Hot money reverses to net inflows in April

Published May 27, 2022, 3:31 PM

by Lee C. Chipongian

The central bank registered $1.36 billion worth of net foreign portfolio investments in April, reversing the $305 million net outflows in March.

Based on Bangko Sentral ng Pilipinas (BSP) data, the latest hot money net inflows also reversed the $374 million net withdrawals same period in 2021.

US dollar Reuters/File Photo (Manila Bulletin)

From January to April, BSP-registered foreign portfolio net inflows amounted to $1.34 billion, also a turnaround from the $857 million net outflows in the first four months last year.

Gross hot money inflows in April amounted to $2.18 billion while gross outflows totaled $823 million. The gross inflows was up 70.7 percent year-on-year or from $903 million.

The BSP noted that majority of investments or 91.5 percent registered were in listed securities in the stock market such as electricity, energy, power and water. The speculative funds were also invested in listed banks, holding firms, property and transportation services.

About 8.5 percent were invested in peso government securities.

In April, the top investor countries were Singapore, the United Kingdom, the US, Hong Kong and Luxembourg with combined share of 94.3 percent.

Foreign portfolio investments are inward foreign investments in publicly-listed securities, peso-denominated government securities and peso time deposits with banks with minimum tenor of 90 days. These funds are also invested in other peso debt instruments, unit investment trust funds, and portfolio investments such as Exchange Traded Funds and Philippine Depositary Receipts.

For this year, the BSP is projecting hot money net inflows of $4 billion. For 2023, the expectation is higher at $6.7 billion.

In 2021, hot money net outflows reached $574.46 million, down by 86.5 percent from 2020’s $4.24 billion net outflows.