Portfolio funds more known as “hot” or speculative money flowed out on net basis in February, reversing the net inflow of such funds in January, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.
It reported transactions on foreign investments registered with the BSP through so-called authorized agent banks or AABs in February 2023 showing net outflows of $531 million resulting from the $1.2 billion gross outflows and $680 million gross inflows for the month.
This was a turnaround compared to the net inflows recorded in January 2023 at $292 million.
The $680 million registered investments for the month proved lower by 32.3 percent (or by $324 million) compared to the $1 billion recorded in January 2023. The 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 and water), while the remaining went to investments in peso government securities (20.4 percent) and in other instruments (less than 1 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 $1.2 billion gross outflows for the month were higher by 70.2 percent (or by $499 million) compared to gross outflows recorded for January 2023 ($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 $265 million) from the $945 million recorded in February 2022, while gross outflows were larger by 80.7 percent (or by $541 million) than the outflows recorded a year ago ($670 million). The $531 million net outflows in February 2023 are a reversal compared to the $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 $239 million, a turnaround from the $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.
