BSP-registered FPIs yield net outflows in March 2021

Bangko Sentral ng Pilipinas (BSP)-registered foreign portfolio investments (FPIs)¹ for March 2021 yielded net outflows of US$541 million resulting from the US$1.37 billion gross outflows and US$824 million gross inflows for the month.

This is larger compared to the net outflows of US$40 million recorded in February 2021.

The US$824 million registered investments for March reflected a 38.4 percent decline compared to the US$1.34 billion recorded in February 2021 (or by US$514 million).

About 90.5 percent of investments registered were in PSE-listed securities (pertaining mainly to banks, property companies, holding firms, food, beverage and tobacco companies and transportation services firm) while the remaining 9.5 percent went to investments in Peso government securities.

The United Kingdom, United States (US), Luxembourg, Switzerland and Hong Kong were the top five (5) investor countries for the month, with combined share to total at 78.7 percent.

Gross outflows for the month (US$1.37 billion) were lower compared to the level recorded for February 2021 (US$1.38 billion) by 1.0 percent (or by US$13 million).  The US received 61.6 percent of total outflows.

Developments during the month included investor reaction to rising inflation and vaccine rollout amid the surge in virus infection and reimposition of restrictions on mobility in the National Capital Region and nearby provinces.

Year-on-year, registered investments declined by 13.6 percent from the US$954 million recorded in March 2020.  Gross outflows were lower than the outflows recorded a year ago (US$1.9 billion or by 28.7 percent).

Furthermore, the US$541 million net outflows is likewise lower compared to the US$961 million net outflows (or by 43.7 percent) recorded for the same period a year ago.

Transactions for BSP-registered FPIs from 1 January to 31 March 2021 yielded net outflows of US$483 million. This is lower compared to the US$1.4 billion net outflows recorded for the same period last year (1 January to 31 March 2020) amid the ongoing impact of the COVID-19 pandemic to the global economy and financial system.

This has been accompanied by international and domestic developments such as the new US administration, vaccine rollout and the reimposition of additional quarantine measures amid the surge in virus infection. Year-to-date transactions for investments in PSE-listed securities and other investment instruments resulted in net outflows, while those for Peso GS yielded net inflows.

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.

 

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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