Speculative foreign investments that exited on net basis in the first three months last year returned in the first quarter this year and helped fuel a 15 percent turnaround in net foreign inflows totaling USD377.42 million.
According to the Bangko Sentral ng Pilipinas (BSP), this resulted from gross foreign fund inflows of USD4.191 billion in those three months this year versus gross outflows of only USD3.814 billion.
The returning foreign funds were invested in assets traded at the Philippine Stock Exchange and in local currency denominated bonds issued by the government by fund managers in the United Kingdom, Singapore, the United States, Switzerland and Luxembourg.
Regulations require such investment first be registered with the BSP to earn the right to tap into the country’s foreign currency holdings when it comes time for the fund managers to repatriate their investments. Unregistered investors may not tap the banks for their foreign currency requirements.
Foreign investments registered with the BSP yielded net outflows in March this year resulting from the USD1.6 billion gross outflows and USD1.4 billion gross inflows. This wa a reversal from the USD689 million net inflows recorded in February 2024.
The USD1.4 billion registered investments for the month were lower by USD140 million (or by 9.1 percent) compared to the USD1.5 billion recorded in February 2024.
During the month, 56.7 percent of registered investments were in PSE-listed securities (USD798 million) [most of which were investments made in: (a) banks; (b) holding firms; (c) property; (d) transportation services; and (e) food, beverage and tobacco], while the remaining 43.3 percent were in in Peso government securities (USD610 million).
The USD1.6 billion gross outflows for the month were higher by USD785 million (or by 91.4 percent) compared to the gross outflows recorded for February 2024 (USD859 million). The US remains to be the top destination of outflows, receiving USD887 million (or 53.9 percent) of total outward remittances.
Year-on-year, registered investments in March 2024 were higher than the USD1.3 billion recorded in March 2023 (or by USD152 million or 12.1 percent), while gross outflows increased by USD318 million (or by 24.0 percent) vis-à-vis the gross outflows posted in March 2023 (USD1.3 billion). The USD236 million net outflows in March 2024 awee larger compared to the net outflows recorded for the same period a year ago (USD70 million).
Year-to-date transactions in foreign investments yielded net inflows of USD377 million, a turnaround compared to the USD328 million net outflows noted for the same period last year, the BSP said.
