Hot money inflow nets $274 M in Feb. (Sabong News)
Author
Lee C. Chipongian
Date
APRIL 01 2022
Foreign portfolio investments or hot money posted a higher net inflow of $274 million in February from the previous month’s $14.60 million on the back of global markets’ improving outlook.
Compared to same month in 2021, hot money net inflows in February reversed last year’s $40.44 million net outflows, based on Bangko Sentral ng Pilipinas (BSP) data.
Total fund inflows in February amounted to $944.51 million while gross outflows totalled $670.47 million. These were lower compared to February 2021’s gross inflows of $1.337 billion and gross outflows of $1.378 billion.
Foreign portfolio investments are inward foreign investments in publicly-listed securities, peso-denominated government securities and peso time deposits with banks with minimum tenor of 90 days. These funds are also invested in other peso debt instruments, unit investment trust funds, and portfolio investments such as Exchange Traded Funds and Philippine Depository Receipts.
According to the BSP, about 79.3 percent of foreign portfolio investments were in Philippine Stock Exchange-listed securities such as banks, property, holding firms, food, beverage and tobacco, and transportation services. The rest or 20.7 percent were placed in peso government securities.
Investors from the United Kingdom, US, Luxembourg, Singapore and Hong Kong accounted for 75.7 percent of the transactions in February. The US is still the biggest recipient of total outflows or about 76.5 percent of the $670.47 million outflows.
BSP-registered hot money flows on a year-to-date basis yielded net inflows of $289 million which was larger than the $57 million net inflows same period in 2021.
Foreign direct investments and and foreign portfolio investments are part of the country’s balance of payments (BOP) financial account.
For 2022, the BSP projects hot money net inflows of $4 billion and $6.7 billion for 2023.
Last year, the BSP registered hot money net outflows of $574.46 million which was lower by 86.5 percent compared to the $4.24 billion net outflows in 2020, the first year of the pandemic.
