BSP-registered foreign portfolio investments net outflows in 2021 lower by 86.5 pct vs 2020

BSP-registered foreign portfolio investments (FPIs)i in December 2021 recorded net outflows of US$4 million, bringing the total net outflows for 2021 to US$574 million.  Nonetheless, the full year net outflow level was lower by 86.5 percent compared to the total net outflows of US$4.24 billion in 2020.

The net outflow transactions in December 2021 resulted from the US$1.336 billion gross outflows and US$1.332 billion gross inflows for the month. This is a reversal from the US$110 million net inflows recorded in November 2021 but is lower compared to the US$524 million net outflows recorded in December 2020.

During the month, majority of investments (or 97.0 percent) registered were in Philippine Stock Exchange (PSE) – listed securities (investments mainly in utilities; food, beverage and tobacco; holding firms; property and banks) while the remaining 3.0 percent went to investments in Peso government securities (GS). The top five (5) investor countries for the month were the United Kingdom (UK), United States (US), Singapore, Luxembourg and Switzerland with combined share to total at 79.5 percent. The US$1.33 billion gross inflows in December 2021 were higher compared to the gross inflows of US$1.28 billion recorded in November 2021 and US$1.08 billion in December 2020 by US$47 million (or by 3.7 percent) and US$248 million (or by 22.8 percent), respectively.

The US$1.34 billion gross outflows for December 2021 were higher by 13.7 percent (or by US$161 million) compared to gross outflows recorded in November 2021 (US$1.17 billion) but were 16.9 percent lower (or by US$272 million) compared to gross outflows recorded in December 2020 (US$1.61 billion). The US remains to be the top destination of outflows, receiving 72.9 percent of total remittances.

For whole year 2021, total net outflows in BSP-registered FPIs transactions reflected the US$14.19 billion gross outflows and US$13.62 billion gross inflows for the year. The net outflows broken down per instrument were net outflows for PSE-listed shares (US$956 million) and other portfolio instruments (US$17 million), while net inflows were recorded for Peso GS (US$398 million).

BSP-registered   FPIs   for   2021   aggregated   US$13.62   billion, reflecting a 16.6 percent increase (or by US$1.94 billion) compared to the US$11.68 billion level in 2020. These FPIs were predominantly investment in PSE-listed securities (77.2 percent) mostly in food, beverage and tobacco; property; holding firms; banks and utilities, while the balance (22.8 percent) were invested in Peso GS. The UK, US, Singapore, Luxembourg and Hong Kong were the top five (5) investor countries during the year, with combined share to total at 77.4 percent.

Recorded outflows of US$14.19 billion for 2021 were lower compared to previous year’s US$15.92 billion (by 10.8 percent or US$1.72 billion). Majority (or 96.5 percent) of these outflows represented capital repatriation while the remaining 3.5 percent pertained to remittance of earnings. The US received 67.3 percent of total outflows.

Registration of inward foreign investments with the BSP is optional under the rules on foreign exchange transactions. It is required only if the investor or its representative will purchase 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 its investment but the foreign exchange will have to be sourced outside the banking system.