$459M of net hot money exited PH in March – BSP

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FOREIGN portfolio investment in the net amount of $459.86 million left the Philippines in March this year, the central bank said on Thursday.

Profit-taking in shares on the Philippine Stock Exchange and higher inflation rate were primarily responsible, the Bangko Sentral ng Pilipinas (BSP) said.

The outflow of portfolio investment last month compares with a net inflow of $482.43 million in March 2016, and is higher than the $409.01-million net inflow in February, official data showed.

The BSP said total outflows reached $1.83 billion, exceeding total inflows of $1.37 billion.

In the first three months of the year, hot money registered a net outflow of $567.53 million, reversing the $395.99 net inflow posted a year earlier.

Profit-taking, inflation

The BSP said foreign portfolio investments amounted to $1.37 billion, up 40 percent from $981.20 million in February 2017.

Year-on-year, inflows declined by 18.7 percent from $1.68 billion.

In the first quarter of 2017, registered investments amounted to $3.5 billion while outflows were at $4.06 billion.

“This is attributable mainly due to profit-taking and continued uncertainties arising from international and domestic developments, such as the anticipated interest rate increase in the United States, and the closure order for several mining companies in the country,” the BSP said.

Components

BSP data showed 83.8 percent of investment registered in March were in Philippine Stock Exchange-listed securities, mainly in holding firms, banks, property companies, food, beverage and tobacco firms, and telecommunications companies. The balance went into peso government securities and unit investment trust funds.

The United Kingdom, United States, Singapore, Belgium and Switzerland were the top five investor countries for the month, with a combined share to total of 73.9 percent. The United States continued to be the main destination of outflows, receiving 87.6 percent of total remittances.

Foreign portfolio investments are also known as hot money because of the ease with which the funds move in and out of a country and do not necessarily create jobs, unlike foreign direct investments, which are used to build factories and buy capital equipment.

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