Sept hot money net outflow hits 32-mth high


FOREIGN portfolio investments posted a net outflow of $807.15 million in September, the highest in 32 months, the latest data from the Bangko Sentral ng Pilipinas showed.

The net outflow last month was more than twice the $323.98 million a year earlier, and was a complete turnaround from the $427.07 million in net inflow in August.

It was the highest since January 2014, when the net outflow hit $1.84 billion.

BSP data on Thursday showed the total inflow slowed down by 6.9 percent to $1.27 billion in September from $1.36 billion a year earlier and by 27.5 percent from $1.75 billion last August.

The BSP noted several developments affecting foreign portfolio investment: the lingering uncertainty about the timing of the next interest hike in the United States, the bombing in Davao City earlier in September which prompted the government to declare a “state of lawless violence” in the country, and the European Central Bank’s decision to discontinue its bond-buying program. These “weighed down on investors.”

Year-on-year, total outflows worsened by 23 percent to $2.08 billion in September from $1.69 billion, and from $1.32 billion in August “due to profit-taking” in the stock market.

9-month net inflow

Despite the net outflow in September, the cumulative numbers in the first nine months of 2016 reached a net inflow of $1.26 billion—a reversal of $413.93 million in net outflow in January to September last year.
The nine-month inflows of $13.74 billion helped offset total outflows of $12.48 billion, the BSP said.

Fund transfers

Most of the registered inflows in September, or 88.7 percent, went to the shares traded on the Philippine Stock Exchange—particularly of holding firms, property companies, banks, telecommunications companies, and food/beverage/tobacco firms.

At the same time, 11.3 percent went to peso government securities.

The transactions in all instruments yielded net outflows: PSE-listed securities ($654 million), peso GS ($153 million), and other peso debt instruments (less than $1 million).

The United Kingdom, the United States, Singapore, Malaysia, and Luxembourg were the top five sources of inflows, accounting for 72.3 percent.

The US was the main destination of outflows, accounting for 76.7 percent of the total fund transfers.

Foreign portfolio investments are considered hot money because of the ease by which the funds move in and out of a country and do not necessarily create jobs, unlike foreign direct investments that are put into assets such as factories and equipment.

Hot money yielded a net outflow of $599.70 million last year, exceeding the central bank’s forecast of $200 million.


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  1. We need permanent FDIs to come and establish their businesses here to generate employment, help build our industries and improve our economy thereby solving poverty. Hot money are parked here and taken out with whatever earnings they got any time. It only distorts the financial market and the peso/dollar exchange rate.

  2. The US is moving their hot money investments out of the country. The data shows with more outflows than inflows. That is what Duterte wants, he said we do not need US investment. We do not need aid from other countries. That we are not beggars. Are we a rich country ? Per data , 30 percent or roughly 33 million Pilipinos are poor. Who will get hungry, them or us ? One article says that Agot Isidro is scared to get hungry. The writer is the most stupid person in the whole world. Who is not scared to be hungry ? All of us is scared to be hungry. If this writer wants to get hungry, so be it. You die of starvation.