Hot money soars to $18.5-B in 2012, a 10-yr high

MANILA, Philippines – The all-time record highs at the Philippine Stock Exchange (PSE) and the country’s healthy economic growth rates attracted a flurry of foreign investors in 2012, bringing the annual hot money to US$18.5 billion, the highest in 10 years.

In a statement on Thursday, January 17, the Bangko Sentral ng Pilipinas said this aggregate registered foreign portfolio investment was 12% more than the $16.5 billion recorded in 2011.

In December alone, over $1.7 billion funds flowed into the local capital markets, reflecting a 67% increase from the same period a year ago, but 13.3% lower than November’s as investors cashed in on gains from the record performance of the PSE.

Hot money, or the foreign-held funds seeking safe havens to diversify their portfolio assets, flowed mostly to PSE-listed securities (75.2%) and the others to the peso-denominated government securities (24.7%).

The main beneficiaries of the PSE-bound funds were the following: 

• holding firms, $311 million
• banks, 276 million
• properties, $215 million
• telecommunication, $155 million 
• utility, $136 million

Over the entire year, the main sources of portfolio funds were:

• United Kingdom
• United States
• Signapore
• Hong Kong
• Luxembourg

– Rappler.com