'Hot money' inflow doubles to $1 billion in October

MANILA, Philippines - Foreign investments in stocks, government securities and peso-denominated assets yielded a net inflow of $1 billion in October or more than double the $494 million recorded the previous month, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

This brought the foreign portfolio investments or “hot money” in the first 10 months of the year to a net inflow of $2.5 billion, reflecting a 587percent increase from the $358 million recorded in the same period in 2009.

In October 2009, hot money that poured into the country amounted to only $129 million.

BSP data showed that registered investments aggregated to $8.9 billion or 64 percent higher than the previous year’s $5.4 billion. Of the amount, $6.6 billion went to listed shares in the Philippine Stock Exchange, higher than the $4.2 billion that came in last year.

Major beneficiaries were property companies and banks with $1.4 billion each and holding firms, with $1.2 billion. Telecommunication companies cornered $1.1 billion while utility firms received $683 million in investments, BSP data showed.

Data also showed that the $2.3 billion balance of registered investments went to peso-denominated government securities (20 percent) and peso time deposits and money market instruments (five percent).

Registration of inward foreign investments with theBSP, 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, Singapore, Luxembourg and Hong Kong which collectively contributed 79 percent of total funds received.

Year-to-date outflows amounted to $6.5 billion, compared to $5.1 billion in 2009.