‘Hot money’ inflows down by 11.3% to $2.5B in July


The inflows of foreign portfolio investments or the “hot money” to the Philippines slowed down as it stood at $2.5 billion in July this year.

In a statement on Thursday, the Bangko Sentral ng Pilipinas (BSP) said that hot money for the month was 11.3 percent lower than the $2.8 billion level recorded in June.

The registered investments for July consist of Philippine Stocks Exchange-listed securities, $1.6 billion; peso government securities (GS), $880 million and peso time deposits, $50 million.

The BSP added that the main beneficiaries of investments in PSE-listed securities were: holding firms, banks, property firms, utilities companies and telecommunication firms.

The top five investor countries for the month were United Kingdom, Singapore, the United States, Luxembourg and Hong Kong with combined share of 82.9 percent of total registered investments.

Meanwhile, the central bank said that the United States continued to be the main beneficiary of outflows from investments receiving $1.2 billion.

Year-on-year, investments rose by 17 percent from $2.2 billion in 2012 because of the renewed optimism after the State of the Nation Address by President Benigno Aquino 3rd and the United States Federal Reserve’s announcements on quantitative easing.

Outflows, on the other hand, dropped to $1.6 billion in July from $2.9 billion in June tempered by the US Federal Reserve’s policy pronouncement.

Furthermore, net inflows were realized across all asset types: PSE-listed securities, $97 million; peso GS, $748 million and peso time deposits, $50 million.

The central bank also noted that transactions for portfolio investments of nonresidents for July yielded net inflows of $895 million, “reflecting a major turnaround from the $23-million net outflows recorded in June, as investors reacted to the US Federal Reserve’s decision to maintain its quantitative easing program until economic recovery in the United States is sustained.”

“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 stated.


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