Latest Stories

Net ‘hot’ money inflow down 55% in first 3 months


Foreign investments in peso-denominated stocks, bonds and other portfolio instruments fell in the first quarter as expectations of a mild recession in the Euro zone heightened risk aversion among fund owners, dampening demand for assets in emerging markets.

The Bangko Sentral ng Pilipinas, however, said there was likelihood for foreign “hot” money to increase in the coming months as desire for yields would eventually push investors to buy portfolio assets from the Philippines and other emerging markets.

Emerging markets, it added, are expected to outperform advanced economies and to drive global economic growth.

Data from the BSP showed that the net inflow of foreign portfolio investments amounted to $438.98 million in the first quarter, down by 55 percent from $972.55 million in the same period last year.

Gross inflows reached $4.03 billion, while outflows amounted to $3.59 billion.

Inflows were mostly in the form of investments in stocks listed on the Philippine Stock Exchange and in government securities.

Investments came mostly from the United States, the United Kingdom, Singapore, Hong Kong and Luxembourg.

For March, alone, the net inflow of foreign portfolio investments reached $158.27 million, falling by 35 percent from $245.39 million in the same month last year.

Gross inflows for the month reached $1.32 billion, while outflows amounted to $1.16 billion.

Monetary officials said the ongoing crisis in the Euro zone had tempered investor appetite for perceivably risky assets, such as those from the Philippines and other emerging markets.

In times of uncertainty, they said, there was tendency for some investors to stay in the sidelines or simply hold on to their dollars.

The Euro zone is likely to contract by 0.3 percent this year, according to estimates by the International Monetary Fund.

However, officials said the possibility of a rebound in foreign portfolio investments could not be discounted.

Portfolio fund owners may eventually search for yields, and assets from emerging markets like the Philippines are the likely choices.

Emerging economies, especially in Asia, are expected to post much faster economic growth rates this year than those in industrialized countries.

Officials said potentially favorable developments, such as the continued recovery of the United States from the recession in 2009 and the growing global liquidity, could eventually boost demand for portfolio assets from emerging markets.

In case portfolio inflows substantially rise in the months ahead, the BSP said it was prepared to implement appropriate policies, such as amendments to foreign exchange rules, to temper inflationary pressures.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Bonds , Business , emerging markets , euro zone recession , foreign investments , portfolio instruments , stocks

  • http://joboni96.myopenid.com/ joboni96


    better zero
    from foreign
    capital marauders

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Napoles tags over 100 officials in pork scam – Lacson
  • Vitangcol to sue Czech envoy
  • Senator’s kickback from pork bigger than those of Enrile, Estrada, Revilla – Lacson
  • 43 out of 414 Etihad passengers yet to be found, tested for MERS-CoV – Palace
  • Sandigan junks Marcos family claim to Paoay property
  • Sports

  • Caguioa blasts ‘no heart, soft’ Ginebra on Twitter
  • San Mig Coffee grinds out win over Alaska to force decider
  • UP nips St. Benilde; Adamson blasts RTU in Filoil women’s caging
  • Kevin Garnett responds to Raptors’ GM F word
  • Albert Pujols hits 500th HR of major league career
  • Lifestyle

  • Entering the monkhood a rite of passage
  • Haneda International Airport: A destination on its own
  • Wanted: Beauty queen with a heart that beats for the environment
  • Kim Atienza: At home with art and design
  • Life lessons I want to teach my son
  • Entertainment

  • Bollywood Oscars, film stars come to Florida
  • Ex-Fox exec denies allegations in sex abuse suit
  • Kris Aquino backtracks, says Herbert Bautista and her are ‘best friends’
  • Summer preview: Chris Pratt enters a new ‘Galaxy’
  • Bon Jovi helps open low-income housing in US
  • Business

  • SM to rebuild Tacloban hospital
  • PSEi slips after 4-day rally
  • Toyota sells 2.58 million vehicles, outselling GM
  • McDonald’s 1Q profit slips as US sales decline
  • SEC approves SM’s P15B retail bond offer
  • Technology

  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Viber releases new design for iPhone, comes to Blackberry 10 for the first time
  • Engineers create a world of difference
  • Bam Aquino becomes Master Splinter’s son after Wiki hack
  • Mark Caguioa lambasts Ginebra teammates on Twitter
  • Opinion

  • One-dimensional diplomacy: A cost-benefit analysis of Manila’s security deal with Washington
  • No ordinary illness
  • Reforest mountains with fire trees and their kind
  • Day of the Earth
  • When will Chinese firm deliver new coaches?
  • Global Nation

  • 19 Ukrainians, Russians, Filipinas rescued in bar raid
  • Filipinos coming home from Mideast must obtain MERS clearance – DOH
  • US Secret Service in Manila ahead of Obama visit
  • Palace thanks Estrada for successful HK mission
  • Hong Kong accepts PH apology; sanctions also lifted
  • Marketplace