NET PORTFOLIO INVESTMENT INFLOW ROSE THREEFOLD IN 2003 - BSP

MALACANANG,  January 19, 2004 (OPS) Bangko Sentral ng Pilipinas (BSP) Governor Rafael B. Buenaventura has reported that foreign portfolio investment transactions registered a sizeable US$675.8 million net inflow in 2003, or over threefold the US$211.7 million figure in 2002.

Data sources for the foreign investment inflow are weekly reports submitted to the BSP by the five largest custodian banks.

Buenaventura said non-resident investments in all types of portfolio investment instruments posted net inflows during the year: Philippine Stock Exchange (PSE)-listed securities, US$30.7 million; government securities/money market instruments, US$180.3 million; and peso bank deposits, US$464.8 million.

In 2002, only investments in peso bank deposits showed a net inflow of US$350.2 million while investments in PSE-listed securities and government securities/money market instruments registered net outflows of US$115.2 million and US$23.3 million, respectively.

On a gross basis, foreign portfolio investment inflows totaled US$1,644.2 million in 2003, reflecting a 29 percent increase over the US$1,277.6 million figure in 2002.

On the other hand, withdrawals of foreign investments in portfolio instruments dropped by 9 percent to US$968.4 million, from US$1,065.9 million in 2002.

On a monthly basis, only the month of February recorded a net outflow (a minimal US$1.6 million).

Buenaventura said that positive developments, such as strong gains in Wall Street, the generally lower-than-expected budget deficit and inflation rate figures, reduced interest rates and high corporate earnings, have outweighed the negative factors such as the US-Iraq War, the SARS outbreak and the lingering security and political concerns.

Earlier, the BSP also reported that the countryís gross international reserves (GIR) stood at US$16.815 billion as of end-December 2003, slightly lower compared to the end-November level of $16.826 billion.

But the end-December 2003 GIR level was favorably higher than the US$16 billion year-end target set by the Monetary Board.

Buenaventura said that in terms of reserve adequacy ratios, the end-December 2003 GIR level was adequate to cover 4.7 months of imports of goods and payments of services and income.

The BSPís net international reserves (BSP-NIR) level as of end-December 2003, inclusive of revaluation of reserve assets and reserve-related liabilities, increased to US$13.812 billion compared to US$13.737 billion a month ago, Buenaventura said.


Reported by: Sol Jose Vanzi

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