FOREIGN portfolio investments to the Philippines or “hot money” posted a net outflow of $1.84 billion in January, the biggest monthly net outflow based on available data since 1999.
In a statement, the central bank said that the month’s overall net outflows are more than five times the $354 million recorded the previous months, and a sharp reversal from the $1.3-billion net inflow a year ago.
It said that registered investments for the month reached $1.28 billion, 4.2 percent higher compared to the $1.23-billion inflows in December 2013.
However, the BSP noted that registered investments recorded a decline of 54.5-percent from the $2.81-billion inflows a year ago.
It said that the decline is “reflecting bearish view on emerging markets as the United States [Federal Reserve] started the tapering of its quantitative easing program during the month.”
The United States Federal Reserve decided to taper its bond-buying program by another $10 billion to $65 billion a month beginning February. The Fed agreed to a second tapering, following on a December 18 decision to cut its monthly asset purchases to $75 billion a month in January from an original $85 billion a month.
Furthermore, the central bank noted that investments in January were consisted of Philippine Stock Exchange (PSE)-listed securities (78.7 percent), peso government securities (GS) (18.6 percent) and peso time deposits (2.7 percent).
Banks, holding firms, property companies, food, beverage and tobacco firms, and telecommunication companies were the main beneficiaries in the PSE-listed securities, it added.
Meanwhile, the BSP said that investment outflows in January “nearly doubled” to $3.12 billion from the previous month’s $1.58 billion.
It added that the outflows nearly doubled “as investors started to divert funds back to the United States as the US economy exhibited more signs of economic recovery.”
“Transactions across all investment instruments [PSE-listed securities, peso GS and peso time deposits] yielded net outflows [$209 million, $1.5 billion, and $169 million, respectively],” the central bank said.
The United States, the United Kingdom, Singapore, Luxembourg, and Belgium were the top five investor countries for the month with combined share to total of 77.9 percent, while the United States continued to be the main destination of outflows receiving 82.8 percent of total, it said.
Last year, foreign portfolio investments ended at a net inflow of $4.2 billion, and surpassed the revised $3.2-billion target of the BSP for the year. By 2014, these registered investments are seen to decline to $2.1 billion.