MikeLigalig.com

27 May 2021
BSP-Registered Foreign Portfolio Investments Yield Net Outflows in April 2021

Press Release - BSP-registered foreign portfolio investments (FPIs)[1] for April 2021 yielded net outflows of US$374 million resulting from the US$1.0 billion gross outflows and US$651 million gross inflows for the month. This is lower compared to the net outflows of US$541 million recorded in March 2021.

The US$651 million registered investments for April 2021 reflected a 21.0 percent (or by US$173 million) decline compared to the US$824 million recorded in March 2021.  About 68.9 percent of investments registered were in PSE-listed securities (pertaining mainly to property companies, banks, holding firms, food, beverage and tobacco companies and transportation services firm) while the remaining 31.1 percent went to investments in Peso government securities. The United Kingdom, United States (US), Luxembourg, Singapore and Norway were the top five (5) investor countries for the month, with combined share to total at 84.7 percent.

The US$1.0 billion gross outflows for the month were lower by 24.9 percent (or by US$340 million) compared to the US$1.4 billion recorded for March 2021. The US received 72.8 percent of total outflows.

Developments during the month included investor reaction to easing inflation, contraction of the country’s gross domestic product in 2020, extension of local quarantine measures, progress of the government’s vaccination program and the continued rise of infections in the country.

Year-on-year, registered investments rose by 3.8 percent from the US$627 million recorded in April 2020.  Gross outflows, on the other hand, were lower than the outflows recorded a year ago (by US$1.3 billion or by 20.4 percent). Furthermore, the US$374 million net outflows is likewise lower compared to the US$660 million net outflows (or by 43.4 percent) recorded for the same period a year ago.

Transactions for BSP-registered FPIs from 1 January to 30 April 2021 yielded net outflows of US$857 million. This is lower compared to the US$2.1 billion net outflows noted for the same period last year (1 January to 30 April 2020) amid the ongoing impact of the COVID-19 pandemic to the global economy and financial system. This has been accompanied by international and domestic developments such as the new US administration, vaccine rollout and the reimposition of additional quarantine measures amid the surge in virus infection. Year-to-date transactions for investments in PSE-listed securities and other investment instruments resulted in net outflows, while those for Peso GS yielded net inflows.

Registration of inward foreign investments with the BSP is optional under the liberalized rules on foreign exchange transactions.  The issuance of a BSP registration document entitles the investor or his representative to buy foreign exchange from authorized agent banks 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 his investment but the foreign exchange will have to be sourced outside the banking system.


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