BSP data: ‘Hot money’ posted net inflow in June

Foreign capital registered with the Bangko Sentral ng Pilipinas (BSP) posted net inflows in June after four straight months of net outflows, but this was not enough to offset the exits made earlier in the year.

Data from the central bank showed that transactions on foreign portfolio investments — also called “hot money” — posted a net inflow of $1.23 million in June, reversing the $342.19-million net outflow the same month last year and the $124.49-million net outflow in May.

Gross inflows for June stood at $889.44 million, while gross outflows for the month were recorded at $888.21 million.

A significant portion of the inflows for the month were channeled into securities listed on the Philippine Stock Exchange (PSE) with $700 million or 78.7% of the total. These were mainly on property; banks; holding firms; food, beverage, and tobacco; and telecommunications.

The remaining $190 million or 21.3% was put into peso government securities, while less than 1% was channeled into other instruments.

The top five investor countries for the month were the United Kingdom, the United States, Luxembourg, Singapore, and Switzerland which cumulatively accounted for 84.2%.

The latest figures reflected a year-to-date net outflow of $803.33 million, a reversal of the $778.28-million net inflow in the first six months of 2022.

The registration of inward foreign investments delegated to all authorized agent banks (AABs) by the BSP is optional and required only if it involves foreign exchange purchases for the repatriation of capital and remittances of earnings.

Without the registration, the BSP said foreign investors can still repatriate capital and remit earnings on their investment, but the foreign exchange will have to be sourced outside the banking system. — RSJ, GMA Integrated News