Foreign investments registered with BSP yield net outflows in February 2023

Transactions on foreign investments registered with the BSP through authorized agent banks (AAB) in February 2023 resulted in net outflows of US$531 million resulting from the  US$1.2 billion gross outflows and US$680 million billion gross inflows for the month.

This is a turnaround compared to the net inflows recorded in January 2023 at US$292 million.

The US$680 million registered investments for the month are lower by 32.3 percent (or by US$324 million) compared to the US$1.0 billion recorded in January 2023.

Majority of investments (or 79.6 percent) registered were in PSE-listed securities (investments mainly in banks, holding firms, property, food, beverage and tobacco and electricity, energy, power & water), while the remaining went to investments in Peso government securities (20.4 percent) and in other instruments (less than 1.0 percent).

The top five (5) investor countries for the month were the United Kingdom, United States, Luxembourg, Hong Kong, and Singapore with combined share to total at 82.5 percent.

The US$1.2 billion gross outflows for the month were higher by 70.2 percent (or by US$499 million) compared to gross outflows recorded for January 2023 (US$712 million). The US received 67.3 percent of total outward remittances.

Year-on-year, registered investments in February decreased by 28.0 percent (or by US$265 million) from the US$945 million recorded in February 2022, while gross outflows were larger by 80.7 percent (or by US$541 million) than the outflows recorded a year ago (US$670 million).

The US$531 million net outflows in February 2023 are a reversal compared to the US$274 million net outflows recorded for the same period a year ago.

Year-to-date transactions (01 January to 28 February 2023) for foreign investments registered with the BSP, through AABs yielded net outflows of US$239 million, a turnaround from the US$289 million net inflows noted for the same period last year (01 January to 28 February 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.