PH posted $112.6M in net ‘hot money’ inflow in Sept.

Foreign portfolio investments registered a net inflow of $112.63 million in September as investors looked forward to the passage of the first tax reform package pending in Congress, although more “hot money” left the country than the amount that came in during the first nine months mainly due to developments overseas.

Bangko Sentral ng Pilipinas data released yesterday showed that $1.297 billion in portfolio investments was registered last month, exceeding the $1.184 billion in outflows.

The September net inflow reversed the net outflows of $57.52 million in August and $807.15 million a year ago.

The inflows of hot money in September were up 38.5 percent from August’s $936.28 million as well as 1.8-percent higher than September last year’s $1.274 billion.

“This may be attributed to investor reaction to the extension of the debt limit deadline in the United States, and the Philippine Senate’s approval of the first package of the government’s tax reform program,” the BSP explained.

The Senate version of the first of the five tax reform packages, aimed at slashing personal income tax rates while jacking up taxes on consumption, was introduced last month, and is expected to be approved in a consolidated form for President Duterte’s approval before the end of the year.

“About 80.9 percent of investments registered during the month were in Philippine Stock Exchange-listed securities (pertaining mainly to holding firms, property companies, banks, casinos and gaming firms, food, beverage and tobacco companies); 18.7 percent went to peso government securities (GS), and the 0.4 percent balance to peso time deposits (PTDs). Transactions in PSE-listed securities resulted in net outflows of $42 million, while investments in peso GS and PTDs yielded net inflows of $150 million and $5 million, respectively,” the BSP said.

Almost four-fifths or 79.4 percent of foreign portfolio investment inflows that month came from Luxembourg, Norway, Singapore, the United Kingdom and the US.

The net money outflows in September, meanwhile, were 19.1-percent higher than the $993.8 million in August but 43.1-percent lower than the $2.081 billion posted in September last year.

The US was still the top destination of outflows, cornering 79.1 percent of the total remittances.

As of end-September, however, foreign portfolio investment stood at a net outflow of $206.25 million, as the $12.197 billion in outflows surpassed the $11.991-billion inflows.

The year-to-date net outflow was a reversal of the $1.267-billion net inflow during the first nine months of last year.