Net hot money outflows total $739 M in March

Published April 18, 2019, 12:00 AM

by manilabulletin_admin

By Lee C. Chipongian

The central bank registered a $739-million net foreign portfolio investment outflows in March, reversing February’s net inflows of $339.57 million.

MB file photo.
MB file photo.

The end-March hot money flows is a net positive of $363.40 million, however, but lower compared to same time in 2018 of $766 million net inflows. Year-to-date, gross inflows amounted to $5.2 billion while gross outflows stood at $4.84 billion.

For the month of March only, data from the Bangko Sentral ng Pilipinas (BSP) show net transactions came from gross outflows of $2.5 billion and gross inflows of $1.7 billion.

The BSP said that by instrument, there was a $2 million net inflows in unit investment trust funds (UITF).

All other instruments recorded net outflows such as securities listed at the Philippine Stock Exchange, peso government securities and other portfolio instruments. Net outflows in listed stocks totaled $379 million during the month, peso government securities had $361 million and others had less than $2 million net outflows.

About 66.5 percent of gross inflows found its way in listed securities, mainly in holding firms, food, beverage and tobacco companies, property firms, banks, and transportation services companies. Another 33.4 percent were placed in peso government securities and jusy 0.1 percent in UITFs.

These funds came from investors in the United Kingdom, US, Singapore, Luxembourg and Hong Kong – all accounted for 80.3 percent of inflows. Year-on-year, gross inflows dropped by 29.8 percent from $2.5 billion same time in 2018.

As for the gross outflows, the BSP attributed the withdrawals to peso government securities which registered outflows of $939 million for March. “The US continued to be the main destination of outflows, receiving 76.8 percent of total remittances,” said the BSP. Year-on-year, gross outflows rose by 84.9 percent from $1.3 billion in March 2018.

Last year, the country’s foreign portfolio investments registered net inflows of $1.2 billion, reversing 2017’s net ouflows of $195 million. The BSP projected a net outflow of $100 million for 2017.

For this year, the central bank thinks hot money transactions will end with a net outflow of $200 million. Hot money flows are considered highly speculative funds.