Foreign investments in PHL record net outflows in June

By Francis Allan L. Angelo

The Bangko Sentral ng Pilipinas (BSP) reported net outflows of foreign investments amounting to $27 million in June 2024, a significant reversal from the $43 million net inflows recorded in May 2024.

The change resulted from $1.1 billion in gross outflows and $1.0 billion in gross inflows for the month.

The $1.0 billion registered investments for June were slightly lower by $10 million, or 1%, compared to May’s figures.

Of these investments, 52.8% were in Peso government securities ($551 million), while 47.2% were in PSE-listed securities ($492 million), primarily in holding firms, banks, transportation services, property, and electricity, energy, power, and water sectors.

The majority of investments originated from the United Kingdom, the United States, Singapore, Luxembourg, and Switzerland, which together accounted for 86.9% of the total.

Gross outflows increased by $60 million, or 6%, from May 2024’s $1.0 billion, with the United States receiving the largest share of outward remittances at $597 million, or 55.8%.

Year-on-year, registered investments in June 2024 saw an increase of $153 million, or 17.2%, from $889 million in June 2023.

Gross outflows also rose by $181 million, or 20.3%, compared to the same period last year.

The net outflows of $27 million in June 2024 contrast with the near-neutral net inflows of less than $1 million in June 2023.

From January to June 2024, the Philippines recorded net inflows of $81 million in foreign investments, a substantial improvement from the $804 million net outflows during the same period in 2023.

The registration of inward foreign investments with authorized agent banks by the BSP is optional under the rules on foreign exchange transactions.

This registration is required if the investor intends to purchase foreign exchange from authorized agent banks for repatriation of capital and remittance of earnings.

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

These investments include PSE-listed securities, Peso-denominated government securities, Peso time deposits with a minimum tenor of 90 days, other Peso debt instruments, unit investment trust funds, and other instruments such as Exchange Traded Funds and Philippine Depositary Receipts.