Hot money net outflows hit $345 million in November 2019

Ralf Rivas
Hot money net outflows hit $345 million in November 2019
Foreign portfolio investments for November yield net outflows as a result of $1.5 billion fleeing, mainly from the United States

MANILA, Philippines – Foreign portfolio investments for November yielded net outflows of $345 million as a result of $1.5 billion in outflows and $1.2 billion in inflows for the month.

The Bangko Sentral ng Pilipinas (BSP) said on Thursday, December 19, that the latest “hot money” figure is in contrast to the net inflows of $105 million in October.

According to the central bank, 73% of the outflows were the result of investments from the United States pulling out from the Philippines. Outflows for November were higher by 34.2% from October.

The BSP noted the stalled trade negotiations between the US and China, public impeachment hearings of US President Donald Trump, Hong Kong protests, and rebalancing of the Morgan Stanley Capital International Philippines Index as developments that likely affected business sentiment.

Meanwhile, portfolio investments during November reflected a 4.5% decrease from the $1.3-billion figure in October. About 86.4% of investments were in Philippine Stock Exchange-listed securities. The rest went to investments in peso-denominated government securities.

The United Kingdom, US, Singapore, Hong Kong, and Luxembourg were the top 5 investors for the month.

Year-on-year, registered investments were 41.4% lower than the $2 billion-level recorded in November 2018. Gross outflows were also 27.5% higher than the outflows recorded a year ago.

Portfolio investments are referred to as hot money, as they move regularly and quickly between financial markets. Compared to foreign direct investments, portfolio investments are short-term and are very sensitive to internal and external developments. – Rappler.com

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.