May ‘hot money’ inflows up 31.6%


The Bangko Sentral ng Pilipinas (BSP) on Friday announced that “hot money” or foreign portfolio investments to the Philippines in May this year reached $2 billion.

This was 31.6 percent higher than the $1.5 billion level recorded last year.

However, the figure was 42.8 percent lower than the $3.5 billion recorded for April.

The BSP attributed the growth to the higher-than-expected first-quarter corporate earnings, and optimism over the peaceful and successful conduct of the midterm national and local elections.

Investments during the month were in Philippine Stock Exchange (PSE)-listed securities, $1.8 billion, or 92 percent; peso government securities, $150 million, or 7.5 percent; and peso time deposits, $10 million, or 0.5 percent.

The BSP noted that the main beneficiaries of investments in PSE-listed shares include holding firms, $664 million; banks, $297 million; property firms, $205 million; transportation services companies, $136 million; and food, beverage and tobacco companies, $135 million.

Similarly, outflows also rose to $2.6 billion in May from $2.4 billion in April.
The BSP attributed the growth to the announcement of a possible scaling down of quantitative easing in the United States.

“This resulted in net outflows of $641 million, a reversal from the net inflows of $1.1 billion in April and $106 million a year ago,” the central bank stated.

Transactions in PSE-listed securities and peso government securities resulted in inflows of $326 million and $325 million, respectively, while peso time deposits netted inflows of $10 million.

The United Kingdom, United States, Luxembourg, Singapore and Hong Kong were the top five-investor countries for the month, whose combined shares accounted for 85.5 percent.

The US continued to be the main beneficiary of outflows from investments receiving $2 billion.


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