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Monday, July 15, 2024

Foreign investors withdrew $312-m funds from PH in April

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The Philippines registered $312 million in net outflows of foreign portfolio investments or hot money in April 2024, higher than the $236-million net withdrawals in March, the Bangko Sentral ng Pilipinas (BSP) said Friday.

It said that on a year-on-year basis, the April 2024 net outflows were smaller than $352 million net withdrawals in April 2023.

The BSP said despite the net withdrawals in April, the four-month foreign investments yielded net inflows of $65 million, a turnaround from the $680-million net outflows seen in the same period last year.

The transactions on foreign investments registered through authorized agent banks (AABs) showed gross outflows of $1.2 billion and gross inflows of $914 million in April 2024.

Hot money refers to foreign funds temporarily parked in the equities and money markets to take advantage of short-term interest.

The BSP said the $914-million registered investments in April went down 35.1 percent from $1.4 billion recorded in March 2024. About 59.5 percent of registered investments were in Philippine Stock Exchange-listed securities amounting to $544 million, while the remaining 40.5 percent were in peso government securities worth $370 million.

Investments mostly came from the United States, the United Kingdom, Singapore, Luxembourg and Hong Kong with a combined share of 87.9 percent.

The BSP said the $1.2-billion gross outflows in April also decreased 25.4 percent from the gross outflows in March 2024 amounting to $1.6 billion.

The US remained the top destination of outflows, receiving $527 million or 43 percent of total outward remittances.

It said that on a year-on-year basis, registered investments in April 2024 went up 28.2 percent from $713 million in April 2023 while gross outflows increased 15.1 percent from $1.1 billion a year ago.

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.

The BSP said that without such registration, the foreign investor could still repatriate capital and remit earnings on its investment but the FX would have to be sourced outside the banking system.

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