SHORT-TERM investments made by foreign investors hit the net outflow territory in the first quarter of 2023, according to the Bangko Sentral ng Pilipinas (BSP).
Data showed hot money net outflows reached $309.42 million, with March posting net outflows worth $70 million.
This is the second time this year when the country recorded net outflows. Data showed February’s net outflows amounted to $531.27 million.
“The $1.33-billion gross outflows for the month are larger by 9.5 percent [or by $115 million] compared to those recorded in February 2023 [$1.2 billion]. The US received 67.2 percent of total outward remittances,” BSP said.
Hot money investments or foreign investments registered with the BSP through Authorized Agent Banks (AABs) included Philippine Stock Exchange-listed securities and peso-denominated government securities.
The list also included peso time deposits with banks with minimum tenor of 90 days; other Peso debt instruments; unit investment trust funds; and other instruments such as Exchange Traded Funds and Philippine Depositary Receipts.
The BSP, however, said the $1.26-billion registered investments for the month are higher by 84.7 percent or by $576 million compared to the $680 million recorded in February 2023.
“Majority of investments [or 64.6 percent] registered were in PSE-listed securities [investments mainly in banks, property, holding firms, food, beverage and tobacco and transportation services], while the remaining went to investments in Peso government securities [35.4 percent] and in other instruments [less than 1 percent],” BSP said.
Listed as the top five investor countries for the month were the United Kingdom, United States, Singapore, Luxembourg and Norway, with a combined share to total at 86.4 percent.
Year-on-year, registered investments in March 2023 are lower than the $1.28 billion recorded in March 2022 (by 1.7 percent or by $22 million), while gross outflows are lower by 16.2 percent (or by $257 million) vis-Ă -vis the gross outflows recorded for March 2022 ($ 1.6 billion).
“The $70-million net outflows in March 2023 is an improvement from the $305-million net outflows recorded for the same period a year ago,” 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.
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