BSP reports $301M in net ‘hot money’ inflow
Optimism among investors amid sustained robust economic growth resulted in a net inflow of so-called “hot money” in January, amounting to $301.33 million.
A Bangko Sentral ng Pilipinas report released Thursday showed that inflows of foreign portfolio investments reached $1.147 billion last month, outpacing the $845.83 million in outflows.
As such, the end-January figure reversed the net outflow of $129.85 million in the same month in 2016.
The registered investments in January were 39.8-percent higher than the $820.4 million a year ago and were 8.7 percent higher than the preceding month’s $1.055 billion.
The BSP attributed the increase to “optimism about the new year and the positive investor reaction to the announced 6.6-percent GDP [gross domestic product] growth in the fourth quarter of 2016.” It was also in January when the government announced that the full-year GDP grew 6.8 percent last year.
Outflows, meanwhile, dropped by 38.3 percent from December last year’s $1.37 billion and down by 11 percent from $950.25 million in January 2016.
“About 95.4 percent of investments registered during the month were in Philippine Stock Exchange-listed securities (mainly in banks; holding firms; property companies; food, beverage and tobacco firms and utilities), the BSP said. The rest, it added, was in the form of investments in peso government securities and other peso debt instruments.
“Transactions for peso government securities and peso time deposits resulted in net outflows of $42 million and $31 million, respectively, while net inflows were realized for other instruments (PSE-listed securities, $360 million; and other peso debt instruments, $13 million),” the BSP added.
The top five sources of portfolio investments last month were Hong Kong, Luxembourg, Singapore, the United Kingdom and the United States, which accounted for almost four-fifths of the month’s haul.
The US, meanwhile, remained the top destination of the funds that went out, with a share of 89.3 percent of the total for the month.
For 2017, the BSP had projected portfolio investments to yield a net outflow of $900 million by the end of the year.
Foreign portfolio investments are in the form of placements in publicly listed shares, government and private sector IOUs, and deposit certificates.