‘Hot money’ outflows narrow in July — BSP

Transactions on foreign investments registered with the BSP, through AABs in July 2022 recorded net outflows of US$103 million, lower compared to the US$342 million net outflows recorded in June 2022.

This resulted from the US$784 million gross outflows and US$681 million gross inflows for the month.

The US$681 million registered investments in July 2022 reflected a decrease of 34.5 percent (or by US$358 million) compared to the US$1.0 billion recorded in June 2022.

Majority of investments (or 64.8 percent) registered were in PSE-listed securities (investments mainly in holding firms; food, beverage and tobacco; property; banks; and transportation services), while the remaining went to investments in Peso government securities (35.2 percent).

Investments for the month mostly came from the United Kingdom; United States (US); Singapore; Hong Kong; and Luxembourg with combined share to total at 84.7 percent.

The US$784 million gross outflows for the month were lower by 43.2 percent (or by US$597 million) than the US$1.4 billion recorded in June 2022.

The US received 66.1 percent of total outward remittances.

Year-on-year, registered investments in July 2022 decreased by 6.7 percent (or by US$49 million) from the US$730 million recorded in July 2021, while gross outflows were smaller by 26.7 percent (or by US$286 million) than the outflows recorded for the same period last year (US$1.1 billion).

The US$103 million net outflows in July 2022 were smaller compared to the US$340 million net outflows recorded in July 2021.

Year-to-date transactions (1 January to 31 July 2022) for foreign investments registered with the BSP, through AABs yielded net inflows of US$625 million, a turnaround from the US$446 million net outflows noted for the same period last year (1 January to 31 July 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.

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* 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 portfolio investments such as Exchange Traded Funds and Philippine Depositary Receipts.​