Foreign investments registered with BSP yield net inflows in January 2023

Transactions on foreign investments registered with the Bangko Sentral ng Pilipinas (BSP), through Authorized Agent Banks (AABs), in January 2023 recorded net inflows of US$292 million, an improvement of US$199 million from the US$93 million net inflows recorded in December 2022.

This resulted from the US$1.0 billion gross inflows and US$712 million gross outflows for the month.

The US$1.0 billion registered investments in January 2023 reflected a decrease of 8.1 percent (or by US$88 million) compared to the US$1.1 billion registered in December 2022.

Majority of investments (or 62.8 percent) registered were in Philippine Stock Exchange (PSE)-listed securities (investments mainly in banks, holding firms, property, food, beverage & tobacco, and electricity, energy, power & water), while the remaining went to investments in Peso government securities (37.2 percent) and in other instruments (less than 1.0 percent).

Investments for the month mostly came from the United Kingdom, United States, Singapore, Luxembourg and Hong Kong, with combined share to total at 83.8 percent.

The US$712 million gross outflows for the month were lower by 28.8 percent (or by US$287 million) than the US$999 million recorded in December 2022. The US received 69.4 percent of total outward remittances.

Year-on-year, registered investments in January 2023 increased by 37.3 percent (or by US$272 million) from the US$731 million recorded in January 2022, while gross outflows is slightly lower by 0.7 percent (or by US$5 million) than the outflows recorded for the same period last year (US$717 million).

The US$292 million net inflows in January 2023 is about 20 times larger compared to the US$15 million net inflows recorded in January 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.