BSP-registered foreign portfolio investments yield net outflows in May 2022

Bangko Sentral ng Pilipinas (BSP)-registered foreign portfolio investments (FPIs)[i] in May 2022 yielded net outflows of US$270 million resulting from the US$1.2 billion gross outflows and US$966 million gross inflows for the month.

This is a reversal from the net inflows of US$1.4 billion recorded in April 2022.

The US$966 million registered investments for May 2022 reflected a decrease of 55.7 percent (or by US$1.2 billion) compared to the US$2.2 billion recorded in April 2022.

Majority of investments (or 80.1 percent) registered were in PSE-listed securities [investments mainly in: (a) information technology; (b) banks; (c) property; (d); holding firms; and (e) telecommunications], while the remaining went to investments in Peso government securities (18.3 percent) and other portfolio investments (1.7 percent). Investments for the month mostly came from: (a) the United Kingdom; (b) United States (US); (c) Singapore; (d) Luxembourg; and (e) Hong Kong with combined share to total at 76.2 percent.

The US$1.2 billion gross outflows for the month were larger by 50.1 percent (or by US$413 million) than the US$823 million recorded in April 2022. The US received 80.7 percent of total remittances.

Year-on-year, registered investments in May 2022 decreased by 33.8 percent (or by US$493 million) from the US$1.5 billion recorded in May 2021, while gross outflows were larger by 18.7 percent (or by US$194 million) than the outflows recorded for the same period last year (US$1.0 billion). The US$270 million net outflows in May 2022 is a reversal from the US$417 million net inflows recorded in May 2021.

Year-to-date transactions (1 January to 31 May 2022) for BSP registered FPIs yielded net inflows of US$1.1 billion, a turnaround from the US$441 million net outflows noted for the same period last year (1 January to 31 May 2021).

Registration of inward foreign investments with the BSP is optional under the rules on foreign exchange transactions. It is required only if the investor or its representative will purchase 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 its investment but the foreign exchange will have to be sourced outside the banking system.

[i] Refer to inward foreign investments in 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