BSP sets deadline for filing of FDI requests

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has imposed a prescriptive period for the filing of requests for registration of foreign direct investments (FDIs) to improve the data gathering capability of the central bank.

In a statement, BSP Governor Amando M. Tetangco Jr. said the Monetary Board has decided to adopt a five-year prescriptive period for the filing of requests for registration of FDIs starting from date of inward remittance or actual transfer of assets to the Philippines.

“The measure is envisioned to strengthen the data gathering capability of the BSP so as to have an updated, comprehensive and current information database on foreign direct investments,” Tetangco said.

He explained that the BSP also gave a one-year grace period to existing unregistered FDIs that are recorded in the investee firm’s books and whose foreign exchange funding were inwardly remitted or assets were transferred more than five years prior to the date of the implementing circular.

If the one-year grace allowing applications for registration of FDIs with the BSP, he said the BSP would no longer register the said investments.

The BSP chief also reiterated that foreign exchange funding for cash investments must be inwardly remitted but need not be converted to pesos. Inward FDIs could be in cash or in kind.

He added that the registration of foreign investments, including FDIs, is optional provided the foreign exchange that would fund the repatriation of capital and the remittance of dividends, profits and earnings accruing thereon should not be sourced from authorized agent banks (AABs) or AAB-subsidiary or affiliate foreign exchange corporations.

Furthermore, Tetangco said the registration of foreign investments in firms not listed with the Philippine Stock Exchange (PSE) should be filed with the BSP’s International Operations Department.

Latest data from the BSP showed that FDI inflows plunged 33 percent to $671 million in the first nine months of the year from $1 billion a year ago on the back of challenging global economic conditions and strains in foreign financial markets.

Equity placements inched up by 5.5 percent to $476 million in the first nine months of the year from $451 million in the same period last year while withdrawals surged 51.5 percent to $403 million from $266 million. The bulk of the investments that were infused into financial and insurance activities, real estate, manufacturing, mining and quarrying, electricity, gas steam, and airconditioning supply came from the US, Japan, Hong Kong, South Korea, and Singapore.

For September alone, the country posted a net FDI inflow of $166 million from a net outflow of $2 million a year ago as equity placements surged 285 percent to $150 million from $39 million while withdrawals plunged 47.5 percent to $32 milion from $61 million.