The International Operations Department of the Bangko Sentral ng Pilipinas (BSP), implements and monitors rules and regulations on foreign exchange transactions and investments. All rules and subsequent amendments related to foreign exchange are consolidated in BSP Circular 1389, linked below.

Capital Inflow

There are no restrictions on nonresident investors purchasing money-market instruments, bonds, or other portfolio investments. Nonresidents, who want to invest in local securities markets, must make their transactions via inward foreign exchange remittances converted to PHP through a local bank, existing PHP bank account or from funds held in resident foreign-currency accounts converted to PHP.

The Foreign Investments Act (FIA) allows 100% foreign-equity ownership in locally-registered firms, except in sectors on two “negative” lists. List A identifies areas restricted by the Constitution or by nationalization laws. List B cites sectors related to defense, public morals, health, and natural resources. Some of these are subject to a maximum 40% foreign equity.

Capital Outflow

Offshore resident investments abroad above USD6 million annually require prior regulatory approval. Registration is required if the foreign exchange used for the investments will be purchased from the domestic banking system. For investments under USD6 million, investors must submit to the foreign exchange selling bank supporting documents describing the nature and place of investment. BSP Circular 388 lists the documentary requirements for purchasing over USD6 million for overseas investments.

Foreign investments registered with the BSP are entitled to full and immediate repatriation of dividends, profits, and other earnings. Repatriation is allowed without regulatory approval, as long as proof of registration for the original investment is available, or the registration document is presented. Regulatory approval and registration are required if the foreign exchange needed to service the capital repatriation or outward remittance of dividends, profits, and earnings is sourced from domestic banks.