'Hot money' continues to leave PH in April

MANILA, Philippines – Foreign portfolio investments continued to flow out of the country in April – reversing the net inflows seen a year ago – as investors gave in to profit-taking, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Data made public by the central bank showed that the Philippines sustained net outflows of $31 million in foreign portfolio investments in April.

This is much higher than March’s $22 million, and a reversal of the $325 million net inflows gained in the same period a year ago.

BSP said portfolio investments are call “hot money” as these funds can enter and leave the country easily.

The April result can be attributed to “profit taking as the first two months of the year yielded a total net inflow of $1.8 billion,” the BSP said.

Gross inflows last month dipped to $1.9 billion from $2.1 billion in March.

Meanwhile, gross outflows in April registered $1.965 billion, lower than the $2.104 billion posted a month earlier.

BSP said about 74.3% of total foreign portfolio investments in April were in Philippine Stock Exchange (PSE)-listed securities, mainly pertaining to holding firms; banks; property companies; food, beverage and tobacco companies; and telecommunication firms.

The rest of the investments, according to BSP, were from government securities (24%) and other peso-denominated debt instruments (1.5%).

The US, the United Kingdom, Singapore, Luxembourg, and Hong Kong were the top 5 sources of net inflows in April, with a combined share of 80%. – Rappler.com

US$1 = P44.40