“Hot money” or the country’s foreign portfolio investments declined by 4.1 percent to $2.5 billion in October, as investment in shares listed at the Philippine Stock Exchange (PSE) dropped by 28.5 percent, according to the Bangko Sentral ng Pilipinas (BSP) on Thursday.
In a statement, BSP said that the decline to $2.5 billion from September’s $2.6 billion was because investment in PSE-listed shares dropped to $1.3 billion in October from last month’s recorded $1.8-billion.
“Investments in October were in PSE-listed securities [52.6 percent], peso GS [44 percent] and peso time deposits [3.4 percent],” the BSP said.
Year-on-year, the central bank said that investments registered an increased of 62.3 percent from $1.5 billion in 2012 because of the positive economic outlook and credit ratings upgrade to the country.
“[The 62.3-percent increase was] due to the third upgrade of the country’s credit rating, this time by Moody’s Investor Service, improved economic growth outlook for the Philippines by the Asian Development Bank, and the bill passed in the United States which allowed the reopening of government offices [until January 15, 2014]and increased the US debt ceiling to avert a debt default,” the BSP said.
Furthermore, the BSP added that October overall net inflows were at $969 million, a surge compared to the $683 million from a month ago and the $40 million from a year ago.
On the other hand, outflows decreased from $1.9 billion in September to $1.5 billion in October.
“Transactions in PSE-listed securities, peso GS and peso time deposits yielded net inflows of $30 million, $855 million and $84 million, respectively,” the BSP said.
For PSE-listed shares, the central bank listed holding firms, food, beverage and tobacco companies, banks, property firms and telecommunication companies as the main beneficiaries.
The top five investor-countries in the Philippines were the United Kingdom, Singapore, United States, Luxembourg and the Netherlands, which accounted for a 81.5- percent share of the total investments in the country.
For outflows, the US continued to be the main beneficiary of the country’s outflows of investments, taking a 78.4-percent share.