Foreign investments registered with BSP yield net outflows in May 2023

Transactions on foreign investments registered with the Bangko Sentral ng Pilipinas (BSP), through AABs, in May 2023 recorded net outflows of US$124 million, resulting from gross outflows of US$969 million and gross inflows of US$845 million.

This is lower by 64.6 percent and by 54.0 percent than the net outflows recorded in April 2023 (US$352 million) and in May 2022 (US$270 million), respectively.

The US$845 million registered investments for the month are higher by 18.5 percent (or by US$132 million) compared to the US$713 million recorded in April 2023.

Majority of registered investments (US$589 million or 69.7 percent) were in PSE-listed securities (investments mainly in banks, food, beverage and tobacco, holding firms, property, and transportation services), while the remaining were in Peso government securities (US$256 million or 30.3 percent) and in other instruments [less than one (1) percent].

The top five (5) investor countries for the month were the United Kingdom (UK), United States (US), Singapore, Luxembourg and Hong Kong with combined share to total at 86.6 percent.

The US$969 million gross outflows for the month are lower by nine (9) percent (or by US$95 million) compared to those recorded in April 2023 (US$1.1 billion).

The US received 66.2 percent of total outward remittances.

Year-on-year, registered investments in May 2023 are lower than the US$966 million recorded in May 2022 by 12.5 percent (or by US$121 million), while gross outflows also dropped by 21.6 percent (or by US$267 million) vis-à-vis the gross outflows posted in May 2022 (US$1.2 billion).

The US$124 million net outflows in May 2023 is an improvement from the US$270 million net outflows recorded for the same period a year ago.

Year-to-date transactions (01 January to 31 May 2023) for foreign investments registered with the BSP, through AABs, yielded net outflows of US$805 million which is a reversal of the US$1.1 billion net inflows noted for the same period last year (01 January to 31 May 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.