Foreign investments registered with BSP yield net outflows in October 2023

Transactions on foreign investments registered with the Bangko Sentral ng Pilipinas (BSP), through authorized agent banks* (AABs) in October 2023 recorded net outflows of US$328 million resulting from the US$1.3 billion gross outflows and the gross inflows of US$954 million for the month. The recorded net outflows are smaller than the net outflows posted in September 2023 (US$698 million).

The US$954 million registered investments for the month are higher by US$67 million (or by 7.5 percent) compared to the US$888 million recorded in September 2023.

During the month, 60.5 percent of registered investments were in PSE-listed securities (US$577 million) [most of which were investments made in: (a) banks; (b) property; (c) holding firms; (d) casinos and gaming; and (e) food, beverage and tobacco], while about 39.5 percent were in Peso GS (US$377 million) and the remaining investments [less than one (1) percent] were in other instruments.

Investments for the month mostly came from the United Kingdom, United States, Luxembourg, Singapore, and Hongkong with combined share to total at 88.0 percent.

The US$1.3 billion gross outflows for the month were lower by US$303 million (or by 19.1 percent) compared to the gross outflows recorded for September 2023 (US$1.6 billion). The US remains to be the top destination of outflows, receiving US$794 million (or 61.9 percent) of total outward remittances.

Year-on-year, registered investments in October 2023 are higher than the US$645 million recorded in October 2022 (by US$310 million or 48.1 percent), while gross outflows also increased by US$721 million (or by 128.6 percent) vis-à-vis the gross outflows posted in October 2022 (US$561 million).  The US$328 million net outflows in October 2023 are a reversal of the US$83 million net inflows recorded for the same period a year ago.

Year-to-date transactions (01 January to 31 October 2023) for foreign investments registered with the BSP, through AABs, yielded net outflows of US$715 million, a turnaround from the US$305 million net inflows noted for the same period last year (01 January to 31 October 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 investments but the FX will have to be sourced outside the banking system.

*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.