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PH posts higher hot money outflows in October

PH posts higher hot money outflows in October

The central bank registered $221.11 million outflows in net foreign portfolio investment in October, higher than the $24.16 withdrawals in September.

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Data from the Bangko Sentral ng Pilipinas (BSP) showed that gross outflows in October reached $1.17 billion while gross inflows was at $949.68 million.

The registered October foreign portfolios or “hot money” which are speculative investments reversed what was reported same time in 2020 of $429.46 million net inflows.

The BSP said about 95.6 percent of hot money were invested in listed securities at the Philippine Stock Exchange, mainly in the food, beverage and tobacco sector, as well as in property, banks, holding firms and information technology sectors. Another 4.4 percent were placed in peso government securities.

During the month, the top five investor countries with a combined share of 70.7 percent were the United Kingdom, the US, Hong Kong, Luxembourg and Switzerland.

Of the $1.17 billion gross outflows in October however, the US accounted for 69 percent of total withdrawals.

For the period January to October, BSP-registered hot money was also in a net outflow position of $679.64 million, lower than the $3.94 billion net outflows same time in 2020.

The BSP as of mid-September, still forecasts that hot money inflows will end with a $4.3 billion net inflows for 2021, and $5.7 billion net inflows for 2022. Last year, foreign portfolio investments reached $8.2 billion net inflows.

Foreign portfolio funds are inward foreign investments in listed securities, peso-denominated government securities, peso time deposits with banks with minimum tenor of 90 days. These are also invested in other peso debt instruments, unit investment trust funds, and other portfolio investments such as Exchange Traded Funds and Philippine Depositary Receipts.