PH hot money returns to net outflow in March

The Philippines posted net hot money outflows in March as more flows exited the country while inflows declined during the month, data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday showed.

Short-term foreign portfolio investments or “hot money” registered a net outflow of $236.02 million in March, reversing the $689.27-million net inflow recorded the previous month.

This compares with the $70.26-million net outflow in March 2023, and the widest outflow in five months since the $328.19-million net outflow in October 2023.

Gross outflows for the month nearly doubled to $1.643 billion from $859.07 million in February, with the United States receiving $887 million or 53.9% of the total outward remittances during the month.

Gross inflows for the month declined to $1.407 billion from $1.548 billion the previous month, reflecting a $140-million or 9.1% decline.

Bulk or 56.7% or the registered investments were made in securities listed on the Philippine Stock Exchange, accounting for $798 million. These were made in banks, holding firms, property, transportation services, and food, beverage, and tobacco. The remaining 43% or $610 million was channeled into peso government securities.

Investments for the month came mostly from the United Kingdom, Singapore, the United States, Switzerland, and Luxembourg with a combined share of 83.6%.

The latest figures brought the year-to-date level to a net inflow of $377.42 million, a turnaround from the $328.20-million net outflow the same period in 2023.

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 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. —KG, GMA Integrated News