Hot money posts $819M net outflow for year-to-date

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Foreign portfolio investments in and out of the Philippines slowed in the week ending August 22, bringing the year-to-date movement of speculative funds to a net outflow of $819.27 million, data from the Bangko Sentral ng Pilipinas (BSP) showed on Monday.

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The weekly updates released by the BSP recorded a net inflow of $149.53 million for August 18 to 22, down from a net inflow of $209.23 million in the week of August 11 to 15. That was based on total foreign portfolio investment inflows of $434.78 million on record for the latest week in review, offset partially by $285.26 million of total outflows during the period.

No explanations were provided. Speculative funds represent money invested in financial assets such as shares of companies listed on the Philippine Stock Exchange (PSE), peso-denominated government debt instruments and peso time deposits.

Foreign portfolio investments are a component of the country’s balance of payments (BOP), which summarizes the country’s economic transactions with the rest of the world over a certain period. Components of the BOP also include trade, foreign direct and portfolio investments, and even remittances from Filipinos abroad.

Last year, foreign portfolio investments stood at a net inflow of $4.2 billion, surpassing the revised $3.2-billion target of the BSP for the year. For 2014, these registered investments are seen declining to $1.5 billion as inflows are projected at $1.8 billion against $300 million of outflows.

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