Foreign investments registered with BSP yield net inflows in August 2023

Transactions on foreign investments registered with the Bangko Sentral ng Pilipinas (BSP), through authorized agent banks (AABs)[1], in August 2023 recorded net inflows of US$153 million resulting from the US$1.4 billion gross inflows and the gross outflows of US$1.3 billion for the month.

The recorded net inflows are smaller compared to the net inflows posted in July 2023 amounting to US$962 million.

The US$1.4 billion registered investments for the month are lower by US$136 million (or by 8.6 percent) compared to the US$1.6 billion recorded in July 2023.

Majority of registered investments were in PSE-listed securities (US$1.1 billion or 74.2 percent) [most of which were investments made in: (a) banks; (b) property; (c) holding firms; (d) food, beverage and tobacco; and (e) transportation services], while the remaining were in Peso government securities (US$372 million or 25.8 percent) and in other instruments [less than one (1) percent].

Investments for the month mostly came from Japan, the United Kingdom, United States, Luxembourg; and Singapore with combined share to total at 88.9 percent.

The US$1.3 billion gross outflows for the month were higher by US$673 million (or by 109.5 percent) compared to the gross outflows recorded for July 2023 (US$614 million).

The US remains to be the top destination of outflows, receiving US$762 million (or 59.2 percent) of total outward remittances.

Year-on-year, registered investments in August 2023 are higher than the US$792 million recorded in August 2022 (by US$649 million or 82.0 percent), while gross outflows increased by US$409 million (or by 46.6 percent) vis-à-vis the gross outflows posted in August 2022 (US$878 million).  The US$153 million net inflows in August 2023 were a reversal from the US$86 million net outflows recorded for the same period a year ago.

Year-to-date transactions (01 January to 31 August 2023) for foreign investments registered with the BSP, through AABs, yielded net inflows of US$311 million which is smaller compared to the US$589 million net inflows noted for the same period last year (01 January to 31 August 2022).

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.

[1] 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.