‘Hot money’ dips 60.4 percent to $999M

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Foreign portfolio investments to the Philippines, also known as “hot money,” suffered a 60.4-percent dip to $999 million in August from $2.5 million in the previous month.

In a statement on Friday, the Bangko Sentral ng Pilipinas (BSP) attributed the decrease to lower Philippine Stock Exchange (PSE)-listed securities and peso government securities (GS), which recorded at $863 million and $136 million, respectively.

The BSP explained that the low hot money figure can be attributed to the short trading weeks brought about by holidays and heavy flooding. Weather disturbances hit the country early August, which led to suspension of trading in financial markets.

The central bank added that hesitancy to invest during the “ghost” month of August and the possible scaling down of the $85-billion-a-month United States Federal Reserve’s quantitative easing (QE) program also pulled down investments.


Year-on-year, registered investments also went down by 20.4 percent because of the heavy sell-offs triggered by news of the Fed slowing down it QE program.

The BSP noted that the main beneficiaries of investments in PSE-listed shares include holding firms; property firms; banks; food, beverage and tobacco companies and telecommunication firms.

Similarly, outflows also declined to $1.4 billion in August from $1.6 billion in July, but higher compared to the $868 million figure a year ago.

The United Kingdom, United States, Singapore, Luxembourg and Hong Kong were the top five investor countries for the month, whose combined shares accounted for 76.4 percent. The US continued to be the main beneficiary of outflows from investments receiving $1.1 billion

“Registration of inward foreign investments with the Bangko Sentral ng Pilipinas is voluntary. It entitles the investor or his representative to buy foreign exchange from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of dividends/profits/earnings that accrue on the registered investment,” the BSP said.

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