Positive investor sentiment saw net foreign portfolio investments hit P162.16 million January, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday, with the bulk of the so-called “hot money” going to the equities market.
Net inflows for the month were “attributable to investor optimism over the passage of the first phase of the government’s tax reform program, positive news on corporate earnings, and expected higher government spending for infrastructure projects,” the Bangko Sentral said in a statement.
January’s result, however, was nearly two-thirds down from the $456.93 million posted in December and a little over half the year earlier net inflow of $301.33 million.
Inflows of hot money — called so because the funds can quickly be taken in and out of an economy — amounted to $1.623 billion, surpassing the $1.558 billion and $1.147 billion recorded in December and a year ago, respectively.
Outflows were similarly higher at $1.461-billion compared to the previous month’s $1.101 billion and year-earlier $845.83 million.
Most of the funds — 69.2 percent — was invested in Philippine Stock Exchange-listed securities while the balance went to peso government securities.
The stock market opened the year with successive record highs, topping the 9,000 level just before January ended with sentiment said to have been boosted by the implementation of a new tax reform law and expectations that listed firms would be reporting positive 2017 results.
The United Kingdom, the United States, Malaysia, Singapore and Hong Kong were the top five investor countries for the month, accounting for 80.2 percent of the total.
The US continued to be the main destination of outflows, receiving 79.9 percent of total remittances.