Foreign investments in the PHL show net inflows in May 2024

The Bangko Sentral ng Pilipinas (BSP) reported net inflows of $43 million in foreign investments registered through authorized agent banks* for May 2024.

The positive figure comes after the country recorded $1.1 billion in gross inflows and $1.0 billion in gross outflows, reversing the $312 million net outflows from April 2024.

The registered investments for May 2024, totaling $1.1 billion, marked a 15.2% increase from April’s $914 million.

Of these investments, 65% were in Philippine Stock Exchange (PSE)-listed securities, amounting to $685 million. These investments were mainly directed towards banks, holding firms, property, transportation services, and mining sectors.

The remaining 35% went into Peso government securities ($368 million), with a small fraction allocated to other instruments.

The bulk of these investments originated from the United Kingdom, the United States, Singapore, Luxembourg, and Norway, which together accounted for 86.1% of the total.

Gross outflows for May 2024 stood at $1.0 billion, a 17.6% decrease from April’s $1.2 billion. The United States was the top destination for these outflows, receiving $575 million, or 57% of the total remittances.

Year-on-year, May 2024 saw a significant increase in registered investments, which rose by $208 million (24.6%) from the $845 million recorded in May 2023.

Gross outflows also saw a slight rise of $41 million (4.2%) compared to $969 million in May 2023. The net inflows of $43 million in May 2024 marked a substantial improvement from the $124 million net outflows in the same period last year.

From January 1 to May 31, 2024, foreign investments registered with the BSP yielded net inflows of $108 million. This marks a turnaround from the $805 million net outflows recorded in the same period of the previous year.

The BSP’s registration of inward foreign investments through authorized agent banks is optional under the rules on foreign exchange transactions.

However, it becomes necessary if the investor or its representative intends to purchase foreign exchange from authorized agent banks for repatriating capital and remitting earnings.

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

*These investments refer to the following inward foreign investments registered with authorized agent banks: PSE-listed securities; Peso-denominated government securities; Peso time deposits with banks with 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. In addition, registration of said investments with the BSP, through the authorized agent banks, may not necessarily coincide with either trade or settlement date of the underlying transaction, and thus, such registration may be effected even after the actual foreign investment transaction has long been completed.