Hot money outflows reach $486 M in January

Published February 20, 2020, 12:00 AM

by manilabulletin_admin


Trade wars and a global health scare affected foreign portfolio investments or “hot money” transactions in January to net an outflow of $486 million, more than the withdrawals registered in the previous month of $321 million, the Bangko Sentral ng Pilipinas (BSP) said.

“Developments for the month included: Continuing geopolitical tensions between the US and Iran; ongoing trade negotiations between the US and China; renegotiation of the contracts of the country’s water concessionaires; and investor concerns on the spread of the novel coronavirus originating from Wuhan, China,” said the BSP.

For the first month of the year, the BSP registered $1.7-billion outflows versus $1.2-billion inflows.

Based on data, inflows were up 10.9 percent compared to $1.1 billion in December. The BSP said about 65.9 percent of these portfolio investments were placed in listed securities such as property companies, holding firms, banks, food, beverage and tobacco firms, and telecommunication companies. The other 34.1 percent were invested in peso government securities.

During the month of January, the top five investor countries were the United Kingdom, the US, Singapore, Luxembourg, and Hong Kong. These countries accounted for 79 percent of total hot money transactions.

In the meantime, outflows for January were up 20 percent from December’s $1.4 billion with the US accounting for 62.1 percent of fund withdrawals.

On a year-on-year basis, the BSP said registered investments declined by 40.1 percent while “gross outflows were higher than the outflows recorded a year ago ($1.3 billion or by 32.5 percent). In contrast, net inflows of $763 million were recorded for the same period a year ago.”