Foreign portfolio investments yield lower net outflow in April —BSP

Foreign portfolio investments (FPI) or “hot money” in the Philippines yielded a lower net outflow in April amid investors’ reaction to various local developments such as the ongoing vaccination rollout against COVID-19 and continued imposition of quarantine measures, the Bangko Sentral ng Pilipinas (BSP) reported Friday.

Data released by the central bank showed that FPI in April posted a net outflow of $374 million, lower compared to the $541-million net outflow in March.

Foreign portfolio investments are also called hot money because of the ease by which the funds enter and leave markets.

The net outflow last month resulted from the $1 billion gross outflows, which exceeded gross inflows of $651 million.

In particular, the $1-billion gross outflows in April were lower by 24.9% compared to the $1.4 billion recorded in March.

The United States received 72.8% of total outflows.

Meanwhile, gross inflows of $651 million in April reflected a 21% decline from the $824 million recorded in the prior month.

The BSP said about 68.9% of investments registered were in Philippine Stock Exchange-listed securities mainly to property companies, banks, holding firms, food, beverage and tobacco companies and transportation services firm.

The remaining 31.1% went to investments in peso government securities.

The United Kingdom, US, Luxembourg, Singapore, and Norway were the top five investor countries for the month, with combined share to total at 84.7%.

The central bank said developments in April that could have affected FPI inflow and outflow are the “investor reaction to easing inflation, contraction of the country’s gross domestic product in 2020, extension of local quarantine measures, progress of the government’s vaccination program and the continued rise of infections in the country.”

For January to April, FPIs yielded a net outflow of $857 million, lower compared to the $2.1 billion net outflow recorded in the same period last year “amid the ongoing impact of the COVID-19 pandemic to the global economy and financial system.”

“This has been accompanied by international and domestic developments such as the new US administration, vaccine rollout and the reimposition of additional quarantine measures amid the surge in virus infection,” the BSP said.—LDF, GMA News