The central bank said it registered net foreign portfolio investment outflows of $127 million in August, an improvement compared to $453 million net outflows in July, in a COVID-19 affected fund flow environment.
Total foreign portfolio funds or hot money inflows reached $667 million in August which was 7.3 percent lower than July’s $719 million. Gross outflows was at $793 million which was lower than July’s $1.2 billion or down by 32.3 percent. The US continue to receive bulk of withdrawals or 71.5 percent of total outflows.
By Bangko Sentral ng Pilipinas (BSP) description, foreign portfolio investments are inward foreign investments in publicly listed securities, peso-denominated government securities and banks’ peso time deposits with minimum tenor of 90 days. These funds are also invested in other peso debt instruments, unit investment trust funds and other portfolio investments such as Exchange Traded Funds and Philippine Depositary Receipts.
The BSP said about 84.3 percent of hot money investments were in listed securities at the Philippine Stock Exchange such as in holding firms, property companies, banks, food, beverage and tobacco companies, and telecommunication firms.
Another 15.7 percent were investments in peso government securities.
The BSP said 82.6 percent of hot money flows came from investors in the United Kingdom, Singapore, the US, Hong Kong and Luxembourg.
In the meantime for the first eight months of 2020, net outflows reached $3.9 billion, lower than $1.1 billion net outflows end-August in 2019.
For the period, some $11 billion gross outflows were registered by the BSP and $7.1 billion were gross inflows.
According to the BSP, the eight-month net outflows were bigger year-on-year because of “uncertainties due, among others, to the impact of the COVID-19 pandemic to the global economy and financial system, and other key events earlier in the year such as geopolitical and trade tensions, and corporate governance issues involving the water concessionaires.”
For this year, the BSP is projecting net foreign portfolio investments of $2.4 billion. Hot money amounted to $5.6 billion net inflows in 2019.