The country’s “hot money” or the highly speculative central bank-registered foreign investments remained in net outflows of $328.19 million for the month of October, albeit lower from the withdrawals of $698 million in the previous month, based on Bangko Sentral ng Pilipinas (BSP) data.
Compared to same period in 2022, it was a reversal from the net inflows recorded at the time of $83.44 million.
Investors, especially in the stock market, continue to withdraw funds for profits in September and October.
On a year-to-date basis, the January to October foreign investment portfolios totaled $732.58 million, still a net outflow and also a reversal of same period last year of $320.24 million net inflows.
Foreign investments registered with the BSP, formerly called foreign portfolio investments, are monitored via the authorized agent banks (AABs).
These investments refer to the following inward foreign investments registered with AABs: publicly-listed securities; peso-denominated government securities; peso time deposits with banks with minimum tenor of 90 days; other peso debt instruments; unit investment trust funds; and other instruments such as Exchange Traded Funds and Philippine Depositary Receipts.
Transactions on foreign investments registered with the BSP, through AABs, in October reported gross outflows of $1.282 billion while gross inflows totaled $954.38 million. Both lower compared to same time last year of $561.11 million gross outflows and $644.55 million gross inflows.
For the January to October period, gross outflows totaled $11.054 billion while gross inflows amounted to $10.321 billion. The year-to-date tally is lower from end-October last year of $9.97 billion gross outflows and $10.29 billion gross inflows.
The BSP said about 60.5 percent of registered investments were in listed securities in the stock market worth $577 million. These were invested in banks, property, holding firms, casinos and gaming, and food, beverage and tobacco listed firms.
Another 39.5 percent or $377 million were invested in peso-denominated government securities. The remaining one percent were placed in other instruments.
“Investments for the month mostly came from the United Kingdom, United States (US), Luxembourg, Singapore, and Hongkong with combined share to total at 88.0 percent,” according to the BSP, adding that the US “remains to be the top destination of outflows, receiving US$794 million (or 61.9 percent) of total outward remittances.”
It is optional for AABs to register inward foreign investments with the BSP. It is required only if the investor or its representative will purchase foreign currency from AABs or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of earnings that accrue on the registered investment, said the BSP.
For 2023, the BSP forecasts net hot money will reach $2.5 billion. Next year, the estimate is $3.5 billion.
Last year, the BSP registered $886.7 million of net hot money inflows. This was lower than the projected $3.5 billion for 2022.