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By APD writer Melo M. Acuna
MANILA, Jan. 20 (APD) – Registered foreign portfolio investments for 2017 amounted to US$16.1 billion and was 8.9 percent lower than the US$ 17.6 billion level in 2016.
According to a Bangko Sentral ng Pilipinas statement, on a monthly basis, the lower gross inflows were recorded in August (US$936 million) while the highest was noted in June (US$2.0 billion).
On a quarterly basis, the largest inflows were noted in the second quarter at US$4.8 billion with represented 30.0 percent of the total for the year.
Bangko Sentral ng Pilipinas said this could be attributed to positive investor sentiment arising from the World Bank’s view that the Philippines will continue to be a top performer in the region, and the conflict resolution in Marawi City.
It added these were further supported by accelerated net foreign buying as well as the approval by Congress of the first phase of the tax reform package.
Outflows for the year amounting to US$16.3 billion were much lower compared to the US$ 17.2 billion in 2016.
About 96.4 percent of the outflows represented capital repatriation while the remaining 3.6 percent pertained to earnings.
Transactions for 2017 resulted in overall net outflows of US$205 million, in contrast to net inflows of US$404 million noted for 2016.
The statement further said while net outflows were noted starting the first quarter of the year (US$568 million) attributable to international and domestic developments including the increase in interest rates in the United States and the closure order for several mining companies in the Philippines, the figure has subsequently declined as investors reacted positively to the various developments in the country, including the approval of the first phase of the tax reform program of the Government.
Portfolio investments registered during the year were mainly in PSE-listed securities (81.9 percent) and Peso government securities (GS) (17.5 percent).
Net inflows were noted for other Peso debt instruments and unit investment trust finds, net outflows were recorded for PSE-listed securities, Peso GS and Peso time deposits.
The United Kingdom, the United States, Singapore, Luxemburg and Malaysia were the top five investor countries during the year with the combined share to the total of 74.8 percent.
The United States continued to be the main destination of outflows, receiving 80.2 percent of the total.
Registration of inward foreign investments with the Bangko Sentral ng Pilipinas (BSP) is optional under the liberalized rules on foreign exchange transactions.
The issuance of a BSP registration document entitles the investor or his representrative 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.
According to the statement, without such registration, the foreign investor can still repatriate capital and remit earnings on his invesment but the foreign exchange will have to be sourced outside the banking system.
(ASIA PACIFIC DAILY)
