Hot money post net outflows

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    Transactions on BSP-registered foreign portfolio investments for January 2020 yielded net outflows of $486 million resulting from the $1.7 billion outflows and $1.2 billion inflows for the month.

    This is higher compared to the recorded net outflows in December 2019 amounting to $321 million.

    The $1.2 billion registered investments reflected a 10.9 percent increase from the $1.1 billion figure in December 2019.

    About 65.9 percent of investments registered during the month were in PSE-listed securities while the remaining 34.1 percent balance went to investments in Peso GS.

    The United Kingdom, the United States, Singapore, Luxembourg, and Hong Kong were the top five investor countries for the month, with combined share to total at 79.0 percent.
    Outflows for January 2020 worth $1.7 billion were higher compared to the level recorded for December 2019 worth $1.4 billion.

    The US received 62.1 percent of total outflows.

    Developments for the month included: continuing geopolitical tensions between the US and Iran; ongoing trade negotiations between the US and China; renegotiation of the contracts of the country’s water concessionaires; and investor concerns on the spread of the novel coronavirus originating from Wuhan, China.

    Year-on-year, registered investments were 40.1 percent lower than the $2.1 billion level recorded in January 2019, while gross outflows were higher than the outflows recorded a year ago.  In contrast, net inflows of $763 million were recorded for the same period a year ago.

    Registration of inward foreign investments with the BSP is optional under the liberalized rules on foreign exchange transactions.

    The issuance of a BSP registration document 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.  Without such registration, the foreign investor can still repatriate capital and remit earnings on his investment but the foreign exchange will have to be sourced outside the banking system.