Sunday, October 25, 2020
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Oct ‘hot money’ inflows hit $105M


FOREIGN portfolio investments posted net inflows of $105 million last month, compared to the $232 million that left the country in September, the Bangko Sentral ng Pilipinas (BSP) reported in Friday.

This file picture taken on October 11, 2013 shows a sheet of rare and sought after star notes after the phase of production where the new 100 USD bills are applied with a serial number a US Federal Reserve seal, are cut and stacked at the US Bureau of Engraving and Printing’s Western Currency Facility in Fort Worth, Texas. (AFP Photo)

In a statement, the central bank said October’s “hot money” — so called because of how these easily enter and exit the economy — resulted from the $1.25-billion inflows and $1.15-billion outflows recorded in the month.


The BSP attributed the inflows to the reduction in the reserve requirement ratio for universal/commercial banks and thrift lenders by 100 basis points, inflation easing to 0.8 percent, several initial public offerings and progress in the trade negotiations between the United States and China.

The latest amount was 3.8-percent lower than the $1.3 billion registered in September, but 31.5-percent higher than the year-ago’s $953 million.

The bulk or 81.9 percent of the $105 million were invested in Philippine Stock Exchange-listed securities, which cover holding firms; banks; property companies; retail companies; and food, beverage and tobacco companies. The rest — 18.1 percent — were put in government securities.

Top foreign investors last month are the United Kingdom, the United States, Singapore, Luxembourg and Malaysia. Their investments make up 73.9 percent of the total.

Meanwhile, October outflows declined by 25.1 percent from September’s $1.53 billion, 78.4 percent of which were from the US. Year-on-year, it was 12.5 percent higher than $1.02 billion.

Year-to-date, foreign investment portfolios registered a net outflow of $1.23 billion, representing $14.29-billion inflows and $15.52-billion outflows.

Last year, hot money hit a net inflow of $1.204 billion — the highest in five years and an about-face from 2017’s $195.40-million net outflow.

The 2018 tally was also better than the BSP’s forecast of a $100-million net outflow and was the largest net inflow since 2013’s $4.225 billion.


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