By Lee C. Chipongian
The Bangko Sentral ng Pilipinas (BSP) said residents’ portfolio investments abroad went up by 4.7 percent to $12 billion as of end-June 2017 compared to end-2016’s $11.5 billion.
These portfolios are broken down as $11 billion of debt securities and $983.6 million holdings of equity securities issued by unrelated non-residents. The BSP considers a non-resident counterparty as unrelated to the resident enterprise if the counterparty has an equity interest of less than 10 percent in the enterprise, or vice-versa.
Based on its latest coordinated portfolio investment survey, the BSP said the growth in residents’ equity securities’ holdings which increased by 61.3 percent boosted the increase in foreign portfolio investments during the period.
On a year-on-year basis, residents’ portfolio investments abroad fell by 4.4 percent “on account of the decrease in residents’ holdings of short-term debt securities (by -47.7 percent), specifically treasury bills (by -61.8 percent),” said the BSP.
In terms of contribution to growth, holdings of short-term debt securities contributed 11.8 percentage points of which 14.9 percentage points is accounted for by treasury bills to the 4.4 percent aggregate decline in residents’ foreign portfolio investments, the report added.
The BSP said the US is still the top country-issuer of securities held by residents. Securities issued by the US comprised the biggest share of residents’ portfolio investments abroad, at 32.1 percent or $3.81 billion. This was however lower by 37.7 percent and 45.6 percent, respectively, from end-2016 and end-June 2017.
“Holdings of securities by residents continue to be predominantly denominated in US dollar (and) residents’ foreign portfolio investments remained predominantly denominated in US dollars at 95.5 percent,” said the BSP.
Foreign governments, in the meantime, contributed the largest share of non-resident issuers of securities held by residents, said the central bank.
“By sector of issuer, residents’ investments in securities issued by foreign governments accounted for the largest share at 37 percent or $4.45 billion… followed by foreign banks whose issuances accounted for 32.4 percent or $3.89 billion,” said the BSP.