Hot money or the highly speculative central bank-monitored foreign investments improved to a net inflow of $672.86 million in November, reversing two months of outflows, as investors poured in funds to take advantage of better market sentiments after a lower inflation number during the month.
Foreign investments registered with the Bangko Sentral ng Pilipinas (BSP), formerly called foreign portfolio investments, are monitored via the authorized agent banks (AABs).
Based on BSP data released on Thursday, Dec. 28, foreign portfolio investments in November reversed the net outflows in October of $328.19 million. It is also higher compared to same period in 2022 of $488.75 million of net inflows.
On a year-to-date basis, the January to November foreign investment portfolios totaled $133.51 million, still a net outflow and also in contrast to same period last year of $799.54 million net inflows.
Hot money funds 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.
Total gross inflows in November amounted to $1.547 billion while gross inflows totaled $902.01 million. Both lower compared to same time last year of $1.054 billion gross inflows and $565.71 million gross outflows.
For the January to November period, gross inflows totaled $11.897 billion while gross outflows reached $12.03 billion. The year-to-date tally is lower from end-November last year of $11.382 billion gross inflows and $10.583 billion gross outflows
The BSP reported that in November, about 71.4 percent of registered investments were in peso government securities worth $1.1 billion, while about 28.6 percent were in listed securities at the Philippine Stock Exchange at $450 million.
The foreign portfolio funds were invested in these sectors: banks; holding firms; property; transportation services; and food, beverage and tobacco.
“Investments for the month mostly came from the United Kingdom, Singapore, United States (US), Luxembourg, and Hongkong with combined share to total at 91.9 percent,” said the BSP, adding that “the US remains to be the top destination of outflows, receiving US$529 million (or 58.6 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 inflows of $1 billion. Last year, the BSP registered $886.7 million of net inflows which was lower than the projected $3.5 billion for 2022.