Net hot money inflow hits $182 million

MANILA, Philippines - Foreign investments in stocks, government securities and peso-denominated assets yielded a net inflow of $182 million from January to August, reversing an outflow of $446 million recorded a year ago, due mainly to improving investor sentiment, the Bangko Sentral ng Pilipinas (BSP) said.

“Improving business and consumer confidence brought about by encouraging domestic macroeconomic fundamentals such as declining inflation, easing interest rates and robust remittances by overseas Filipinos, contributed to the upbeat investor sentiment on the Philippines,” the BSP said.

However, transactions for the month of August alone, resulted in a net outflow of $83 million, from a net inflow of $66 million recorded in July.

The BSP said that during the so-called ghost month, investors “cashed in” on gains from previous market rallies to reposition their portfolio for the month.

Registered foreign portfolio investments of $385 million fell 26 percent compared to the previous month. About 88 percent of these investments were in Philippine Stock Exchange-listed shares while the balance pertained to peso-denominated government securities.

Total outflows, which were largely in the form of withdrawals from interim peso deposits, increased to $468 million or four percent.

Registration of inward foreign investments with the BSP, which is voluntary, entitles the foreign investor to buy foreign exchange from authorized agent banks or their subsidiary foreign exchange corporations for repatriation of capital and remittance of dividends and earnings that accrue on the investment.

The country’s top five investors are the United States, the United Kingdom, Japan, Singapore and Luxembourg which collectively contributed 81 percent of total funds received.