Philippine’s Foreign Portfolio Investment Produced $162 Million in January

MANILA, Philippines – It can be seen from the data that was released by the Philippine central bank that foreign portfolio investment (FPI) net inflow produced 162.16 million dollars last month. It was, however, lower than last year’s Januray record of 301.33 million dollars by 46.2 percent.

With the Tax Reform for Acceleration and Inclusion (TRAIN) Law taking into effect and with the Philippines’s healthy macroeconomic fundamentals, foreign portfolio investment is maintaining its movement in the country sending its stock market to its highest in the previous month.

The country has been achieving net inflow since November last year.

According to the Bangko Sentral ng Pilipinas (BSP), the month’s total transactions produced 162 million dollars of net inflows caused by investor optimism throughout the first stage of the government’s tax reform program, favorable news on net income of companies, as well as expected higher infrastructure project expenses of the government.

The TRAIN Law is expected to produce an additional income of around 90 billion pesos. The TRAIN Law or the Republic Act 10963 was signed by President Rodrigo Duterte last December 19, 2017.

The law lowered taxes on personal incomes; but it increased the taxes on tobacco, petroleum products, motor vehicles, and sweetened beverages.

Data showed that the inflows of the foreign portfolio investment increased by 41.5 percent from January last year of 1.15 billion dollars to 1.62 billion dollars from last month.

Around 69.2 percent throughout the month’s registered investments were in PSE’s traded securities, specifically holding firms, property companies, banks, utility companies, as well as tobacco, food, and beverage firms that rendered to an 80 million dollar net inflow.

On the contrary, the remaining 30.8 percent proceeded to the Philippine government securities that produced an 82 million dollar net inflow.

The BSP noted that the 80.2 percent of the net inflows were from the United States, United Kingdom, Singapore, Hong Kong, and Malaysia.

Statistics also showed outflows increased by 72.7 percent from last year’s 845.8 million dollars to 1.46 billion dollars from last month. The United States remained to be the primary destination, collecting nearly 80 percent of the overall outflows.

The Philippine Stock Exchange Index (PSEi) closed last January 29 at a high record of 9,058.82 after exceeding the past 9,000 record. The PSEi broke the old record resulting in nine times higher since the year 2018 started, but as well has been corrected last February 12 to the lowest 8,487.91.

Altering the 404.43 million dollars of net inflow in 2016, the country recorded an FPI net outflow of 205.05 million dollars in 2017 as further assets were transmitted from the Philippines because of the rate hike series by the order to shut down a number of mining sites and by the US Federal Reserve.

The Bangko Sentral ng Pilipinas is looking forward for the country to achieve a net outflow of 900 million dollars.

About the Author
The Stock Signals Philippines is the online news media arm of Equilyst Analytics. Inc., an SEC-registered stock market consultancy firm in the Philippines that guides Filipinos on long-term investing and short-term trading and offers mentoring services.

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