Foreign portfolio investments or hot money yielded a net inflow of $489 million in November, higher than $109.56-million a year ago as fund managers remained confident in the country’s macroeconomic fundamentals, data from the Bangko Sentral ng Pilipinas show.
The November net inflow was also more than five times larger than the $83-million net inflow recorded in October. This resulted from the $1.1-billion gross inflows and $566-million gross outflows for the month.
Registered investments in November jumped 63.6 percent, or by $410 million, from $645 million in October.
Majority of investments, or 55.1 percent, went to Philippine Stock Exchange-listed securities mainly in banks, holding firms, property, food, beverage and tobacco and telecommunications.
The balance went to investments in peso government securities (44.8 percent) and other instruments (less than 1.0 percent).
Investments in November mostly came from the United Kingdom, the United States, the Netherlands, Luxembourg and Singapore.
Meanwhile, portfolio investments from January to November posted a net inflow of $794 million, a turnaround from the $570-million net outflow a year ago.
Registration of inward foreign investments delegated to authorized agent banks by the BSP is optional under the rules on foreign exchange transactions.
It is required only if the investor or its representative will purchase foreign exchange from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of earnings that accrue on the registered investment.
Without such registration, the foreign investor can still repatriate capital and remit earnings on its investment but the foreign exchange will have to be sourced outside the banking system.
Portfolio investments are also called “hot money” because of the ease they are invested in and taken out of domestic financial markets.
Hot money in 2021 posted a net outflow of $2.5 billion.