PH starts off 2017 with hot money net inflows of $301M

STOCKED. Around 95.4% of foreign portfolio investments for January went to PSE-listed securities.

MANILA, Philippines – Foreign portfolio investments, often called hot money, were off to a positive start in 2017 following a dismal end last year, according to the Bangko Sentral ng Pilipinas (BSP).

Preliminary data released by the BSP on Thursday, February 16, showed that overall foreign portfolio investment transactions for January 2017 hit overall net inflows of $301 million, a major reversal from the net outflows recorded in January 2016 of $130 million and December 2016's outflows of $315 million.

Registered investments for the month amounted to $1.1 billion, reflecting an 8.7% increase from the figure recorded in December 2016. The BSP said this may be attributed to optimism about the new year and positive investor reaction to the 6.6% GDP growth of the country in the 4th quarter of 2016.

It also represents 39.8% year on-year growth in registered investments, compared to the $820 million figure for the same period last year.

On the other hand, outflows for the month declined to $846 million, down 38.3% from $1.4 billion in December 2016. Year-on-year, outflows were also down by 11.0% from $950 million.

Around 95.4% of investments registered during the month were in Philippine Stock Exchange (PSE)-listed securities, going mainly to banks, holding firms, property companies, food, beverage, and tobacco firms, and utility companies. These transactions yielded net inflows of $360 million.

The remaining investments were split among peso government securities (GS) at 3.4% and other peso debt instruments (OPDIs) at 1.2%.

Transactions from peso government securities and peso time deposits resulted in net outflows of $42 million and $13 million while transactions in other peso debt instruments yielded net inflows of $13 million.

The United Kingdom, United States, Singapore, Luxembourg, and Hong Kong were the top 5 investor countries for the month, with combined share to total of 79.6%. The BSP also noted that the US continued to be the main destination of outflows, receiving 89.3% of total remittances. –