‘Hot money’ inflows reach $2.6B

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Foreign portfolio investments to the Philippines, also known as “hot money,” recorded an inflow of $2.6 billion in the month of September because of the resurgence of investor confidence, data from the Bangko Sentral ng Pilipinas (BSP) showed on Thursday.

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The BSP attributed the higher investments inflow to the positive economic data from China, and the easing geopolitical tensions between the United States and Syria. The data showed that inflows in September more than doubled the $1-billion inflows in August.

“It may also be recalled that investments in August were low due to hesitancy to invest during the ‘ghost’ month [which the Chinese believe to be unlucky for business]and the shortened trading weeks brought about by holidays, heavy rains and flooding,” it stated.

Year-on-year, registered investments rose by 72.1 percent from $1.5 billion in 2012 “in recognition of the country’s sound macroeconomic fundamentals and record growth levels achieved in the first two quarters of 2013.”

The data also showed that January to September hot money inflows rose to $22.14 billion from the $13.44 billion level of the same period last year. Investments in September were in Philippine Stock Exchange (PSE)-listed securities, peso government securities (GS) and peso time deposits.

For PSE-listed securities, the main beneficiaries were holding firms, banks, property firms, information technology companies and utilities firms.

Meanwhile, the BSP said that although outflows for the month rose to $1.9 billion from $1.4 billion in August, transactions yielded net inflows of $683 million, higher than the $402 million recorded a year ago.

“This is also a turnaround from the $442-million net outflows last month. Transactions in PSE-listed securities, peso GS and peso time deposits yielded net inflows of $53 million, $577 million, and $52 million, respectively,” it stated.

January to September outflows also rose to $19.34 billion from $10.78 billion level of the same period last year, it said.

Singapore, the United Kingdom, the United States, Luxembourg and Hong Kong were the top five investor countries for the month with combined share to total of 84.4 percent.

The US continued to be the main beneficiary of outflows from investments, receiving $1.6 billion, or 85.3 percent of total.

Mayvelin U. Caraballo

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