Hot money or foreign investments registered with the central bank in September, through Authorized Agent Banks (AABs), recorded its highest level of outflows in almost three years.
Based on data from the Bangko Sentral ng Pilipinas (BSP), portfolio investments recorded $698 million in net outflows in September—the highest since the $1-billion net outflows recorded in May 2020.
With this, foreign investments registered with the BSP, through AABs, also recorded net outflows worth $387 million in January to September.
“The recorded net outflows were a reversal of the net inflows posted in August 2023 amounting to $153 million,” BSP said. “[In January to September, these] were a reversal compared to the $222 million net inflows noted for the same period last year.”
The data showed gross outflows in September increased to $1.59 billion, $326 million or 25.9 percent more than the gross outflows worth $1.3 billion in September 2022.
The registered investments in September 2023 were lower than the $892 million recorded in September 2022 or by $4 million or 0.5 percent.
During the month, 52.1 percent of registered investments were in Philippine Stock Exchange-listed securities worth $462 million. Most of these were investments made in banks; holding firms; property; food, beverage and tobacco; and utilities companies.
BSP data said the remaining were in Peso government securities worth $425 million and accounted for 47.9 percent of the total investments.
“Investments for the month mostly came from the United Kingdom, Singapore, United States, Luxembourg and Switzerland with combined share to total at 88.5 percent,” BSP said.
The BSP said the registration of inward foreign investments delegated to AABs by the BSP is optional under the rules on foreign exchange (FX) transactions.
It is required only if the investor or its representative will purchase FX 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.