32.4 C
Manila
Tuesday, September 22, 2020
 
Home Business Hot money net outflow hits $457M yr-to-date

Hot money net outflow hits $457M yr-to-date

 

Reverses yr-earlier net inflow of $773.77M

FOREIGN portfolio investments in the Philippines so far this year registered a net outflow of $457.83 million as of mid-July, reversing a net inflow of $773.77 million posted in the same period a year earlier, Bangko Sentral ng Pilipinas (BSP) data released on Thursday showed.
Also called hot money, total inflows of foreign portfolio investments for the period ending July 14 reached $8.90 billion, against total outflows of $9.36 billion, according to BSP data.

These figures compare with the year-earlier total inflows of $9.20 billion and total outflows of $8.43 billion, for a net inflow of $773.77 million.

 

Positive external, negative internal factors

Bank of the Philippine Islands (BPI) Vice President and lead economist Emilio Neri Jr. traced the net outflow largely to external factors.

“This is still largely driven by external factors, particularly policy normalization in the developed economies given their sustained growth recovery,” he said.

Neri also said some domestic concerns, such as the Marawi City conflict and the imposition of martial law in Mindanao may have also contributed to a knee-jerk capital flow reversal.

Earlier, the International Monetary Fund (IMF) said global economic recovery was on firmer footing as improving growth in China, Europe and Japan offset downward revisions for the United States and Britain.

The Fund, in its latest update on the World Economic Outlook (WEO), said it expects the global economy to grow 3.5 percent in 2017 and 3.6 percent in 2018, maintaining its view from its April WEO.

On July 22, the Philippine Congress overwhelmingly voted to extend martial law and suspend the writ of habeas corpus in Mindanao until December 31, 2017 upon President Rodrigo Duterte’s request.

Foreign portfolio investment is also called hot money because of the ease with which the funds move in and out of a country. The investment does not necessarily create jobs, unlike foreign direct investments, which are used to build factories and buy capital equipment.

Speculative funds invested in financial assets are a component of the Philippines’ balance of payments (BOP), which summarizes the country’s economic transactions with the rest of the world over a certain period.

 

Canada conducts search linked to ricin letter sent to Trump

MONTREAL: Canadian police on Monday (Tuesday in Manila) searched a home in the Montreal area in connection with a letter addressed to US President Donald Trump...

Duterte slams Robredo anew

Vice President Maria Leonor “Leni” Robredo again earned the ire of President Rodrigo Duterte, who slammed her for criticizing the government’s Covid-19 response. In his...

Duterte to health workers: Help us fight the pandemic

President Rodrigo Duterte renewed his appeal for healthcare workers to stay in the Philippines while the country continues to fight the Covid-19 pandemic. In his public address late Monday,...

Duterte to address UN General Assembly

For the first time since he assumed his post, President Rodrigo Duterte will address the United Nations (UN) which he repeatedly slammed in the...

Oil firms to hike pump prices

OIL companies will raise their pump prices on Tuesday, September 22. The cost of diesel will go up by 20 centavos per liter, gasoline by 60...
 

Weather

Today's Front Page

TRY OUR DIGITAL EDITION
FREE FOR 30 DAYS

ALREADY A SUBSCRIBER?