CEBU, Philippines - Philippine registered investments in January this year declined by 54.4 percent compared to the same period a year ago from US$2.8 billion to US$1.3 billion reflecting investors’ bearish view on emerging markets as the United States started tapering of its quantitative easing program during the month.
Latest record from the Bangko Sentral ng Pilipinas (BSP) however, revealed that registered investments in January 2014 is 4.2 percent higher compared to US$1.2 billion recorded in December of 2013.
Investments during the month consisted of PSE-listed securities (78.7 percent), Peso GS (18.5 percent, and Peso time deposits (2.7 percent).
For PSE-listed securities, the main beneficiaries were banks, holding firms, property companies, food, beverage and tobacco firms, as well as telecommunications companies.
Record further showed that outflows for the month nearly doubled to US$3.1 billion from US$1.6 billion last month, as investors started to divert funds back to the United States as the US economy exhibited more signs of economic recovery.
Transactions resulted in over-all net inflows of US$1.8 billion, more than five times the US$ 354 million recorded the previous month and a sharp reversal from the US$1.3 billion net inflow a year ago.
Transactions across all investment instruments such as PSE-listed securities, Peso GS, and Peso time deposits, yielded net inflows of US$209 million, US$1.5 billion, and US$169 million, respectively.
The United States, United Kingdom, Singapore, Luxembourg and Belgium were to top five investor countries for the month with combined share to total of 77.9 percent, while the United States continued to be the main destination of outflows receiving 82.8 percent of total.
Registration of inward foreign investments with the BSP is voluntary. It entitles the investor or his representative to buy foreign exchange from authorized agent banks and or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of earnings that accrue on the registered investment.
In the first 11 months of 2013, the Philippines enjoyed a 54.9 percent growth in Foreign Direct Investments (FDI) with total worth of FDI of US$286 million, compared to US$185 million registered in 2012.
The bulk of gross equity capital placements—which originated primarily from Mexico, Japan, the United States, British Virgin Islands, and Singapore—were channeled mainly to manufacturing, water supply, sewerage, waste management and remediation; financial and insurance, real estate and arts, entertainment and recreation activities.
FDI inflows remained robust on the back of sustained investor confidence in the growth prospects of the Philippine economy.
The significant rise in the net FDI for this particular period bolstered by non-residents’ net placements in debt instruments issued by local affiliates, increasing by more than two-fold to reach US$225 million during the period from US$108 million in the previous year. (FREEMAN)