Foreign Investments in Philippines Surge in 2024

The Bangko Sentral ng Pilipinas (BSP) reported a significant increase in foreign investments registered through authorized agent banks (AABs) in 2024, totaling $17.93 billion, a 39.2% rise from the $12.89 billion recorded in 2023.

These investments were primarily allocated to Peso-denominated government securities (Peso GS), accounting for 54.2% of the total, with the remaining 45.8% directed towards Philippine Stock Exchange (PSE)-listed securities.

The leading sectors attracting these investments included banking, holding firms, property, transportation services, and food, beverage, and tobacco industries.

The United Kingdom, Singapore, the United States, Luxembourg, and Hong Kong emerged as the top five investor countries, collectively contributing 86.3% of the total foreign investments for the year.

Outflows for 2024 amounted to $15.83 billion, marking a 20.5% increase from the $13.14 billion recorded in 2023.

A substantial 96% of these outflows represented capital repatriation, while the remaining 4% pertained to the remittance of earnings.

The United States remained the primary destination for these outflows, accounting for 49.8% of the total.

Overall, the transactions resulted in net inflows of $2.1 billion for 2024, a notable reversal from the net outflows of $248.84 million observed in 2023.

Specifically, transactions in PSE-listed shares experienced net outflows of $897.53 million, an improvement from the $1.02 billion net outflows in the previous year.

In contrast, Peso GS recorded net inflows of $3 billion, a significant increase of 284.2% compared to the $781.08 million net inflows in 2023.

In December 2024, foreign investment transactions registered with the BSP through AABs recorded net outflows of $487.37 million, resulting from $1.54 billion in gross outflows and $1.06 billion in gross inflows. This is a reversal from the $96.59 million net inflows posted in November 2024.

The registered investments of $1.06 billion in December were 43.3% lower than the $1.86 billion recorded in November.

Of these investments, 51.7% were in Peso GS ($545.56 million), while 48.3% were in PSE-listed securities ($509.91 million), primarily in sectors such as banking, property, transportation services, holding firms, and food, beverage, and tobacco.

The main sources of these investments were the United Kingdom, United States, Singapore, Germany, and Ireland, which collectively accounted for 76.3% of the total.

Gross outflows in December were lower by 12.6% compared to November, totaling $1.54 billion. The United States continued to be the top destination for these outflows, receiving $718.88 million, or 46.6% of the total outward remittances.

Year-on-year, registered investments in December 2024 were slightly lower by 1% compared to December 2023. However, gross outflows increased by 21.4% over the same period.

The net outflows of $487.37 million in December 2024 were significantly higher than the $205.18 million net outflows recorded in December 2023.

The BSP clarified that the registration of inward foreign investments with authorized agent banks is optional under current foreign exchange transaction rules.

Registration is only necessary if the investor or its representative intends to purchase foreign exchange from authorized agent banks for the repatriation of capital and remittance of earnings.

Without such registration, foreign investors can still repatriate capital and remit earnings, but the foreign exchange must be sourced outside the banking system.