BSP-registered foreign portfolio investments yield net outflows in October 2021

Bangko Sentral ng Pilipinas (BSP)-registered foreign portfolio investments (FPIs)^[i] in October 2021 yielded net outflows of US$221 million resulting from the US$1.17 billion gross outflows and US$950 million gross inflows for the month. This is higher compared to the net outflows of US$24 million recorded in September 2021.

The US$950 million registered investments for October 2021 reflected a 20.1 percent (or by US$239 million) decline compared to the US$1.2 billion recorded in September 2021.

Majority of investments registered (or 95.6 percent) were in PSE-listed securities (investments mainly in food, beverage and tobacco, property, banks, holding firms and information technology) while the remaining 4.4 percent went to investments in Peso government securities.

The United Kingdom, United States (US), Hong Kong, Luxembourg and Switzerland were the top five (5) investor countries for the month with combined share to total at 70.7 percent.

The US$1.17 billion gross outflows for the month were lower by 3.5 percent (or by US$42 million) than the US$1.21 billion recorded in September 2021.  The US received 69.0 percent of total outflows.

Year-on-year, registered investments declined by 29.8 percent from the US$1.4 billion recorded in October 2020.

Conversely, gross outflows were higher than the outflows recorded a year ago (US$913 million) by 28.2 percent. It may be noted that the US$221 million net outflows were a reversal from the US$439 million net inflows recorded for the same period a year ago.

Transactions for BSP-registered FPIs from 1 January to 31 October 2021 yielded net outflows of US$680 million, lower than the US$3.9 billion net outflows noted for the same period last year.

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.

[i] 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