BSP JUNE FOREIGN INVESTMENTS AT $342M

The central bank has registered $342 million foreign investments in June, through authorized agent banks (AAB), a high official said.

“The amount was larger compared to the $270 million net outflows recorded in May 2022. This resulted from the $1.4 billion gross outflows and $1.0 billion gross inflows for the month,” Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla said in a statement.

The $1.0 billion registered investments for June 2022 reflected an increase of 7.6 percent (or by $73 million) compared to the $966 million recorded in May 2022.

Moreover, majority of investments (or 77.4 percent) registered were in Philippine Stock Exchange-listed securities (investments mainly in property; holding firms; banks; food, beverage and tobacco; and information technology), while the remaining went to investments in peso government securities (22.6 percent).

Investments for the month mostly came from the United Kingdom, United States (US), Singapore, Hong Kong and Switzerland with combined share to total at 82.9 percent.

“The $1.4-billion gross outflows for the month were larger by 11.7 percent (or by $145 million) than the $1.2 billion recorded in May 2022. The US received 69.3 percent of total remittances,” Medalla said.

On a year-on-year basis, June investments decreased by 50.7 percent (or $1.1 billion), from the $2.1 billion recorded in June 2021, while gross outflows were smaller by 22.1 percent (or by $391 million) than the outflows recorded for the same period last year ($1.8 billion).

The $342 million net outflows in June 2022 is a reversal from the $335 million net inflows recorded in June 2021.

Meanwhile, on a year-to-date transactions from January 1 to June 30 for foreign investments registered with the BSP, through AAB yielded net inflows of $728 million, a turnaround from the $106 million net outflows noted for the same period last year, Medalla added.

Chief economist Michael Ricafort of Rizal Commercial Banking Corp. told Daily Tribune that, “the net foreign portfolio ‘hot money’ outflows largely brought about by increased volatility and some sell-off in the global financial markets after more hawkish Fed signals and the biggest Fed rate hike since 1994 at 0.75 on 14 June (followed by another 0.75 on 27 July) in an effort to bring down elevated US inflation at new 40-year highs.”