BSP: $15M ‘hot money’ entered Philippines in January

Foreign portfolio investments (FPIs) or “hot money” yielded net inflows in January as the economy gradually recovers despite the stricter quarantine measures imposed during the period amid the surge in COVID-19 cases, data released by the Bangko Sentral ng Pilipinas (BSP) show.

Central bank data showed that FPI last month posted a net inflow of $15 million, a reversal from the net outflows of $4 million recorded in December 2021.

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

The net inflow in January this year resulted from the $731-million gross inflows and $717-million gross outflows for the month.

In particular, the $731 million registered investments last month reflected a decrease of 45.1% or by $600 million compared to the $1.3 billion recorded in December 2021. 

Majority of investments or 68% registered were in Philippine Stock Exchange (PSE) -- listed securities mainly in holding firms; property; banks; food, beverage and tobacco; and telecommunications; while the remaining 32% went to investments in Peso government securities (Peso GS)

The top five investor countries for the month were the United Kingdom, United States (US), Luxembourg, Switzerland and Malaysia with combined share to total at 82%, according to the BSP.

The decline in registered investments or gross FPI inflows was offset by the lower $717-million gross outflows for the month, which decreased by 46.4% or by $619 million than the $1.3 billion recorded in December 2021. 

The US received 75.1% of total outflows, the BSP said.

Year-on-year, registered investments declined by 23.1% or $220 million from the $952 million recorded in January 2021. 

Similarly, gross outflows were lower by 16% or $137 million than the outflows recorded a year ago of $854 million.

“It may be noted that the $15 million net inflows were lower by 85.1% (or by US$83 million) compared to the $98 million net inflows recorded for the same period a year ago,” the BSP said. —LBG, GMA News