'Hot money' outflows from PH financial markets surged in H1 due to pandemic | Inquirer Business

‘Hot money’ outflows from PH financial markets surged in H1 due to pandemic

By: - Business News Editor / @daxinq
/ 03:49 PM July 30, 2020

MANILA, Philippines — Bangko Sentral ng Pilipinas-registered foreign portfolio investments for June 2020 yielded net outflows of $235 million resulting from the $1.3 billion gross outflows and $1.0 billion gross inflows for the month.

This is smaller than the recorded net outflows of $1 billion in May, the regulator said Thursday.

The $1 billion registered investments for the month was more than twice the $486 million recorded for May 2020.

Article continues after this advertisement

About 92.3 percent of investments registered were in Philippine Stock Exchange-listed securities (pertaining mainly to holding firms, property companies, banks, telecommunication firms and food, beverage, and tobacco companies.

FEATURED STORIES

The remaining 7.7 percent went to investments in peso-denominated government securities.

The United Kingdom, Singapore, the United States, Norway, and the Bahamas were the top five investor countries for the month, with combined share to total at 71.7 percent.

Article continues after this advertisement

Outflows for June of $1.3 billion were lower compared to the level recorded for May of $1.5 billion, or by 15.9 percent. The US received 61.4 percent of total outflows.

Article continues after this advertisement

Registered foreign portfolio investment transactions for the first six months of 2020 yielded net outflows of $3.3 billion resulting from the $9 billion gross outflows and $5.7 billion gross inflows for the period.

Article continues after this advertisement

“This is larger than the $721 million net outflows noted for the same period last year brought about by uncertainties due, among others, to the impact of the COVID-19 pandemic to the global economy and financial system,” the central bank said.

The BSP added that the situation was aggravated by other key events earlier in the year such as the continuing geopolitical tensions between the US and Iran; ongoing trade negotiations between the US and China; and the renegotiation of the contracts of the country’s water concessionaires.

Article continues after this advertisement

Meanwhile, year-to-date transactions for all investments — PSE-listed securities, peso-denominated government securities, and other investments — resulted in net outflows.

The BSP noted that registration of inward foreign investments is optional under the liberalized rules on foreign exchange transactions. The issuance of a BSP registration document entitles the investor or his representative to buy foreign exchange from authorized agent banks or their subsidiary or affiliate foreign exchange corporations for repatriation of capital and remittance of earnings that accrue on the registered investment. Without this registration, the foreign investor can still repatriate capital and remit earnings on his investment, but the foreign exchange will have to be sourced outside the banking system.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

For more news about the novel coronavirus click here.
What you need to know about Coronavirus.
For more information on COVID-19, call the DOH Hotline: (02) 86517800 local 1149/1150.

The Inquirer Foundation supports our healthcare frontliners and is still accepting cash donations to be deposited at Banco de Oro (BDO) current account #007960018860 or donate through PayMaya using this link.

TAGS: Business, coronavirus, COVID-19, hot money, Investments, outflows, pandemic, Philippines, Virus

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our newsletter!

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2024 INQUIRER.net | All Rights Reserved

This is an information message

We use cookies to enhance your experience. By continuing, you agree to our use of cookies. Learn more here.