BSP-registered foreign portfolio investments yield net outflows in September

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

BSP-registered foreign portfolio investments[1] for September 2020 yielded net outflows of US$494 million resulting from the US$1.1 billion gross outflows and US$594 million gross inflows for the month.  This is larger than the recorded net outflows of US$127 million in August.  

The US$594 million registered investments for the month reflected a 10.9 percent decline compared to the US$667 million recorded for August 2020. About 92.5 percent of investments registered were in PSE-listed securities (pertaining mainly to holding firms, property companies, food, beverage and tobacco firms, banks and retail companies) while the remaining 7.5 percent went to investments in Peso government securities. Singapore, the United Kingdom, the United States (US), Luxembourg and Switzerland were the top five (5) investor countries for the month, with combined share to total at 82.6 percent.              

Outflows for September (US$1.1 billion) were higher compared to the level recorded for August (US$793 million) by 37.1 percent (or by US$294 million).  The US received 61.0 percent of total outflows.  

FPI transactions from 1 January to 30 September 2020 yielded net outflows of US$4.4 billion resulting from the US$12.1 billion gross outflows and US$7.7 billion gross inflows for the said period.  This is larger compared to the US$1.3 billion net outflows noted for the same period last year (1 January to 30 September 2019) brought about by uncertainties due, among others, to the ongoing impact of the COVID-19 pandemic to the global economy and financial system coupled with international and domestic developments such as geopolitical tensions, certain corporate governance issues and extended quarantine measures in select regions in the country.

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.