Hot money inflow surges in Sept

MANILA, Philippines - Foreign portfolio investments or hot money surged 70 percent in September from a year ago as investors regained confidence in the region due to positive economic data from China and the easing of geopolitical tensions between the US and Syria.

In a report, the Bangko Sentral ng Pilipinas (BSP) said net hot money inflow reached $682.73 million in September, up 70 percent from $402.43 million a year ago.

The latest figure is a turnaround from the net outflow of $441.56 million in August.

The central bank said gross inflows rose 72 percent to $2.603 billion in September from $1.512 billion last year, offsetting the 73 percent climb in gross outflows to $1.920 billion from $1.110 billion.

“Registered investments for the month of September (increased)... with the resurgence of investor confidence due to positive economic data from China and the easing geopolitical tensions between the United States and Syria,” the central bank said.

“It may also be recalled that investments in August were low due to hesitancy to invest during the ghost month--which the Chinese believe to be unlucky for business – and the shortened trading weeks brought about by holidays, heavy rains and flooding,” the central bank added.

Furthermore, the country’s sound macroeconomic fundamentals and faster-than-expected economic growth of 7.6 percent in the first half also attracted capital flows into the country during the period.

The BSP said investments in September primarily went to Philippine Stock Exchange-listed securities ($1.8 billion), peso-denominated government securities ($714 million), and peso-denominated time deposits ($52 million).

“Singapore, the United Kingdom, the United States, Luxembourg and Hong Kong were the top five investors countries for the month with combined share to total of 84.4 percent,” the BSP said.

In the nine months to September, net hot money inflow amounted to $2.691 billion, two percent higher last year’s $2.649 billion.

Gross inflows summed up to $21.744 billion in the nine-month period, while gross outflows totaled $19.053 billion.

The BSP expects net hot money inflow to hit $4.4 billion this year.