BSP-registered foreign portfolio investment transactions for the month of May yielded net outflows of US$750 million, resulting from gross outflows of US$2.0 billion and gross inflows of US$1.2 billion. By instrument; all investment instruments resulted in net outflows: listed securities at the Philippines Stock Exchange (PSE-listed securities - US$508 million); Peso government securities (Peso GS - US$241 million); and other Peso debt instruments and other portfolio instruments (each at less than US$1 million).
Gross inflows rose 25.0 percent from the US$990 million figure last month. This may be attributed to investor reaction to lower inflation for April 2019 amid the holding of the country's midterm elections and the BSP's announcement to cut the reserve requirements ratio of universal and commercial banks. About 81.5 percent of investments registered during the month were in PSE-listed securities (pertaining mainly to holding firms, property companies, banks, food, beverage and tobacco companies, and transportation services firms); while the 18.5 percent balance went to Peso GS. The United Kingdom, the United States (US), Malaysia, Singapore, and Luxembourg were the top five (5) investor countries for the month, with combined share to total at 76.7 percent.
Gross outflows for May 2019 (US$2.0 billion) were higher by 54.2 percent vis-A�-vis the April 2019 level (US$1.3 billion) as investors reacted to the renewed trade tensions between the US and China. The US continued to be the main destination of outflows, receiving 81.5 percent of total remittances.
Year-on-year, a 2.1 percent increase in gross inflows was noted from the US$1.2 billion inflows recorded during the same month a year ago; gross outflows also increased by 40.1 percent from its US$1.4 billion level in May 2018.
Registration of inward foreign investments with the Bangko Sentral ng Pilipinas (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.
Source: Bangko Sentral ng Pilipinas (BSP)