Foreign portfolio investments posted net inflows of $1.23 million in June, a reversal of the $342-million net outflows a year ago, the Bangko Sentral ng Pilipinas said Thursday.
This was the first net inflows recorded following four consecutive months of net outflows, the BSP said. The $889-million gross inflows in June narrowly surpassed the gross outflows of $888 million.
Portfolio investments are also called “hot money” because of the ease they are invested in and taken out of domestic financial markets.
Data from the BSP showed registered investments in June went up by $45 million or 5.3 percent from $845 million in May.
Most registered investments ($700 million or 78.7 percent) were in Philippine Stock Exchange-listed securities mainly in property, banks, holding firms, food, beverage and tobacco and telecommunications. The rest went to peso government securities ($190 million or 21.3 percent) and in other instruments (less than 1 percent).
The top five investor countries in June were the United Kingdom, the United States, Luxembourg, Singapore, and Switzerland with combined share to total of 84.2 percent.
The BSP said despite June’s positive performance, foreign portfolio investments in the first six months yielded net outflows of $803.33 million, a reversal of the $778.28-million net inflows a year earlier.
Registration of inward foreign investments delegated to authorized agent banks by the BSP is optional under the rules on foreign exchange transactions.
It is required only if the investor or its representative will purchase 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.
The BSP said without such registration, the foreign investor can still repatriate capital and remit earnings on its investment, but the foreign exchange will have to be sourced outside the banking system.
Foreign portfolio investments posted net inflows of $887 million in 2022, a reversal of the $574-million net outflows in 2021, as fund managers remained confident in the country’s macroeconomic fundamentals despite uncertainties on the external front.
The BSP retained its forecast for registered foreign portfolio investments this year and next at $2.5 billion and $3.5 billion, respectively.