Hot money up in February at $1.2B

MANILA, Philippines – Hot money or foreign portfolio investments reached $1.2 billion net inflows in February, the Bangko Sentral ng Pilipinas (BSP) said.

The February net inflows reversed the $355 million net outflows recorded a year ago, due to tapering of the quantitative easing program of the United States.

Investments for February rose due to block sales of shares of two holding firms and renewed interest in peso government securities, BSP reported Thursday, March 12.

Foreign portfolio investments registered during the month rose to US$2.5 billion, or by 16.2%from last month’s level.

Singapore, the United Kingdom, the United States, Luxembourg, and Hong Kong were the top 5 investor countries for the month, with combined shares of 82.1%.

The US continued to be the main destination of outflows, receiving 81.9% of the total.

About 66.4% of investments registered in February were in Philippine Stock Exchange (PSE)-listed securities – mainly holding firms, property companies, banks, food, beverage, and tobacco companies. and utilities firms.

The rest of the investments were in peso government securities (30.6%) and peso time deposits (3%).

Transactions in all investment instruments yielded net inflows of PSE-listed securities, $637 million; peso government securities, $479 million; and peso time deposits, $75 million.

Total outflows for the month were $1.4 billion lower or 15.3% than those recorded in January 2015 ($1.6 billion), and by 26.6% for the same period last year ($1.9 billion).

Registration of inward foreign investments with the BSP is voluntary under the liberalized rules on foreign exchange transactions. 

The issuance of a BSP registration document entitles the investor or his representative to buy foreign exchange from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations.

Without such registration, the foreign investor can still repatriate capital and remit earnings on his investment but the foreign exchange will have to be sourced outside the banking system, BSP explained. – Rappler.com