‘Hot money’ net outflow in Aug narrowed by 16.5% to $86M

The net outflows of short-term foreign investments or “hot money” narrowed by 16.5 percent to $86 million in August from $103 million in July as continuously high inflation pushed up interest rates here and abroad, but made the US dollar an investment magnet.

Net outflows in August was the narrowest in four months or since April, and was a reversal from net inflows of $12 million in the same month of 2021.

The Bangko Sentral ng Pilipinas (BSP) said on Thursday the latest monthly result brought the cumulative amount of BSP-registered foreign investments in the first eight months of 2022 to net inflows of $539 million, a reversal from net outflows of $434 million in the same period last year.

Last August, $878 million in BSP-registered short-term investments flowed out of the country while $792 million flowed in.

Gross outflows in August increased by 12 percent or $94 million from $784 million in July.

Close to three-quarters or 72.5 percent of foreign investments withdrawn from the Philippines in August went to the United States.

Meanwhile, inbound capital grew by 16 percent from $681 million in July.

More than three-quarters or 76 percent of gross inflows in August were invested in Philippine Stock Exchange-listed securities issued by companies operating as holding firms and those engaged in banks; property; food, beverage and tobacco; and electricity, energy, power and water.

About a quarter or 24 percent was lent to the government through investments in peso-denominated state securities.

—Ronnel W. Domingo