Net ‘hot money’ hits two-month low
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Thu, 14 Mar 2019 16:43:00 +0000
Foreign portfolio investments remained positive in February but hit a two-month low, Bangko Sentral ng Pilipinas (BSP) data released on Thursday showed.
The $339.57-million net “hot money” inflow — down from January’s $762.82 million but a rebound from the year-earlier’s net outflow of $528.53 million — came as investments in government securities, peso instruments and Philippine Stock Exchange (PSE)-listed issues more than offset outflows.
4. Bangko Sentral ng Pilipinas Governor Benjamin Diokno. PHOTO BY DANTE DENNIS DIOSINA JR.
It was the lowest net inflow since the $278.11 million posted in December.
The central bank said February’s result “may be attributed to investor optimism arising from developments on trade negotiations between the US and China and the passage of the tariffication law, which is expected to help boost the rice supply in the country and thereby temper inflation.”
The BSP has estimated that the liberalization of rice imports via the new law would reduce inflation by 0.6 percentage points in 2019 and 0.3-0.4 percentage points in 2020.
Registered foreign portfolio investments amounted to $1.410 billion for the month, lower than the $2.061 billion in January but up 34.9 percent from February last year.
The bulk or 77.4 percent was invested in PSE-listed securities — mainly banks, holding firms, property companies, food, beverage and tobacco companies, and transportation companies — while the rest went to peso government securities and peso debt instruments.
The United Kingdom, the United States, Singapore, Luxembourg and Norway were the top five investor countries with a combined 67 percent of the total.
February’s outflows of $1.070 billion, meanwhile, reflected decreases of 17.6 percent and 32 percent, respectively, compared to the previous month ($1.299 billion) and a year ago ($1.573 billion).
The United States remained the main destination of repatriated funds, accounting for 80.3 percent.
Taking preliminary results for the first day of March into account, year-to-date hot money flows were positive at a net inflow of $1.151 billion.
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