Hot money outflow eases in February

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The movement of hot money, or foreign portfolio investments, in and out of the Philippines in February resulted in a net outflow but at a significantly slower pace than in January, indicating some improvement in investor sentiment since the start of the year.

Foreign portfolio investment inflow reached $1.5 billion in February, up 16.7 percent from the $1.3 billion recorded in January.

Outflows were recorded at $1.9 billion, for a net outflow of $361 million in February, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.

“While transactions resulted in overall net outflows of $361 million, this was significantly lower than the $1.8 billion recorded the previous month when the tapering of the United States QE program began,” the BSP said.


Also, PSE-listed securities contributed $148 million to the net inflow, while Peso GS transactions accounted for $509 million of the net outflows for the month.

“The US, the United Kingdom, Singapore, Luxembourg and Malaysia were the top five investor countries for the month with a combined share to total of 77.7 percent, while the US continued to be the main destination of outflows, receiving 92.2 percent of total,” the BSP added.

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

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