Foreign Portfolio Investments Reach $740M in February

Transactions during February 2011 resulted in a net inflow of $534 million, nearly thrice the $193 million net inflow in January due to lower outflows ($935 million in February 2011 against $1.3 billion in January 2011), according to the Bangko Sentral ng Pilipinas (BSP). The net inflow also represented almost four times the $139 million recorded a year ago due to more registered investments this year, $1.5 billion compared to only $500 million last year. This year’s rise in registered investments is backed by a surge in investments in Peso-denominated government securities (Peso GS), to $730 million of total (or 49.6%) against $90 million in 2010. Favorable yields have attracted foreign investor to Peso GS placements.

Investments in Philippine Stock Exchange (PSE)-listed shares amounted to $740 million (or 50.4% of total registered investments), twice the $370 million recorded in February 2010. The $730 million balance of registered investments were in Peso GS and Peso time deposits with minimum maturity of 90 days. Singapore, the United States, the United Kingdom, Luxembourg, and Hong Kong were the top five investor countries, collectively contributing 89.6% to total registered investments.

Outflows increased to $935 million from $362 million in February last year, the bulk of which were withdrawals from interim peso deposits. These are believed to be in reaction to the sharp rise in oil prices stemming from escalating violence in the Middle East and North Africa, fueling investor concerns.

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 or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of dividends/profits/earnings that accrue on the registered investment.

For the first two months of the year, transactions netted an inflow of $727 million, 135.6% higher compared to the same period last year. Registered investments reached $3 billion, or an increase of 179.3% from last year’s performance. Investments in PSE-listed shares of $1.4 billion exceeded the 2010 figure by 68.3%.  Major beneficiaries were banks ($336 million); holding firms ($248 million); utility companies ($241 million); property firms ($182 million); and telecommunication companies ($167 million).

Outflows likewise increased to $2.3 billion from $768 million and were mostly withdrawals from IPDs (92.4% of total).

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