Foreign Investments Registered with BSP yield net inflows in 2022

Transactions on foreign investments registered with the BSP, through authorized agent banks (AABs), in December 2022 recorded net inflows of US$93 million, lower compared to the US$489 million net inflows recorded in November 2022.

This resulted from the US$1.09 billion gross inflows and US$999 million gross outflows for the month.

The US$1.09 billion registered investments in December 2022 reflected an increase of 3.6 percent (or by US$38 million) compared to the US$1.05 billion registered in November 2022.

Majority of investments (74.0 percent) registered were in PSE-listed securities (investments mainly in holding firms, telecommunications, banks, property and food, beverage & tobacco, while the remaining went to investments in Peso government securities (GS – 26.0 percent) and other instruments (less than 1.0 percent).

Investments for the month mostly came from the United Kingdom (UK), Singapore, United States (US); Luxembourg and Netherlands with combined share to total at 80.5 percent.

The US$999 million gross outflows for the month were larger by 76.6 percent (or by US$433 million) than the US$566 million recorded in November 2022.  The US received 72.0 percent of total outward remittances.

Year-on-year, registered investments in December 2022 decreased by 18.0 percent (or by US$240 million) from the US$1.3 billion recorded in December 2021, while gross outflows were also lower by 25.2 percent (or by US$337 million) than the outflows recorded for the same period last year (US$1.3 billion).

The US$93 million net inflows in December 2022 is a reversal of the US$4 million net outflows recorded in December 2021.

For the whole year 2022, foreign investments registered with the BSP, through AABs, aggregated US$12.3 billion, reflecting a 9.4 percent decrease (or by US$1.3 billion) compared to the US$13.6 billion level in 2021.

These investments were predominantly investment in PSE-listed securities (78.2 percent) mostly in electricity, energy, power & water; property; holding firms; banks; and food, beverage & tobacco, while the balance was invested in Peso GS (21.6 percent) and other investments (less than 1.0 percent).

The UK, Singapore, US, Luxembourg, and Hong Kong were the top five (5) investor countries during the year, with combined share to total at 81.8 percent.

Recorded outflows of US$11.5 billion were lower compared to previous year’s US$14.2 billion (by 19.3 percent or US$2.7 billion).

Majority (or 95.0 percent) of these outflows represented capital repatriation while the remaining 5.0 percent pertained to remittance of earnings. The US continued to be the main destination of outflows with 72.9 percent of total.

Transactions on these registered foreign investments from 1 January to 31 December 2022 yielded net inflows of US$887 million, a turnaround from the US$574 million net outflows noted for the same period last year.

On a per investment instrument level, transactions in PSE-listed shares resulted in net inflows of US$179 million which is a reversal from the US$956 million net outflows last year, while those for Peso GS recorded net inflows of US$694 million, higher compared to last year’s US$398 million net inflows.

Registration of inward foreign investments delegated to AABs by the BSP is optional under the rules on foreign exchange (FX) transactions.

It is required only if the investor or its representative will purchase FX from AABs 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 FX will have to be sourced outside the banking system.

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^[i]   Formerly titled as BSP-registered foreign portfolio investments; These investments refer to the following inward foreign investments registered with AABs: 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.