Hot money outflows total $352 M in April

The Bangko Sentral ng Pilipinas (BSP) said “hot money” investors withdrew $351.87 million worth of net foreign investments in April, higher than the previous month’s outflow of $70.26 million.

Foreign investments, formerly called foreign portfolio investments, also reversed the net inflows recorded same period in 2022 of $1.4 billion, the BSP said on Thursday, May 25.

Year-to-date or from January to April, foreign investments registered with the BSP yielded net outflows of $680.07 million versus the $1.39 billion worth of net inflows same time in 2022.

In April, gross inflow transactions registered with the BSP through authorized agent banks or AABs amounted to $712.83 million while gross outflows were $1.06 billion. Total inflows were lower than same time last year of $2.23 billion while gross outflows were higher than $823.32 million in 2022.

The BSP said 57.3 percent of registered investments were placed in Philippine Stock Exchange-listed securities such as in banks, holding firms, property, food, beverage and tobacco, and transportation services.

About 42.7 percent were invested in peso-denominated government securities while less than one percent were in other instruments as unit investment trust funds, exchange traded funds and Philippine Depositary Receipts.

In April, the top five investor countries were the United Kingdom, US, Singapore, Luxembourg and Norway with a combined share to total at 84.1 percent, said the BSP.

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.

Last year, the BSP registered $886.7 million net hot money inflows. This was lower than the projected $3.5 billion for 2022.

The central bank forecasts that for 2023, net hot money could reach $2.5 billion. Next year, the BSP projects $3.5 billion of the highly speculative net foreign investments via AABs.