Transactions in foreign portfolio investments for the year 2010 yielded a net inflow of $4.6 billion, almost 12 times the $388 million net inflow for 2009, the highest recorded for the past seven years and surpassing the previous record of $3.5 billion in 2007.
Registered investments aggregated $13 billion, more than double last year’s $6.3 billion. Investments in PSE-listed shares reached $8.5 billion (65.2 percent of total), or 74.9% higher than 2009’s $4.8 billion. Major beneficiaries were banks ($1.7 billion); property companies ($1.6 billion); holding firms ($1.5 billion); telecommunication companies ($1.3 billion); and utility firms ($930 million).
The $4.5 billion balance of registered investments were in Peso GS – $4 billion, and Peso time deposits and money market instruments – $503 million.
Registration of foreign investments with the Bangko Sentral ng Pilipinas (BSP) is voluntary. It entitles the non-resident investor or his representative to buy foreign exchange from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of related earnings.
The United States, Singapore, the United Kingdom, Luxembourg and Hong Kong were the top five investor countries, contributing 81.7% to total registered investments.
Outflows amounted to $8.4 billion, and were mostly withdrawals from interim Peso deposits (93.3% of total).
Contributing to the strong inflows during the year ($13 billion) were two major initial public offerings (IPOs) by Cebu Air Inc. (PSE: CEB) and Nickel Asia Corp. (PSE: NIKL) , as well as the strong interest in government securities which brought investments of $4 billion. Placements in Peso time deposits also grew fourfold in 2010.
The bullish stock market performance in 2010 resulted from positive investor sentiment with the assumption of a new administration and strong macroeconomic fundamentals on the domestic front, inspiring greater confidence in the country vis-à-vis sovereign debt concerns in the euro zone, the benign economic outlook for the United States and China, and the effects of the geopolitical risks within the Korean peninsula.