‘Hot money’ inflows jump 65% to $2.78 billion in 4 months

MANILA, Philippines – Foreign portfolio investments or ‘hot money’ registered with the Bangko Sentral ng Pilipinas (BSP) jumped by about 65 percent in the first four months of the year as investors invested more in government securities and stocks despite jitters brought about by the recently concluded May 10 elections, data released yesterday showed.

The BSP said inflows of foreign portfolio investments amounted to $2.78 billion from January to April this year or $1.09 billion higher than the $1.69 billion that flowed into the country last year.

According to the report, investments in shares of stocks listed in the Philippine Stock Exchange (PSE) zoomed by 90 percent to $2.01 billion and accounted for 73 percent of the total inflows in the first four months of the year.

Investments in peso-denominated government securities reached $419 million or 15 percent of the total inflows from January to April followed by peso time deposits with $345 million or 12.4 percent of the total inflows.

The BSP said major sources that accounted for about 83 percent of the total foreign portfolio investments included the US, United Kingdom, Malaysia, Singapore, and Luxemburg.

Monetary authorities attributed the steady flow of foreign portfolio investments into the country to the stable financial markets, robust corporate earnings, strong peso, the rise in the US stock market as well as bouyant Asian markets.

On the other hand, gross foreign portfolio investment outflows went up by 14 percent to $2.18 billion in the first four months of the year from $1.91 billion in the same period last year.

In all, the BSP said the Philippines posted a net inflow of $594.86 million in the first four months of the year or a complete reversal of the $221.27 million in the same period last year.

“For the first four months of the year, transactions yielded a net inflow of $595 million in contrast to the $221-million net outflow for the comparable period in 2009,” the BSP stressed.

For the month of April alone, foreign portfolio investments posted a net inflow of $210.11 million or a complete reversal of the $276.05 million net outflow registered in the same month last year.

Portfolio investment inflows surged by 158.2 percent to $1.12 billion in during the height of the campaign period in April from $435.32 million in the same month last year.

Investments in PSE-listed shares accounted for about 65 percent of the total inflows in April with $728 million followed by peso time deposits and government securities with 35 percent or $395 million. –Lawrence Agcaoili (The Philippine Star)