$749.8m in hot money exited PH in May, says BSP

More foreign funds left the domestic financial markets in May as investors reacted negatively to the “renewed trade tensions” between the US and China, the Bangko Sentral ng Pilipinas said Friday.

Data showed registered foreign portfolio investments or hot money in May posted a net outflow of $749.8 million, bigger than the $206-million net outflow a year ago.

It was also the biggest net outflow since $807 million in September 2016.

This was the third month that net outflow was recorded this year since $739 million in March and $298.8 million in April.

The May figure hot money in the first five months to a net outflow of $685 million, a reversal of the $813.8-million net inflow a year ago.

Gross inflows for the month reached $1.237 billion, while gross outflows were recorded at $1.987 billion.

All investment instruments resulted in net outflows. Listed securities at the Philippines Stock Exchange posted a net outflow of $508 million; peso government securities, $241 million; and other peso debt instruments and other portfolio  instruments (each at less than $1 million). 

About 81.5 percent of investments registered during the month were in PSE-listed securities (pertaining  mainly to holding firms, property companies, banks, food, beverage and tobacco  companies, and transportation services firms); while the 18.5-percent balance went to peso government securities.

The United Kingdom, the United States, Malaysia, Singapore and Luxembourg were the top five investor countries for the month, with a combined share of 76.7 percent from the total. Julito G. Rada

Registration of inward foreign investments with the central bank is optional under the liberalized rules on foreign exchange transactions. 

Foreign portfolio investments are also called hot money because of the ease they are invested in and taken out of the local financial markets.

Hot money in 2018 posted a net inflow of $1.2 billion, a significant turnaround from the $195-million net outflow in 2017, buoyed partly by the passage into law of the Tax Reform for Acceleration and Inclusion. Julito G. Rada

Topics: foreign funds , hot money , Bangko Sentral ng Pilipinas , BSP
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