Foreign investments registered with the BSP yield net outflows in August 2022

Transactions on foreign investments registered with the BSP, through AABs in August 2022 recorded net outflows of US$86 million, lower compared to the US$103 million net outflows recorded in July 2022. This resulted from the US$878 million gross outflows and US$792 million gross inflows for the month.

The US$792 million registered investments in August 2022 reflected an increase of 16.3 percent (or by US$111 million) compared to the US$681 million in July 2022.

Majority of investments (or 76.0 percent) registered were in PSE-listed securities [investments mainly in: (a) banks; (b) holding firms; (c) property; (d) food, beverage & tobacco; and (e) electricity, energy, power & water], while the remaining went to investments in Peso government securities (24.0 percent) and other instruments (less than 1 percent).

Investments for the month mostly came from the United Kingdom; United States (US); Hong Kong; Malaysia; and Luxembourg with combined share to total at 82.6 percent.

The US$878 million gross outflows for the month were larger by 12.0 percent (or by US$94 million) than the US$784 million recorded in July 2022.  The US received 72.5 percent of total outward remittances.

Year-on-year, registered investments in August 2022 decreased by 1.9 percent (or by US$15 million) from the US$807 million recorded in August 2021, while gross outflows were larger by 10.4 percent (or by US$82 million) than the outflows recorded for the same period last year (US$795 million).

The US$86 million net outflows in August 2022 were a reversal from the US$12 million net inflows recorded in August 2021.

Year-to-date transactions (1 January to 31 August 2022) for foreign investments registered with the BSP, through AABs yielded net inflows of US$539 million, a turnaround from the US$434 million net outflows noted for the same period last year (1 January to 31 August 2021).

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.