PH hot money net inflows hit $279M in April

MANILA, Philippines – Foreign portfolio investments continued to flow into the country on the back of the Philippines' sound macroeconomic fundamentals, the Bangko Sentral ng Pilipinas (BSP) reported on Friday, May 18.

Data released by the BSP showed  that country had a net inflow of foreign portfolio investments for the second straight month in April with $279.28 million, 5 times more than the $51.49 million in the same month last year.

Portfolio investments are called “hot money” as these funds can enter and leave the country easily.

The Philippines has recorded 77 uninterrupted quarters of economic growth. In the first quarter of 2018, the gross domestic product (GDP) grew by 6.8%.

The Development Budget Coordination Committee (DBCC) has set a full-year GDP growth target of between 7% to 8% for 2018.

“I think the continued strength of the Philippine economy particularly the output and the government’s program towards infrastructure which would attract not only foreign direct investments but also portfolio investment to ride the tide I think can also provide support to higher portfolio investments,” BSP officer-in-charge Diwa Guinigundo said.

Inflows inched up 4.1% to $1.37 billion from $1.32 billion.

Around 82.2% was invested securities mainly banks, holding firms, property companies, food, beverage and tobacco firms, and retail companies being traded at the Philippine Stock Exchange (PSE); while the rest went to peso government securities.

The BSP said bulk of the investments came from the United Kingdom, US, Hong Kong, Singapore, and Luxembourg.

Outflows fell 13.6% to $1.09 billion in April from $1.27 billion in the same month in 2017. About 74.5%  of the funds went to the US.

For the first 4 months of the year, the Philippines had a net inflow of $1.2 billion in hot money, reversing the net outflow of $644 million recorded in the same period last year. 

This year, the BSP sees the Philippines booking $900 million in net outflow of foreign portfolio investments.  –