BSP reports $494-M net hot money outflows in September

Published October 29, 2020, 5:05 PM

by Lee C. Chipongian

The Bangko Sentral ng Pilipinas (BSP) reported a net foreign portfolio investments outflows of $494 million in September, higher than the net outflows registered in August of $127 million.

In September, total gross outflows amounted to $1.1 billion while gross inflows stood at $594 million.

The BSP said the $594 million registered investments was down by 10.9 percent from August’s $667 million. “About 92.5 percent of investments registered were in PSE-listed securities (pertaining mainly to holding firms, property companies, food, beverage and tobacco firms, banks and retail companies) while the remaining 7.5 percent went to investments in peso government securities,” according to the central bank.

The top five investor countries were Singapore, the United Kingdom, US, Luxembourg and Switzerland – all accounting for 82.6 percent of the total.

As for outflows for September of $1.1 billion, this was 37.1 percent higher than $793 million in August. The US continues to be the biggest destination of fund withdrawals with 61 percent of total outflows.

For the January-September period, the BSP said the net outflows totaled $4.4 billion resulting from the $12.1 billion gross outflows and $7.7 billion gross inflows. 

 “This is larger compared to the $1.3 billion net outflows noted for the same period last year (January to September 2019) brought about by uncertainties due, among others, to the ongoing impact of the COVID-19 pandemic to the global economy and financial system coupled with international and domestic developments such as geopolitical tensions, certain corporate governance issues and extended quarantine measures in select regions in the country,” said the BSP.

For 2020, the BSP’s foreign portfolio investments projection is $2.4 billion and while most of its projections for the external sector were revised recently, the outlook for hot money net inflows was unchanged. For 2021, the hot money estimate is $3.5 billion net inflows.