Record High Foreign Portfolio Investments Noted in 2013
Manila–(PHStocks)–Bangko Sentral ng Pilipinas (BSP)–For 2013, net inflows from foreign portfolio investments reached $4.2 billion, reflecting an 8 percent growth from the previous year’s $3.9 billion level. BSP records show that registered investments surged to $28.4 billion, the highest recorded since 1999, outpacing the $18.5 billion recorded in 2012 by 53.7 percent.
This may be attributed to the following: (i) the country’s sound macro-economic fundamentals; (ii) sustained high growth in the first three quarters; (iii) the investment grade ratings given to the Philippines by three (3) international rating agencies (Fitch Ratings, Standard & Poor’s, and Moody’s Investor Service) which helped sustain investor confidence in the Philippines; and (iv) the Eurozone and United States crises which diverted funds to emerging economies.
There was a steady stream of investment inflows of more than $2 billion a month (except in the ghost month of August, believed to be unlucky for business, and in December due to the announcement of the forthcoming tapering of the United States quantitative easing program). Investments for the year consisted of PSE-listed securities (74.7 percent), Peso GS (23 percent), Peso time deposits (2 percent) and Peso-denominated debt instruments (0.3 percent). For PSE-listed securities, major beneficiaries of funds were: holding firms; banks; property companies; food, beverage and tobacco companies; and telecommunication firms.
Total outflows for the year amounted to $24.2 billion compared to $14.6 billion in 2012. Outflows accelerated from March until June and in November, with the highest level recorded at $2.8 billion in June, reflecting the knee-jerk reaction of investors to the string of news on the possible tapering of the US quantitative easing program starting in late May 2013.
The top five (5) investor countries in 2013 are the United Kingdom, the United States, Singapore, Luxembourg, and Hong Kong, with combined share to total at 83.5 percent.
Registration of inward foreign investments with the BSP is voluntary. It entitles the 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 earnings that accrue on the registered investment.