PH 'hot money' net outflow nearly doubles in 2015

MANILA, Philippines – The net outflow of foreign portfolio investments or "hot money" nearly doubled in 2015, said the Bangko Sentral ng Pilipinas (BSP) on Thursday, January 14.

Data from the BSP show that the "hot money" pulled out from the Philippines reached $599.69 million last year. That amount is 93.3% percent higher than the $310.21 million in 2014.

The 2015 net outflow is also much higher than the $200-million projection of Philippine monetary authorities. 

The BSP attributed the increase to uncertainties brought about by China's economic slowdown and the normalization of interest rates in the United States.

The central bank also noted that the Philippines posted net inflows of "hot money" in January, February, and October, but saw net outflows for the other months of 2015. 

“While net cumulative inflows reached $1.8 billion during the first two months of 2015, these inflows were fully offset by net outflows in the succeeding months except for the small net inflow of $28 million in October,” the BSP said. 

Inflows slipped by 8.5% to $19.92 billion last year, from $21.79 billion in 2014.

The top 5 investor countries – the US, Britain, Singapore, Luxembourg, and Hong Kong – accounted for 79.6% of total inflows.

“The highest inflows were recorded during the first quarter of the year which may be attributed to investor optimism arising from 2014 positive corporate earnings and upgraded outlook for the country by the International Monetary Fund, coupled with higher investments in PSE-listed shares,” the BSP said.

This year, the central bank expects the net outflow of foreign portfolio investments to reach $1.3 billion, still due to uncertainties in the global financial market. –