Transactions on BSP-registered foreign portfolio investments (FPIs) for 2019 yielded net outflows of $1.9 billion as a result of the $18.5 billion outflows and $16.6 billion inflows for the year.
The net outflows of $1.9 billion may be broken down to net outflows in the following instruments: Philippine Stock Exchange (PSE)-listed shares worth $1.7 billion; Peso government securities amounting to $228 million; and other portfolio instruments worth$22 million.
Recorded outflows of $18.5 billion from BSP-registered FPIs for 2019 were higher compared to $14.8 billion the previous year. Majority or 97.1 percent of these outflows represented capital repatriation while the remaining 2.9 percent pertained to remittance of earnings. The United States received 75.1 percent of total outflows.
Similarly, BSP-registered FPIs for 2019 aggregating $16.6 billion, reflected a 3.5 percent increase compared to the $16.0 billion level in 2018.
These FPIs were predominantly securities listed in the PSE, with the balance invested in Peso GS and other portfolio instruments.
The United Kingdom, the US, Singapore, Malaysia, and Hong Kong were the top five investor countries during the year, with combined share to total of 74.3 percent.
Developments for the year included: (i) ongoing trade tension between the US and China; (ii) passage of the rice tariffication law; (iii) the holding of the country’s mid-term elections; (iv) easing domestic inflation; (v) heightened protests in Hong Kong; (vi) attacks on Saudi Aramco’s oil facilities in Saudi Arabia which triggered the largest recent jump in oil prices; (vii) BSP’s decision to reduce the reserve requirement ratio for universal/commercial and thrift banks; (viii) the rebalancing of the Morgan Stanley Capital International Philippines Index to reflect its new weightings; (ix) President Duterte’s strong views on the alleged onerous provisions of Maynilad Water Services, Inc. and Manila Water Co., Inc.’s concession agreements; and (x) the US House of Representatives vote to impeach President Trump.
In contrast to 2019, registered FPI transactions for 2018 yielded net inflows of $1.2 billion.
This is mainly attributed to a large investment in a holding company registered in 2018 accompanied by investor reaction to the passage of the first phase of the government’s tax reform program.
Transactions during the first quarter of 2019 yielded net inflows of $363 million, while all other quarters resulted in net outflows; some developments for the second
quarter of the year included: (i) the delayed approval of the 2019 national government budget; (ii) investor reaction to the April earthquake that jolted parts of Luzon and Visayas; and (iii) the holding of the country’s midterm elections. It may be noted that quarterly transactions in 2018 recorded net inflows for the first and fourth quarters, while net outflows were recorded for the second and third quarter
