Hot money back to inflow in April – BSP

MANILA, Philippines - Foreign portfolio investments have started returning to the country in early April, data from the Bangko Sentral ng Pilipinas showed.

The country recorded a net hot money inflow of $240.66 million from April 1 to 18, central bank data showed.

Gross inflows during the period summed up to $1.195 billion, while gross outflows reached $954.11 million.

Should this trend continue, April may be the first after four months the country will register another net hot money inflow.

Official April hot money data will be released by the central bank on April 15.

Foreign portfolio investments registered a net outflow of $91.51 million in March, the fourth consecutive month net outflows have been observed.

The level, however, is an improvement from the $361.09-million outflow in February.

The BSP said the continued net outflows have been due to the heightened volatility in markets amid the US Federal Reserve’s reduction in its massive monthly band purchases.

The Fed in January started winding down its $85-billion monthly purchases of US Treasuries and mortgage bonds. Following four consecutive cuts done in separate meetings – the latest of which concluded on Thursday – the amount currently stand at $45 billion.

In the first three months of the year, net hot money outflow reached $2.337 billion, a reversal of the $1.087-billion net inflow in the same period in 2013.

The BSP has forecast a net hot money inflow of $2.1 billion this year, half of the $4.225 billion recorded in 2013.