REGISTERED foreign portfolio investments or “hot money” posted a net outflow of $51.67 million in the third week of October on the back of lingering uncertainty on the timing of the next interest rates hike by the US Federal Reserve, data from Bangko Sentral ng Pilipinas show.
The figure was lower than the $101.23-million net outflow a year ago. It was also smaller compared with the $180.33 million net outflow a week ago.
Despite the withdrawal of fund managers in the third week of October, hot money still brought the year-to-date portfolio investments to a net inflow of $1.076 billion, a sharp turnaround from the $437.30-million net outflow a year ago.
Foreign portfolio investments are overseas funds that are temporarily invested in local stocks, government securities and money market. These are also called “hot money” because of the ease they are invested in and taken out of the local markets.
Hot money in September posted a net outflow of $807 million, the biggest since the $1.844-billion net outflow in January 2014, due to the uncertain timing of the Fed hike.
The September net outflow was also higher than the $323.98-million net outflow a year ago and a reversal of the $427-million net inflow in August this year.
Hot money posted a net inflow of $1.266 billion in the first nine months, a sharp reversal of the $413.93-billion net outflow in the same period last year.
Total inflows in September reached $1.27 billion, lower than $1.367 billion a year ago, while total outflows stood at $2.08 billion, higher than the $1.69 billion on year.
Bangko Sentral said other reasons that caused the outflows in September were the bombing in Davao City early last month that 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.