July hot money $321M


The movement of portfolio investments in and out of the country yielded overall net inflow in July, much lower than the investment level recorded a year earlier but significantly higher than the figure posted in June.

Foreign portfolio investments or “hot money” transactions in July showed a net inflow of $321 million, plunging from the $895 million net inflow a year earlier, according to data released by the Bangko Sentral ng Pilipinas (BSP) on Thursday.

On a month-to-month basis, however, the level of hot money transactions in July showed a significant increase from the $44 million net inflow in June.

Outflows reached $1.42 billion, compared with $1.63 billion a year earlier, while July inflows were recorded at $1.74 billion from the previous year’s $2.52 billion.

According to the central bank, net inflows were realized for Philippine Stock Exchange (PSE)-listed securities with $137 million and peso-denominated government securities with $213 million.

About 69.7 percent of the investment went to PSE-listed securities such as holding firms, property companies, banks, telecommunications firms, and food, beverage and tobacco firms; and 30.2 percent went to peso-denominated government securities, the BSP data said.

“The United States, the United Kingdom, Singapore, Malaysia, and Germany were the top five investor countries for the month, with a combined share [of the]total of 80.8 percent. The United States continued to be the main destination of outflows, receiving 83.6 percent of the total,” the BSP said.

Last year, foreign portfolio investments registered a net inflow of $4.2 billion, surpassing the revised $3.2-billion target of the BSP for 2013. For 2014, these registered investments are expected to decline to $1.5 billion, the net of $1.8 billion in projected inflows and $300 million in outflows.

Foreign portfolio investments are one of the components 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. The central bank has forecast a narrower BOP surplus this year at $1.1 billion.


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