Short-term investments into the Philippines registered a net outflows in August, reversing the net inflows registered in the same month last year, data from the Bangko Sentral ng Pilipinas (BSP) showed.
Transactions on foreign investments registered with the BSP, through authorized agent banks, recorded net outflows of $86 million, a reversal of the $11.51 million inflows recorded a year earlier, the central bank reported on Thursday, Sept. 29. This developed as BSP recorded $878 million gross outflows and $792 million gross inflows.
Month-on-month, foreign portfolio investments or “hot money” outflows dropped compared with the $103 million net outflows in July.
Total investments in August reflected an increase of 16.3 percent compared to the $681 million in July 2022.
Majority of investments (76 percent) registered were in Philippine Stock Exchange-listed securities, while the remaining went to investments in peso government securities (24 percent) and other instruments (less than one percent).
Investments for the month mostly came from the United Kingdom; US; Hong Kong; Malaysia; and Luxembourg with combined share to total at 82.6 percent.
Meanwhile, gross outflows were larger by 12 percent than the $784 million recorded in July. The US received 72.5 percent of total outward remittances.
Year-on-year, registered investments in August decreased by 1.9 percent from the $807 million recorded in the previous year, while gross outflows were larger by 10 percent than the outflows recorded for the same period last year of $795 million.
The $86 million net outflows in August were a reversal from the $12 million net inflows recorded in the same month last year.
Year-to-date transactions, foreign investments registered with the BSP yielded net inflows of $539 million, a turnaround from the $434 million net outflows noted for the same period last year.
Registration of inward foreign investments delegated to AABs 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 AABs 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 its investment but the FX will have to be sourced outside the banking system.