than twice the US$486 million recorded for May 2020. About 92.3 percent of investments registered were in PSE-listed securities (pertaining mainly to holding firms, property companies, banks, telecommunication firms and food, beverage and tobacco companies) while the remaining 7.7 percent went to investments in Peso government securities. The United Kingdom, Singapore, the United States (US), Norway and the Bahamas were the top five (5) investor countries for the month, with combined share to total at 71.7 percent.

Outflows for June (US$1.3 billion) were lower compared to the level recorded for May (US$1.5 billion or by 15.9 percent). The US received 61.4 percent of total outflows.

Registered FPI transactions from 1 January to 30 June 2020 yielded net outflows of US$3.3 billion resulting from the US$9.0 billion gross outflows and US$5.7 billion gross inflows for the said period. This is larger compared to the US$721 million net outflows noted for the same period last year (1 January to 30 June 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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