Foreign investments registered with BSP through AABs yield net outflows in September 2022

Transactions on foreign investments registered with the Bangko Sentral ng Pilipinas (BSP), through Authorized Agent Banks (AABs)[i], in September 2022 recorded net outflows of US$367 million, larger compared to the US$86 million net outflows recorded in August 2022.

This resulted from the US$1.3 billion gross outflows and US$892 million gross inflows for the month.

The US$892 million registered investments in September 2022 reflected an increase of 12.7 percent (or by US$100 million) compared to the US$792 million registered in August 2022.

Majority of investments (or 87.1 percent) registered were in PSE-listed securities [investments mainly in:

(a) electricity, energy, power & water;

(b) food, beverage & tobacco;

(c) property;

(d) banks; and

(e) holding firms], while the remaining went to investments in Peso government securities (12.9 percent) and other instruments (less than 1.0 percent).

Investments for the month came from Singapore, the United Kingdom, United States (US), Luxembourg and British Virgin Islands with combined share to total at 79.9 percent.

The US$1.3 billion gross outflows for the month were larger by 43.4 percent (or by US$381 million) than the US$878 million recorded in August 2022.

The US received 72.5 percent of total outward remittances.

Year-on-year, registered investments in September 2022 decreased by 25.0 percent (or by US$297 million) from the US$1.2 billion recorded in September 2021, while gross outflows were larger by 3.8 percent (or by US$47 million) than the outflows recorded for the same period last year (US$1.2 billion).

The US$367 million net outflows in September 2022 were larger than the US$24 million net outflows recorded in September 2021.

Year-to-date transactions (1 January to 30 September 2022) for foreign investments registered with the BSP, through AABs, yielded net inflows of US$222 million, a turnaround from the US$459 million net outflows noted for the same period last year (1 January to 30 September 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.

[i]   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 instruments such as Exchange Traded Funds and Philippine Depositary Receipts.