‘Hot money’ outflows dip to $299M in April
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Thu, 23 May 2019 16:15:25 +0000
FOREIGN portfolio investments or “hot money” net outflows reached $298.83 million in April, lower than March’s $739 million and reversing the $279.29-million inflow posted a year ago, Bangko Sentral ng Pilipinas (BSP) data showed on Thursday.
According to the central bank, this came as large outflows for all other investment instruments offset investments in peso time deposits.
Registered foreign portfolio investments amounted to $989.96 million for the month, a 42.8-percent and 28-percent decrease from $1.732 billion in March and $1.375 billion in April last year, respectively.
In a statement, the Bangko Sentral said this “may be attributed to investor reaction to the delayed approval of the 2019 national government budget and the damage caused by the 22 April earthquake that jolted parts of Luzon and Visayas.”
“Investors also stayed cautious amid the lack of fresh catalysts in the market and ongoing trade negotiations between the United States and China,” it added.
The bulk, or 79.2 percent, was invested in Philippine Stock Exchange (PSE)-listed securities — mainly property companies; holding firms; banks; food, beverage and tobacco companies; and transportation services companies. The rest went to peso government securities and peso time deposits.
The United Kingdom, the United States, Singapore, Hong Kong and Luxembourg were the top five investor-countries, making up 84.8 percent of the total.
April’s outflows of $1.288 billion, meanwhile, represented a 47-percent decrease from March’s $2.471 billion, but marked a 17.5-percent increase from $1.096 billion a year ago.
The United States remained the main destination of repatriated funds, accounting for 71.1 percent.
Taking preliminary results for the first three days of May into account, year-to-date hot money flows were positive at a net inflow of $37.27 million, lower than P1.223 billion a year ago.
Speculative funds invested in financial assets are a component of the Philippines’ balance of payments, which summarizes the country’s economic transactions with the rest of the world over a certain period.
The Bangko Sentral expects this type of investment to post a net outflow of about $200 million this year.
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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