‘Hot money’ swings to net inflow in March

MANILA, Philippines – Foreign portfolio investments or “hot money” swung to a net inflow of $158 million in March from a net outflow of $305 million the previous month due to higher investments in stocks and government securities.

However, the March figure was down 35.5% from the $245 million inflow recorded in the same month last year, the Bangko Sentral ng Pilipinas (BSP) said in a statement.

Most of the funds went to peso-denominated bonds ($189 million), and shares traded in the Philippine Stock Exchange ($100 million).

Meanwhile, money market instruments registered a net outflow of $141 million.

According to the BSP, registered investments amounted to $1.3 billion in March, slightly lower than February’s $1.5 billion, mainly because of profit-taking.

The main beneficiaries of investments in the stock market were holding firms, garnering $260 million in investments; banks with $171 million; property companies with $141 million; utility firms with $124 million; and telecommunications companies with $120 million.

The investments came mostly from the US, United Kingdom, Singapore, Hong Kong and Luxembourg.

Hot money, one of the indicators of investor confidence in the economy, is called as such for the ease by which it enters and exits the country.

Last year, hot money amounted to $4.1 billion, down 11.5% from 2010’s $4.6 billion, a 7-year high. – Rappler.com